THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 742/2020
In the matter between:

GRAHAM ROBERT HERBERT N.O.
First Appellant
KEVIN LAWRENCE COTTERELL N.O.
Second Appellant
DAWN EARP N.O.
Third Appellant
JAMES THOKOANA MOTLATSI N.O.
Fourth Appellant
STEWART STRAUSS TRUSWELL N.O.
Fifth Appellant

and

SENQU MUNICIPALITY
First Respondent
REGISTRAR OF DEEDS, MTHATHA
Second Respondent
MINISTER OF RURAL DEVELOPMENT
AND LAND REFORM
Third Respondent

Neutral citation:
Graham Robert Herbert N.O. and Others v Senqu Municipality
and Others (Case no 742/2020) [2021] ZASCA 177 (17
December 2021)

Coram:
ZONDI, VAN DER MERWE and MOKGOHLOA JJA and MEYER and
WEINER AJJA

Heard:
9 November 2021

Delivered:
This judgment was handed down electronically by circulation to the
parties’ legal representatives by email. It has been published on the
Supreme Court of Appeal website and released to SAFLII. The date and
time for hand-down is deemed to be 10h00 on 17 December 2021.

Summary:  Land - Upgrading of Land Tenure Rights Act 112 of 1991 – upgrading
and conversion into ownership of Permission to Occupy granted in respect of erf in
Sterkspruit – interpretation of s 3(1) of Upgrading Act – whether TEBA Property Trust
as a holder of Permission to Occupy granted in terms of Native Trust and Land Act 18
of 1936 falls within  class of persons in whose interest Upgrading Act was enacted –
TEBA Property Trust was not disadvantaged by Native Trust and Land Act or racially
discriminatory laws and thus may not apply for conversion of its Permission to Occupy
into a full title.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from: Eastern Cape Division of the High Court, Grahamstown (Roberson
J) sitting as court of first instance:
The appeal is dismissed with costs, such costs to include those consequent upon the
employment of two counsel.

___________________________________________________________________

JUDGMENT
___________________________________________________________________

Zondi JA (Van der Merwe and Mokgohloa JJA and Meyer and Weiner AJJA
concurring)
[1] This is an appeal against the judgment and order of the Eastern Cape Division
of the High Court, Grahamstown (the high court). In that judgment the high court
(Roberson J) dismissed the appellant’s application for the conversion of its Permission
to Occupy granted in respect of Erf 88 Sterkspruit (the property) into a formal title in
terms of s 3 of the Upgrading of the Land Tenure Rights Act 112 of 1991 (the
Upgrading Act) as read with Item 2 of Schedule 2 thereto. The appeal concerns the
interpretation of s 3 of the Upgrading Act and Item 2 of Schedule 2 thereto and it is
with leave granted by Roberson J. I shall return to a discussion of these provisions in
some detail. Broadly stated for present purposes, however, s 3(1) of the Upgrading
Act makes provisions for the upgrading and conversion into ownership of certain rights
granted in respect of land.

[2] The principal issue for consideration in this appeal is whether s 3 of the
Upgrading Act, properly interpreted, excludes the appellant, the TEBA Property Trust
(the Trust) from the category of persons who may apply for conversion of its
Permission to Occupy into ownership, and, if it does not, whether the failure to do so
renders s 3 unconstitutional. The Trust is the holder of a Permission to Occupy in
respect of the property, which was granted to its predecessors in title by the Governor-
General in terms of the Native Trust and Land Act 18 of 1936 (the Native Trust and

Land Act). Over the years the Trust had engaged officials of the first respondent,
Senqu Municipality (the Municipality), with a view to requesting it to submit to the
second respondent, the Registrar of Deeds, its application to convert its Permission to
Occupy into ownership. When its attempt failed, the Trust, on 25 May 2016,
approached the high court for relief in the following terms:
‘1.
Declaring that the Permission to Occupy (annexure TPT1 to the Founding Affidavit)
held by the Applicants constitutes a land tenure right referred to in Item 2 of Schedule 2 of the
Upgrading of Land Tenure Rights Act, 112 of 1991 in respect of Erf 88 Sterkspruit;

2.
Directing the First Respondent within 14 days of such Order as may issue, to submit
to the Second Respondent a deed of transfer made out in the names of the Applicants for
conversion of the right referred to above into ownership of Erf 88 Sterkspruit in the names of
the Applicants by the Second Respondent;

3.
Alternatively to 2 above, directing the First Respondent within 14 days of such Order,
through its authorised signatory, to sign a deed of transfer made out in the names of the
Applicants providing for conversion of the right referred to above into ownership of Erf 88
Sterkspruit in the names of the Applicants as well as any other requisite documentation
submitted to it by the Applicants, for submission to the Second Respondent to effect the
aforesaid conversion.’

[3] The Municipality resisted the Trust’s claim. It raised a point of law in terms of
rule 6(5)(d)(iii) of the Uniform Rules of Court in which it contended, among other things,
that the Upgrading Act, had no legislative effect in the then independent territory of
Transkei, in which the property is located.

[4] The Municipality’s defence was informed by the historic development of the
Upgrading Act. This Act was enacted to provide for the upgrading and conversion into
ownership of certain rights granted in respect of land. It permitted the holders of such
rights to convert their occupational rights into ownership. But the difficulty was that its
operation was limited to the area that comprised the old South Africa and excluded the
territory of Transkei, in which the property is located. In 1998, the operation of the
Upgrading Act was extended to cover the entire South Africa. The extension was done
in terms of the Land Affairs General Amendment Act 6 of 1998 (the Amendment Act),
which amended the Upgrading Act by introducing s 25A thereto. The operation of the

provisions of the Upgrading Act, except ss 3, 19 and 20, was extended to Transkei.
The extension did not entirely solve the problem because of the exclusion of ss 3, 19
and 20 from application to persons located in Transkei. It is therefore not surprising
that when the Municipality raised this defence, the Trust responded by challenging the
constitutional validity of the Amendment Act in terms of which the extension of the
Upgrading Act was effected because it was excluded from the legislative regime under
the Amendment Act as it stood then.

[5] Apart from the inapplicability of s 3 of the Upgrading Act, the Municipality had
raised a number of defences. These included: a lack of legal standing by the Trust;
use of the property contrary to the conditions of the Permission to Occupy; a lack of
compliance with statutory provisions in terms of which the permission was granted;
and the invalidity of the consent granted by the Transkei Government that the
Permission to Occupy could be ceded to the Trust.

[6] After the Trust raised the constitutional challenge to s 25A of the Upgrading Act
and s 1 of the Amendment Act, the Municipality delivered a supplementary answering
affidavit in response to the challenge, in which it raised a further defence which it
pleaded as follows:
‘10.
The [Trust], conveniently so, in trying to attack the relevant statutory provisions, play
down or ignore:
10.1
the historic and legislative background against which the trust acquired the permission
to occupy the property;
10.2
the fact that the trust (any reference to the trust includes a reference to its
predecessors in title) acquired the permission to occupy the property in order to profit greatly
financially from the system of migratory labour, which has variously been described as the
cornerstone of apartheid and the greatest ‘cancer’ to afflict South African Society;
10.3
the fact that the trust was the beneficiary of pernicious and racially discriminatory
legislation in terms of which it acquired permission to occupy the property to advance its
recruitment business for recruiting migratory labour for the mines of South Africa and was a
party to perpetrating, for profit, one of the greatest social evils inflicted on the people of South
Africa. Significantly the applicants now, opportunistically so, seek to portray the trust as being
a victim of this racially discriminatory legislation rather than its beneficiary, which it was.’

[7] In the high court the issue of the invalidity of the Amendment Act was dealt with
on a separated basis and was considered before other issues, which were postponed
for later determination. In the event, the high court held that the exclusion of s 3 from
the extended geographical application of the Upgrading Act was inconsistent with ss
9 and 25(1) of the Constitution, as the exclusion denied the Trust an opportunity to
convert its right into ownership and constituted deprivation of property. The high court
accordingly declared that s 1 of the Amendment Act and s 25A of the Upgrading Act
were inconsistent with the Constitution to the extent that they excluded s 3 of the
Upgrading Act from applying to the entire Republic of South Africa.

[8] The proceedings were referred to the Constitutional Court for confirmation of
the declaration of invalidity order of the high court. The declaration of invalidity of the
Amendment Act and s 25A of the Upgrading Act was confirmed by the Constitutional
Court in the judgment reported as Herbert N.O. and Others v Senqu Municipality and
Others [2019] ZACC 31. After the confirmation of constitutional invalidity of s 1 of the
Amendment Act and s 25A of the Upgrading Act, the proceedings in the high court
resumed on the remaining issues.

[9] The application served before Roberson J and she dismissed it with costs. She
held that the Trust did not fall into a class or group in whose interest the Upgrading
Act was enacted, and accordingly, that it is not entitled to claim conversion in terms of
s 3 read with Item 2 of Schedule 2 of the Upgrading Act. She considered it
unnecessary to deal with the further arguments raised by the Municipality, because of
the conclusion she reached. In coming to the conclusion that the Trust did not fall
within the class of persons in whose interest the Upgrading Act was enacted, the
learned Judge relied on dicta in judgments of the Constitutional Court.1

[10] The question is whether the high court was correct to conclude that, properly
interpreted, the Upgrading Act excludes the Trust from the class of persons, who are

1 Western Cape Provincial Government and Others: In re DVB Behuising (Pty) Ltd v North West
Provincial Government and Another [2000] ZACC 2; 2001 (1) SA 500 (CC) paras 2-3; paras 76-78; para
103; paras 105-106; Rahube v Rahube and Others [2018] ZACC 42; 2019 (2) SA 54 (CC) para 38;
Herbert NO and Others v Senqu Municipality and Others [2019] ZACC 31; 2019 (6) SA 231 (CC) paras
10, 24 and 25; Tongoane v Minister of Agriculture and Land Affairs [2010] ZACC 10; 2010 (6) SA 214
(CC) paras 1-2, 27-28.

entitled to claim conversion rights. The issue involves the interpretation of the
Upgrading Act and this must be considered in terms of the principles of interpretation
as enunciated in Endumeni2 and as recently restated in United Manganese.3 The
starting point is the text of s 3 of the Upgrading Act, but from the outset it must be
viewed in the context in which it appears and of the apparent purpose to which it is
directed, as well as the material known to those responsible for its production, so that
the process is both textual and contextual. The context within which the text must be
viewed, must include the entire Upgrading Act, its legislative history and s 39(2) of the
Constitution which enjoins the courts, when interpreting legislation, to promote the
spirit, purport and objects of the Bill of Rights.4 Endumeni reminds us that in the
process of interpreting legal instruments, judges should not cross the divide between
the legislative and judicial powers. Their role is to interpret legislation and not make
laws.

[11] In Novartis5 this Court quoted with approval the statement in Bothma-Batho
Transport6 that the approach taken by courts to only look at surrounding
circumstances when there is an ambiguity in language, is ‘no longer consistent with
the approach to interpretation now adopted by the South African courts in relation to
contracts or other documents, such as statutory instruments or patents.’

[12] Before I deal with the Trust’s submissions, it is necessary to sketch the
applicable legal framework. Section 25(5) of the Constitution provides:
‘The state must take reasonable legislative and other measures, within its available resources,
to foster conditions which enable citizens to gain access to land on an equitable basis.’

[13] Section 25(6) provides:

2 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; 2012 (4) SA 593
(SCA).
3 Commissioner, South African Revenue Service v United Manganese of Kalahari (Pty) Ltd [2020]
ZASCA 16; 2020 (4) SA 428 (SCA) paras 10, 16-17.
4 M Wallis ‘Interpretation Before and After Natal Joint Municipal Pension Fund v Endumeni Municipality
2012 (4) SA 593 (SCA)’ PER / PELJ 2019(22).
5 Novartis SA (Pty) Ltd v Maphil Trading (Pty) Ltd [2015] ZASCA 111; 2016 (1) SA 518 (SCA) para 29.
6 Bothma-Batho Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk [2013] ZASCA 176;
2014 (2) SA 494 (SCA) para 12.

‘A person or community whose tenure of land is legally insecure as a result of past racially
discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament,
either to tenure which is legally secure or to comparable redress.’(Own emphasis)

[14] The Trust correctly conceded that although the Upgrading Act predates the
Constitution, it is indeed a legislative measure that was taken by the state to enable
citizens to gain access to land on an equitable basis, as it provides for the means by
which persons or communities whose tenure of land is insecure by virtue of past
racially discriminatory laws may obtain tenure which is legally secure.

[15] Section 3(1) of the Upgrading Act provides as follows:
‘(1)
Subject to subsection (1B), any land tenure right mentioned in Schedule 2 and which
was granted in respect of any erf or other piece of surveyed land shall, upon the submission
by the owner of such erf or piece of land at the deeds registry of a deed of transfer on the form
prescribed for that purpose under the Deeds Act and made out in the name of the person who
is the holder of the relevant land tenure right, be converted into ownership by the registrar of
deeds by the registration of such erf or piece of land in the name of such person: Provided
that-
(a)
where the State is the owner of an erf or piece of land situated outside a formalised
township, the relevant land tenure right need not be converted into ownership, and a deed of
transfer shall not be submitted unless-
(i)
the Minister is satisfied, on the basis of a report by a person assigned or appointed by
him or her, that the rights or interests of putative holders are being protected; and
(ii)
where such land is lawfully occupied or has been allocated for the use of a tribe or
community a tribal or community resolution has been obtained;
(b)
where a tribe is the owner of the land, the decision to convert the relevant land tenure
right into ownership shall be taken by way of a tribal resolution.
(1A)
For the purposes of an investigation referred to in subsection (1) (a), the designated
or appointed person shall have all the rights and duties referred to in section 24D (7).
(1B)
If an owner of an erf or piece of land is requested to submit a deed of transfer of land
in terms of subsection (1), the Minister may on request of such owner, or if the State is the
owner of such land, of his or her own accord-
(i)
impose conditions in respect of the use of such land, but if the State is the owner of
such land and it is lawfully occupied by or has been allocated for the use of a tribe or
community, in consultation with such tribe or community;

(ii)
from moneys appropriated by Parliament or at the cost of an affected person and on
such conditions as he or she may determine, cause such land to be surveyed;
(iii)
order that an amount to be determined by him or her be paid by an affected person to
the owner of the erf or other piece of land, or if the erf or other piece of land falls within an
area lawfully occupied or allocated for use by a tribe or community, to the tribe or community
concerned;
(iv)
provide for a method for determining the amount to be paid in terms of paragraph (iii).’

[16] Item 2 of Schedule 2 dealing with ‘Rights to the Occupation of Land’ provides
that:
‘[A] permission to occupy any allotment within the meaning of the Black Areas Land
Regulations, 1969 (Proclamation No. R.188 of 1969)’, is a land tenure right.’

[17] Regulation 47(1)(a) of the Black Areas Land Regulations, 1969 provides as
follows:
‘Notwithstanding the provisions of any other law, every permission in writing granted or
deemed to have been granted in terms of any law, prior to the commencement of these
regulations, to occupy any specified piece of Trust land for arable, residential, church, school
or trading purposes, shall notwithstanding anything contained in such law or written
permission, be deemed to have been granted in terms of these regulations, under permission
to occupy substantially in the form prescribed in Annexure 27 and . . .  in the case of a trading
allotment to be subject to the general and special conditions prescribed in Annexures 28 and
30 respectively.’

[18] Section 1 of the Upgrading Act defines the phrase ‘land tenure right’ to mean
‘any leasehold, deed of grant, quitrent or any other right to occupation of land created
by or under any law and, in relation to tribal land, includes any right to the occupation
of such land under the indigenous law or customs of the tribe in question.’

[19] The following factual context is important in interpreting s 3(1) of the Upgrading
Act. The Trust acquired the Permission to Occupy in respect of the property, which it
now seeks to convert into ownership under these circumstances. TEBA Limited
(TEBA), by agreement with and on behalf of a number of mining houses conducting
mining operations throughout South Africa, manages the recruitment of staff and the
post-employment personnel matters of the staff so recruited. The directors of TEBA

are also the trustees of the Trust. The Trust was originally established on 28
September 1978 to hold and administer the various property rights under which TEBA
now occupies and conducts business on various properties in different centres.

[20] TEBA and the Trust conduct business in the Eastern Cape from the Trust’s
office building in Sterkspruit, located on the property, which falls within the area of the
Municipality. The property is currently registered in name of the Municipality, but has
been occupied by the Trust or its predecessors in title in terms of a right of occupation
for a period in excess of 75 years. On 6 September 1940, in terms of a written
‘Permission to Occupy’ permission was granted to the Native Recruiting Corporation
by the then Secretary for Native Affairs to occupy Lot No. 1, Village of Sterkspruit,
District of Herschel, measuring 942 square roods.

[21] The Native Recruiting Corporation was incorporated as the Native Recruiting
Corporation Limited on 27 September 1912 and its shareholders were various mining
companies. During November 1966, the Native Recruiting Corporation Limited, by
special resolution dated 9 November 1966, changed its name to Mine Labour
Organisations (N.R.C.) Limited. This was confirmed in a letter issued by the
Department of Commerce and Industries dated 25 November 1966.

[22] On 7 December 1989, Mine Labour Organisations (N.R.C.) Limited ceded its
rights among others, in and to the Permission to Occupy to the Trust in terms of the
Deed of Cession. At that time, Sterkspruit fell within and under the jurisdiction of the
then Republic of Transkei. On 18 December 1990 the Director General for Local
Government and Land Tenure of the Republic of Transkei (the Director General)
consented to the cession of the rights as aforesaid.

[23] The following legislative history is important. It is common cause that the
Permission to Occupy held by the Trust was granted pursuant to the provisions of the
then Native Trust and Land Act. Section 4 of this Act provided for the establishment of
a corporate body to be known as the South African Native Trust. In terms of s 6 of the
Native Trust and Land Act, all land ‘which has been reserved or set aside for the
occupation of natives’ (including additional areas defined in that Act) vested in the

South African Native Trust. The village of Sterkspruit fell within the area so defined
and under the administration of the South African Native Trust.

[24] The Native Trust and Land Act provided further that the affairs of the South
African Native Trust would be administered by the Governor-General as Trustee with
power, subject to the provisions of the Act, to delegate any of his powers and functions
as Trustee to the Minister of Native Affairs who would act in consultation with the
Native Affairs Commission.

[25] Section 18(3) of the Native Trust and Land Act authorised the Governor-
General as Trustee, subject to the approval of Parliament, for the support, advantage
or well-being of Africans, to grant, sell, exchange, lease or otherwise dispose of trust
land  to persons other than Africans and s 18(4) empowered the Trustee to authorise
the grant to or occupation by any person, Board of Trustees, educational authority or
religious body for church, school, mission or trading purposes of such areas of land,
the property of the trust as he may deem necessary. The Trust’s predecessors in title
acquired the Permission to Occupy in respect of the property in terms of s 18(3).

[26] The Trust asserted that the Permission to Occupy is a land tenure right referred
to in Schedule 2 of the Upgrading Act in that it is a permission to occupy an allotment
within the meaning of the Black Areas Land Regulations, 1969 and that it constitutes
a permission referred to in regulation 47(1)(a) to occupy a specified piece of land of
the South African Native Trust. It accordingly asserted that the property falls to be
registered in the name of its trustees. This assertion by the Trust that its Permission
to Occupy is a land tenure right cannot be disputed. However, the entitlement to have
it registered in the name of its trustees is disputed.

[27] The Trust argued that, on the plain meaning of s 3(1) of the Upgrading Act, it is
entitled to the conversion of the Permission to Occupy into ownership by means of the
procedures contained in that section. In making this submission the Trust placed great
emphasis on the word ‘any’ appearing in s 3(1) and Item 2 of Schedule 2, which it
argued, indicates that the exercise of a right to convert land tenure rights is not limited
to any defined category or group of persons. Its tenure in the property, the Trust

argued, is based solely on the Permission to Occupy. It argued that by virtue of the
provisions of the Native Trust and Land Act, its predecessor in title was precluded from
acquiring cadastral title to property within the area regulated by the provisions of that
Act and was limited to the mechanisms provided in that Act to obtain the right to occupy
the property. It accordingly claimed that it is a person whose tenure of land is legally
insecure as a result of the Native Trust and Land Act, a past racially discriminatory
law.

[28] The Trust submitted that the interpretation of s 3(1) by the high court, that the
Upgrading Act excluded it from a class of persons who qualifies to apply for conversion
of their tenuous title, was incorrect. In developing this argument, the Trust argued that
in order to arrive at this conclusion it would require one to read words into the
Upgrading Act, to provide for the exclusion of defined classes of persons from its
ambit. The Trust submitted that this was impermissible in the absence of a finding that
the Upgrading Act was inconsistent with the Constitution to the extent that it failed to
exclude certain classes of persons from exercising the rights afforded to the holders
of ‘any’ land tenure right by s 3(1) of the Upgrading Act.

[29] The Trust’s argument must be rejected for the simple reason that it is based
solely on the text of the Upgrading Act and ignores its context, purpose and the role it
is intended to play in the transformation of our society. The construction of s 3(1) of
the Upgrading Act contended for by the Trust would lead to a result that could never
have been contemplated by the legislature when it enacted it. It could not have been
intended to allow persons such as the Trust and its predecessor in title to apply for
conversion under the Upgrading Act. In terms of s 18 of the Native Trust and Land Act
the Trust’s predecessor in title was not precluded from acquiring full title. The
Governor-General from whom it acquired the Permission to Occupy the property,
could with the permission of Parliament, sell the land to which the Permission to
Occupy relates, to the Trust’s predecessors in title. The Native Trust and Land Act in
no way disadvantaged it. A special regime for the acquisition of full title to trust land

under s 18(3) of that Act applied to persons such as the Trust’s predecessors in title,
who were not classified as Africans.7

[30] In Hanekom8 this Court held that a court is justified in departing from the literal
meaning of the section to avoid absurdity and in support of that proposition cited with
approval the following statement by Innes CJ in Venter v R9 that a court will do so:
‘(W)hen to give the plain words of the statute their ordinary meaning would lead to absurdity
so glaring that it could never have been contemplated by the Legislature, or where it would
lead to a result contrary to the intention of the Legislature, as shown by the context or by such
other considerations as the Court is justified in taking into account. . . .’

[31] Scott JA, who wrote for the court, went on to say:
‘This approach has since been consistently followed. Over the years courts have repeatedly
warned of the dangers of departing too readily from the ordinary meaning of the words of the
statute and have stressed that the absurdity must be “utterly glaring” or the true intention quite
clear and not merely a matter of surmise or probability. On the other hand, as accepted in
Venter v Rex, ambiguity in the provision in question is not a requirement for departure from its
literal meaning. It has also been accepted that to avoid the absurdity or give effect to the true
intention of the Legislature, it is permissible not only to cut down or restrict the language used
but also to expand it. See, for example, the comments of Corbett J in S v Burger 1963 (4) SA
304 (C) at 308A-309B (cited with approval by Friedman J in De Villiers v Kinsale Properties
Share Block Ltd 1986 (2) SA 592 (D) at 594G-595E).’

[32] Section 3(1) must be interpreted purposively. As already stated, the Upgrading
Act was intended to provide restitution to those who were affected by the apartheid
legislation, mainly Black families, whose full title to land was replaced with tenuous
land rights. The section provides a mechanism through which the freehold title could
be restored to those families who were the victims of the apartheid legislation.

7 Section 18(3) of the Native Trust and Land Act provided:
‘With the approval of Parliament signified by resolutions of both Houses the Trustee may for the support,
advantage or well-being of [Africans] or purposes connected therewith, grant, sell, lease or otherwise
dispose of land the property of the Trust to persons other than [Africans].’
8 Hanekom v Builders Market Klerksdorp (Pty) Ltd and Others [2006] ZASCA 2; 2007 (3) SA 95 (SCA)
para 7.
9 Venter v R 1907 TS 910 at 914-915.

[33] The text of s 3(1) must be viewed against the following contextual background
which provides the broad purpose underlying its enactment. Since 1913 the notorious
apartheid government enacted various pieces of legislation that generally had the
cumulative effect of dispossessing the black majority of their land and putting their
security of tenure over the remnants of such lands, or the reserves, in a precarious
position. The principal legislative instruments of land dispossession included, inter alia,
the Native Land Act 27 of 1913 and the Native Trust and Land Act 18 of 1936, both of
which restricted the African population to 13% of the total land area of South Africa;
the Group Areas Act 41 of 1950, which allocated certain areas to specific race groups;
the Natives Laws Amendment Act 54 of 1937, which served to prohibit Africans from
buying land in urban areas; the Bantu Authorities Act 68 of 1951, which allowed the
establishment of tribal, regional, and territorial authorities; the Prevention of Illegal
Squatting Act 52 of 1951, which allowed the government to establish resettlement
camps for surplus people evicted from white farms; the Blacks Resettlement Act 2 of
1954, to give the state the authority to remove Africans from any area in the magisterial
district of Johannesburg and adjacent areas; the Promotion of Bantu Self-Government
Act 46 of 1959, to establish the independent homelands and make the reserves the
political homeland of black South Africans.10

[34] The minority in DVB Behuising had this to say regarding the historical context
of the Upgrading Act (at para [105]):
‘In 1991, during the period of transition from apartheid to democracy, Parliament passed the
Upgrading of Land Tenure Rights Act. The express purpose of this legislation, as its name
suggests, was to provide for the conversion into full ownership of the tenuous land rights which
had been granted during the apartheid era to Africans.’ (Footnote omitted)

[35] As to the judgments of the Constitutional Court,11 upon which the high court
relied in reaching the conclusion that it did, the Trust submitted that these judgments
are neither binding on the high court or this Court, nor do they constitute authority for
the proposition relied on by the high court.

10 D Mailula Customary (Communal) Land Tenure in South Africa: Did Tongoane overlook or avoid the
core issue? (2011) 4 CCR 73 at 78.
11 Ibid.

[36] It was submitted by the Trust that the statement by Ngcobo J at para 9 in DVB
Behuising as to the purpose of the Upgrading Act, which was repeated by the
Constitutional Court in Rahube CC at para 38, is an obiter dictum and does not
constitute a finding which is binding on this Court. It argued that the statement by
Ngcobo J had nothing to do with the issue which was before the court, namely the
repeal by the North West Provincial Legislature of portions of Proclamation R293 of
1962 and whether it had the constitutional competence to do and accordingly whether
the Act providing for the repeal of the said Proclamation was constitutional.12 It
contended that Ngcobo J did not say that the purpose of the Upgrading Act was limited
to the conversion of tenuous rights held by Africans.

[37] The Constitutional Court held in Camps Bay Ratepayers’ and Residents’
Association v Harrison13  that ‘it is trite that the binding authority of precedent is limited
to the ratio decidendi, (rationale or basis of deciding) and that it does not extend to
obiter dicta or what was said ‘by the way’. But the fact that a higher court decides more
than one issue, in arriving at its ultimate disposition of the matter before it, does not
render the reasoning leading to any one of these decisions obiter, leaving lower courts
free to elect whichever reasoning they prefer to follow.

[38] The important point is contained in what the high court had to say at para 36 of
the judgment regarding the statements of the Constitutional Court in DVB Behuising
and Herbert NO:
‘Firstly, one cannot ignore the Constitutional Court’s express statements concerning the
purpose of the Upgrading Act. They are unequivocal pronouncements on its purpose, in the
context of past injustice and inequality. I should mention that it was submitted that O’Regan
J’s reference to the “express purpose” of the Upgrading Act was in the minority judgment in
DVB Behuising, whereas Ngcobo J had only referred to the “purpose”. I think there is little
difference between the two statements’.

[39] The statements made by the Constitutional Court in DVB Behuising and
subsequently adopted in Herbert NO and Rahube dealt with the purpose of the

12 DVB Behuising paras 2 and 3.
13 Camps Bay Ratepayers’ and Residents’ Association v Harrison [2010] ZACC 19; 2011 (4) 42 (CC)
para 30.

Upgrading Act. The statements made in each of these three judgments regarding the
purpose of the Upgrading Act were part of their rationes decidendi. For the
Constitutional Court to reach the conclusion on the issues that were before it in each
of the judgments, it was necessary for it to determine the purpose of the Upgrading
Act. The high court could not ignore these statements emanating from the
Constitutional Court.

[40] The Upgrading Act must be understood as responding to our painful history and
facilitating the transformation of our society so as to heal the divisions of the past. The
interpretation of the section contended for by the Trust, places too much emphasis on
the text with the result that it undermines the objective of the Upgrading Act. Thus, as
a matter of interpretation of s 3(1) in accordance with its clear purpose, it is only
applicable to persons who were prejudicially affected by past racially discriminatory
laws and practices.

[41] It is clear from this contextual background and the history of the Upgrading Act
that the conclusion of the high court that the Trust does not fall within the category of
persons in whose interest the Upgrading Act was enacted, cannot be faulted. It was
not disadvantaged by racially discriminatory laws, in particular the Native Trust and
Land Act in terms of which its predecessors in title obtained a Permission to Occupy.
In fact, to use Jafta J’s words at para 24 in Herbert NO14 ‘[What] was clear though is
that the Trust and its predecessors were actively involved in the implementation of
shameful policies of the apartheid government by recruiting workers to provide cheap
labour for the mining industry. Those workers travelled long distances from their
homes and families and were obliged to work under the most appalling conditions,
while living in single-sex hostels, which exposed them to all sorts of illnesses and
dangers associated with mining operations and arising from their migrant status’.

[42] In light of the conclusion I have reached on the interpretation of s 3(1) of the
Upgrading Act, it becomes unnecessary to deal with further defences raised by the
Municipality.

14 Footnote 1.

[43] In the result the appeal is dismissed with costs, such costs to include those
consequent upon the employment of two counsel.

______________
D H ZONDI
JUDGE OF APPEAL

APPEARANCES:

For the appellants:
I J Smuts SC with J G Richards
Instructed by:

Lexicon Attorneys, Port Elizabeth

Honey Attorneys, Bloemfontein

For the first respondent:
O Ronaasen SC with M Ndamase
Instructed by:

Whitesides Attorneys, Makanda

Webbers Attorneys, Bloemfontein

For the second respondent:
─
Not participating in the appeal

For the third respondent:

─

Instructed by:

─
The State Attorney, Port Elizabeth

The State Attorney, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL
From:
The Registrar, Supreme Court of Appeal
Date:
17 December 2021
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does not form
part of the judgments of the Supreme Court of Appeal
Graham Robert Herbert N O and Others v Senqu Municipality and Others (Case no 742/2020) [2021]
ZASCA 177 (17 December 2021)
Today the Supreme Court of Appeal (SCA) dismissed an appeal against the judgment and order of the Eastern
Cape Division of the High Court, Grahamstown.

The issue concerned the interpretation of the Upgrading of the Land Tenure Rights Act 112 of 1991 (Upgrading
Act) which makes provision for the upgrading and conversion into ownership of certain rights, such as Permission
to Occupy, in respect of land. The question was whether the Upgrading Act excludes the appellant from a class
of persons who may apply for a conversion into full title a Permission to Occupy granted in respect of land situated
in Sterkspruit, and, if it fails to do so, whether such failure renders it unconstitutional as contended by the
respondent.

The Permission to Occupy was granted to the appellant’s predecessor in title pursuant to the provisions of the then
Native Trust and Land Act 18 of 1936, which provided for the establishment of a corporate body known as the
South African Native Trust to hold land on behalf of the Africans. In terms of the Permission to Occupy the
appellant’s predecessor in title was entitled to occupy Erf 88 Sterkspruit from which it conducted recruitment of
labour business. The Permission to Occupy was subsequently ceded to the appellant. The appellant contending
that it was entitled to apply for conversion into full title of its Permission to Occupy requested the respondent to
submit to the Deeds Registry offices on its behalf an application for the conversion. When the respondent failed
to accede to its request, the appellant approached the high court for a declarator and an order directing the
respondent to submit to the Registrar of Deeds an application for a conversion. The high court dismissed its
application holding that the appellant failed to show that it fell within a class of persons in whose interest the
Upgrading Act was enacted. On appeal the appellant contended the Upgrading Act did not exclude it from a class
of persons who could apply for conversion of its tenuous title in respect of land.

The SCA dismissed the appeal. It held that the Upgrading Act should be understood within South Africa’s painful
historical context in order to facilitate transformation of South African society. The SCA held further that the
interpretation of the Upgrading Act contended for by the appellant undermined the purpose and objective of the
Upgrading Act. It was never disadvantaged by past racially discriminatory laws. Rather, it participated in the
exploitation of discriminatory legislation, and the Upgrading Act specifically applied to persons who were
prejudicially affected by past discriminatory laws and practices.

The SCA dismissed the appeal with costs.
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