THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 942/2020

In the matter between:
FLOWER FOUNDATION PRETORIA
HOMES FOR THE AGED NPC

APPELLANT
and
REGISTRAR OF DEEDS, PRETORIA

FIRST RESPONDENT
SUSANETTA DANIE SMITH N O

SECOND RESPONDENT
GERTRUIDA MAGDALENA BOTHA N O

THIRD RESPONDENT
JOHANNES PETRUS WILHELM SMITH N O
FOURTH RESPONDENT
SYBRAND ALBERTUS TINTINGER N O

FIFTH RESPONDENT

Neutral citation:
Flower Foundation Pretoria Homes for the Aged NPC v
Registrar of Deeds, Pretoria and Others (942/2020) [2022]
ZASCA 8 (20 January 2022)
Coram:
SALDULKER ADP, MOCUMIE, MOLEMELA and MOKGOHLOA
JJA and MEYER AJA
Heard:
24 November 2021

Delivered:
This judgment was handed down electronically by circulation to the
parties’ legal representatives via 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 9h45 on 20 January 2022.
Summary: Housing Development Schemes for Retired Persons Act 65 of 1988 –
interpretation of s 4B of the Housing Development Schemes Act – whether the
holders of rights of occupation in a housing development scheme have to give
consent to the alienation of part of the property to the purchaser free of
encumbrances in terms of ss 4A, 4B and 4C of the Housing Development
Schemes Act – whether the housing development scheme was registered over the
entire property – s 4B prohibits alienation of the property without 75% consent of
the holders of rights of occupation

ORDER

On appeal from: Gauteng Division of the High Court, Pretoria (Nonyane AJ sitting
as court of first instance):
The appeal is dismissed with costs including the costs of two counsel.

JUDGMENT

Mokgohloa JA (Saldulker ADP, Mocumie and Molemela JJA and Meyer AJA
concurring)
[1] This is an appeal against the decision of the Gauteng Division of the High
Court, Pretoria (the court a quo) dismissing the application by the appellant, Flower
Foundation Pretoria Homes for the Aged NPC, to declare that the transaction
between the appellant and DIY Systems and Projects (Pty) Ltd (DIY Systems)
selling part of a property over which a housing development scheme was
registered, does not transgress the provisions of s 4B of the Housing Development
Schemes for Retired Persons Act 65 of 1988 (the Housing Development Schemes
Act).

[2] The facts can be summarised as follows. The appellant is the registered
owner of Erf 578, Groenkloof Extension 1, measuring 1.0133 hectares, held under
certificate of consolidated title deed T32837/1988 (the property). During 2001, the
appellant established a housing development scheme on the property. The title
deed was endorsed as such in terms of s 4C(3) of the Housing Development
Schemes Act on 5 July 2001. The property consists of 39 rental units or guest
rooms, 10 cottages, 29 bachelor flats, 19 ‘life right’ units, and a communal hall.
During April 2015, the second to fifth respondents (the respondents) purchased a
lifelong right of occupation in respect of unit 41, garage 9 on the property. The sale

agreement was drawn in accordance with the provisions of the Housing
Development Schemes Act.

[3] On 22 and 27 February 2018, the appellant had general meetings with the
life-right owners. The purpose of the meeting was for the appellant to inform the
life-right owners of the intention to sell a portion of the property on which the
communal hall is situated. The appellant sought consent of the life-right owners in
terms of s 4B of the Housing Development Schemes Act. Only two of the life-right
owners gave their consent.

[4] Notwithstanding the fact that the majority of life-right holders withheld their
consent, the appellant entered into a deed of sale and option agreement with DIY
Systems in around July 2018. In terms of this agreement, the appellant proposed
to sell a portion of Erf 578 to DIY Systems for a purchase price of R7.8 million in
order for DIY Systems to use it for the development of mixed development,
comprising of medical related uses, offices and/or residential units. The agreement
was subject to the fulfilment of the following suspensive conditions:
(i)
that approval is granted by the relevant authorities for the subdivision of the
land to create the property;
(ii)
that the Local Authority approves the amendment of the town planning
scheme to allow the development on the property; and
(iii)
that approval is granted in terms of s 4C of the Housing Development
Schemes Act in terms whereof 75% of the holders of the rights of occupation
approve the sale of the property and the alienation thereof to the purchaser free of
encumbrances in terms of ss 4A, 4B and 4C of the Housing Development
Schemes Act.

[5] When the written consent of the life-right owners was not forthcoming, the
appellant, through its attorney, wrote a letter to the life-right owners demanding
their consent. The letter informed the life-right owners that failure to give their

consent in terms of s 4B would result in the launching of an application to court,
and that those who withheld their consent would be liable for the costs of the
application. The majority of life-right holders refused to give their consent.

[6] The appellant approached the court a quo seeking an order declaring that
(i) the transaction between the appellant and DIY Systems does not implicate and
does not transgress the provisions of s 4B of the Housing Development Schemes
Act; (ii) the consent of the holders of rights of occupation in the scheme is not
required for the proposed alienation of the portion of the property; (iii) the
subdivision of the property to create portion 1, and the alienation and transfer of
portion 1, are not null and void as contemplated by the provisions of s 4B(2) of the
Housing Development Schemes Act; and (iv) the registrar of deeds, Pretoria be
authorised to transfer portion 1 of the property to DIY Systems. The court a quo
dismissed the application and held that the consent of the life-right owners was
required, because the housing scheme was established on the entire property.

[7] The issue in this appeal is whether the court a quo was correct in refusing
to grant the declaratory orders sought by the appellant. Central to this is whether
s 4B of the Housing Development Schemes Act prohibits the appellant from
alienating the proposed portion 1 of the property to DIY Systems without the
consent of the life-right holders. This issue involves the interpretation of the
Housing Development Schemes Act as enunciated in Endumeni1 as restated in
Commissioner, South African Revenue Service v United Manganese,2 where this
Court stated:
‘It is unnecessary to rehearse the established approach to the interpretation of statutes
set out in Endumeni and approved by the Constitutional Court in Big Five Duty Free. It is
an objective unitary process where consideration must be given to the language used in

1 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; [2012] 2 All SA
262 (SCA); 2012 (4) SA 593 (SCA).
2 Commissioner, South African Revenue Service v United Manganese of Kalahari (Pty) Ltd [2020]
ZASCA 16; 2020 (4) SA 428 (SCA) para 8.

the light of the ordinary rules of grammar and syntax; the context in which the provision
appears; the apparent purpose to which it is directed and the material known to those
responsible for its production.’

[8] Wallis JA, who wrote for the court, went on to say:
‘. . . Statutes undoubtedly have a context that may be highly relevant to their interpretation.
In the first instance there is the injunction in s 39(2) of the Constitution that statutes should
be interpreted in accordance with the spirit, purport and objects of the Bill of Rights.
Second, there is the context provided by the entire enactment. Third, where legislation
flows from a commission of enquiry, or the establishment of a specialised drafting
committee, reference to their reports is permissible and may provide helpful context.
Fourth, the legislative history may provide useful background in resolving interpretational
uncertainty. Finally, the general factual background to the statute, such as the nature of
its concerns, the social purpose to which it is directed and, in the case of statutes dealing
with specific areas of public life or the economy, the nature of the areas to which the statute
relates, provides the context for the legislation.’3

[9] Section 4B of the Housing Development Schemes Act, which is headed
‘Alienation of land subject to right of occupation’, provides:
‘(1) Unless at least 75 percent of the holders of rights of occupation in a housing
development scheme consent thereto the land concerned may not be alienated free from
such rights: Provided that the holders of the rights of occupation shall in the case of such
an alienation have preferent claims in respect of the proceeds of the sale of land, which
claims shall, notwithstanding the provisions of any other law –
(a)
rank in priority over the claim of any mortgagee; and
(b)
be equal to the amount paid in terms of paragraph (a) of the definition of right of
occupation.
(2) Any alienation taking place without the consent of the holders as contemplated in
subsection (1) shall be null and void.’

3 Footnote 2 para 17.

[10] The appellant contended that the establishment of the housing
development scheme was only on a portion of Erf 578, which consists of 19
residential units that are occupied by the life-right holders. Therefore, the life-right
holders’ housing interests in relation to the housing scheme is limited to the
occupation of their respective units only. According to the appellant, the life-right
holders’ rights of occupation are not affected by the contemplated sale of the
portion of land which they do not occupy. Consequently, the contention continues,
the sale agreement between the appellant and DIY Systems does not implicate
and transgress the provisions of s 4B of the Housing Development Schemes Act.

[11] The appellant’s contentions are devoid of merit for the following reasons. In
the first instance, when the housing development scheme was established on 5
July 2001, the title deed to the property was endorsed as follows:
‘

T32837/1988
Endorsement in terms of section 4C (3) of Act 65 of 1988
The within mentioned property is subject to a housing development scheme as
contemplated in section 4C(1)(A) of the above mentioned Act.
Application filed with . . .’
The number T32837/1988 above refers to the title deed in respect of Erf 578
Groenkloof (the property) measuring 10 133 m2. Therefore, the housing
development scheme was established on the entire property and not just a portion
thereof. There is only one property and one title deed.

[12] Second, clause 1.1.1 of the agreement of sale between the appellant and
the respondents records that the appellant has established a housing development
scheme for retired persons of the age of 60 years or older over the property
described as:
‘Erf 578 GROENKLOOF EXTENSTION 1 MEASURING 1,0133 HECTARES HELD
UNDER DEED OF TRANSFER NO T32837/1988 ALSO KNOWN AS 64 GEORGE
STORRAR DRIVE, GROENKLOOF, PRETORIA
(hereinafter called the PROPERTY).’

[13] Third, clause 6.1 of the sale agreement records that the respondents are to
pay a monthly levy to make provision for, inter alia, the following services and
charges:
‘(h)
Roads and access maintenance;
(i)
Internal street lighting;
. . .
(l)
Such costs as are incurred in the provision of security services.’

[14] This confirms that the respondents were paying levies in respect of the
maintenance of the entire property and not only a portion of the property they
occupy, as alleged by the appellant. The appellant’s contention that the life-right
holders’ housing interests in relation to the housing scheme are limited to the
occupation of their respective units only, disregards the fact that the life-right
holders bought into a scheme as described in the consolidated title deed. There is
only one title deed in respect of Erf 578. Every inch of Erf 578 forms part of the
scheme. If the scheme was intended to be used for residential purposes on part of
the property only, the endorsement against the title deed would have stated that.

[15] The purpose of the Housing Development Schemes Act is to regulate the
alienation of certain interests in housing development schemes for retired persons
and to provide for matters connected therewith. In Eden Village (Meadowbrook)
(Pty) Ltd v Edwards and Another,4 (Eden Village) this Court stated:
‘When one has regard to the objects of the Act the reason for such wide authorisation
becomes more apparent. The Act falls within the category of what might be termed “social”
or “consumer protection” legislation. Its object is to protect elderly or retired persons
investing their savings in a housing development scheme from possible exploitation by a
developer. As an example of this one may have regard to sections 2-4 of the Act, which
provide in considerable detail what a contract for the acquisition of a housing interest by

4 Eden Village (Meadowbrook) (Pty) Ltd v Edwards and Another 1995 (4) SA 31 (A) at 44A-F.

a retired person should contain: details as to exactly what he is acquiring and what his
obligations will be, and also what other facilities or services will be provided. These
sections also bind the developer to provide the facilities promised; if the landed property
is unencumbered to keep it unencumbered; and to give an estimate, for a period of three
years in advance, of what the upkeep of the scheme is likely to cost. So too, sections 4A,
4B and 4C give the holder of a right of occupation very considerable security by requiring
the endorsement of that right against the title deed, and according that right priority over
any other right, whether or not such other right has been registered or endorsed against
the title deed, and irrespective of the time when such other right was registered and
endorsed. The whole Act is designed to protect the rights and the interests of the retired
persons, and recognises the fact that the residents have a vested interest in the housing
development scheme in which they have chosen to stay.’

[16] The respondents averred in their answering affidavit that they bought into
the scheme, which presented a rustic, scheme retirement village which offered
peace and tranquillity on a large property consisting of open lawns, with a sense
of community for the elderly people residing in the flats and cottages. The
respondents and other life-right holders invested their hard-earned money into a
lifelong right not only in the units they occupy, but also into the lifestyle which the
housing scheme offered. They never anticipated that they were to spend a portion
of what remained of their lives on the porch of a large commercial building site. In
response, the appellant stated that it does not take issue with the respondents’
averments, because these will be addressed when the city council approves the
subdivision.

[17] The text of s 4B must be interpreted purposively. As stated in Eden Village,
the Housing Development Schemes Act was intended to provide protection to the
life-right owners against possible exploitation by a developer. Section 4B clearly
prohibits the appellant from alienating the proposed portion of the property without
the 75% consent of the life-right owners.

[18] As regards costs, the appellant argued that the court a quo should have
denied the respondents their legal costs or at least a major portion thereof.
According to the appellant, the respondents in their answering affidavit dealt in
great detail with the proposed DIY Systems development as it is projected, and the
impact it would have on the life-right holders’ daily lives and activities. This,
according to the appellant, was irrelevant for the adjudication of the legal point that
required determination by the court a quo.

[19] In my view, the appellant’s contentions in respect of the costs are flawed.
This application does not merely involve the question of legal interpretation of the
Act. It also involves how the respondents, as elderly people, will have to live the
remainder of their days in the housing development in which they have to stay.
They invested their hard-earned money into the scheme that represented the
retirement village which offered them peace and tranquillity on a large property.
Their future would be spent socially interacting with other elderly people in a rustic
and serene environment on a large property consisting of open lawns, with a sense
of community and not just in a specific unit occupied by them. They never
anticipated that they would have to share their peaceful space on the porch of a
large commercial building site which would impact their daily lives and activities.
Therefore, their extensive dealing with this issue in their answering affidavit was
relevant, reasonable and justified. Thus, they are entitled to their costs.

[20] In the result, the appeal is dismissed with costs including the costs of two
counsel.

_________________
F E MOKGOHLOA
JUDGE OF APPEAL

Appearances

For appellant:

A M Heystek SC
Instructed by:

VDT Incorporated, Pretoria
Phatshoane Henney Attorneys, Bloemfontein

For respondent:

D M Leathern SC (with, M Coetzee)
Instructed by:

Tintingers Incorporated, Pretoria
Honey Attorneys, 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:
20 January 2022
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
Flower Foundation Pretoria Homes for the Aged NPC v Registrar of Deeds, Pretoria
and Others (942/2020) [2022] ZASCA 8 (20 January 2022)
The Supreme Court of Appeal (SCA) today dismissed an appeal brought by Flower
Foundation Pretoria Homes for the Aged NPC (the appellant). The appeal was
dismissed with costs, including the costs of two counsel.

The appeal was against the decision of the Gauteng Division of the High Court,
Pretoria (the court a quo) dismissing the application by the appellant to declare that
the transaction between the appellant and DIY Systems and Projects (Pty) Ltd (DIY
Systems) selling part of a property, over which a housing development scheme was
registered, does not transgress the provisions of s 4B of the Housing Development
Schemes for Retired Persons Act 65 of 1988 (the Housing Development Schemes
Act).

The issue in this appeal was whether the court a quo was correct in refusing to grant
the declaratory orders sought by the appellant. Central to this was whether s 4B of the
Housing Development Schemes Act prohibited the appellant from alienating the
proposed portion 1 of the property to DIY Systems without the consent of the life-right
holders. This issue involved the interpretation of the Housing Development Schemes
Act.

The summarised facts were as follows. The appellant was the registered owner of Erf
578, Groenkloof Extension 1 (the property). During 2001, the appellant established a
housing development scheme on the property. The title deed was endorsed as such
in terms of s 4C(3) of the Housing Development Schemes Act on 5 July 2001. During
April 2015, the second to fifth respondents (the respondents) purchased a lifelong right
of occupation in respect of unit 41, garage 9 on the property. On 22 and 27 February
2018, the appellant had general meetings with the life-right owners. The purpose of
the meeting was for the appellant to inform the life-right owners of the intention to sell
a portion of the property. The appellant sought consent of the life-right owners in terms

of s 4B of the Housing Development Schemes Act. Notwithstanding the fact that the
majority of life-right holders withheld their consent, the appellant entered into a deed
of sale and option agreement with DIY Systems in around July 2018.

The SCA found that the housing development scheme was established on the entire
property and not just a portion thereof. There was only one property and one title deed.
The agreement of sale between the appellant and the respondents recorded that the
appellant has established a housing development scheme for retired persons of the
age of 60 years or older over the property. The sale agreement recorded that the
respondents were to pay a monthly levy in respect of the maintenance of the entire
property and not only a portion of the property they occupy. If the scheme was intended
to be used for residential purposes on part of the property only, the endorsement
against the title deed would have stated that.

The SCA found further that the text of s 4B must be interpreted purposively. The
Housing Development Schemes Act was intended to provide protection to the life-right
owners against possible exploitation by a developer. Section 4B clearly prohibited the
appellant from alienating the proposed portion of the property without the 75% consent
of the life-right owners.

Accordingly, the SCA dismissed the application and held that the consent of the life-
right owners was required. With regard to legal costs, the SCA held that the
respondents were entitled to their costs, because their extensive dealing in their
answering affidavit with the issue of the impact that the proposed DIY Systems
development would have on the life-right holders’ daily lives and activities was
relevant, reasonable and justified.
~~~~ends~~~~