THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

REPORTABLE
Case number:  377/2006

In the matter between:

STALWO (PTY) LTD
APPELLANT

and

WARY HOLDINGS (PTY) LTD

FIRST RESPONDENT
REGISTRAR OF DEEDS                            SECOND RESPONDENT

CORAM:
FARLAM, LEWIS, JAFTA, PONNAN et MAYA JJA

HEARD:

19 SEPTEMBER 2007

DELIVERED:
28   SEPTEMBER 2007

Summary:

Contract of sale of land – whether suspensive condition a tacit term
– whether tacit term offends against sec 2(1) of the Alienation of
Land Act 68 of 1981 –  meaning of ‘agricultural land’ as defined in
section 1 of the Subdivision of Agricultural Land Act 70 of 1970.

Neutral citation:
This judgment may be referred to as Stalwo v Wary Holdings
[2007] SCA 133 (RSA)

MAYA JA/

MAYA JA

[1] This appeal concerns the validity of an agreement of sale of land
concluded by the parties. The Port Elizabeth High Court (Liebenberg J)
dismissed the appellant’s application to have the agreement declared binding
on the parties, unconditional and of full force and effect and declined to
order the respondent to pass transfer of the land to it. The appeal is with the
leave of the court below.

[2] On 6 December 2004, consequent on an advertisement placed by the
respondent in the East Cape Property Guide for the sale of ‘PLOTS FOR
LIGHT INDUSTRIAL’, the parties concluded an agreement worded as
follows:
‘SALE FROM WARY HOLDINGS (PTY) LTD TO STALWO (PTY) LTD OF PLOTS
5, 6, 7, & 8 OF PROPOSED SUBDIVISION PORTION 54 OF THE FARM NO 8 PORT
ELIZABETH FOR THE SUM OF R550 000 (five hundred and fifty thousand rand)
excluding agent’s commission.
Payment: Cash against transfer
Occupation:  10 January 2005
Possession:  On transfer
Occupational rental: R2500 per month in advance
Agreed this 6th day of December, 2004
…’

[3] The land, which the appellant intended to use for industrial purposes,
was at this stage zoned as ‘agricultural land’. However, the respondent had
lodged an application for its rezoning and subdivision with the relevant local
authority. The appellant, aware of these facts and the possibility that the
application could be rejected and the sale unravelled, duly took occupation
of the land on lease and took various steps to prepare it for use. On 26

August 2005 the local authority finally granted its approval subject,
however, to various conditions which included a requirement that the
respondent effect certain substantial improvements relating to an access
way, storm water drainage system and other essential services on the land.
Consequently, the respondent sought to increase the purchase price of the
property on the basis that the financial costs involved in complying with
these conditions significantly exceeded its expectations when the agreement
was concluded. As was to be expected, the appellant was not amenable to
the increase in price. This is what sparked the present dispute.

[4] In the court below, the respondent1 opposed the application on the
basis that the agreement was invalid for two reasons. First, it did not comply
with the provisions of s 2(1) of the Alienation of Land Act 68 of 1981 (the
Alienation Act) as it did not contain a material term, expressly agreed upon
by the parties that it was subject to a suspensive condition that the land was
to be subdivided; that it did not describe the land sufficiently and that it
omitted another material term relating to payment of the agent’s
commission. Secondly, it was in contravention of s 3(a) and s 3(e)(i) of the
Subdivision of Agricultural Land Act 70 of 1970 (the Agricultural Land
Act),2 which prohibit the subdivision of agricultural land and the sale of a
portion of agricultural land, without the written permission of the Minister of
Agriculture, as the land in issue is ‘agricultural land’ within the meaning of
section 1(i)(a) of the Agricultural Land Act, such permission not having
been obtained in this matter.

1 The other respondent, the Registrar of Deeds, Cape Town, abided the decision of the court below and is
not involved in these proceedings.
2 The Agricultural Land Act was repealed by the Subdivision of Agricultural Land Act Repeal Act of 1998,
but this statute has not yet come into operation.

[5] The court below found that the agreement did not fall foul of the
provisions of the Alienation Act. However, it concluded that the disputed
land constituted ‘agricultural land’ and that the lack of ministerial consent
rendered the agreement invalid. Leave to appeal was granted only against
this finding. In this court, the respondent did not concede the correctness of
the other finding of the court below relating to the Alienation Act. As it was
entitled to do, in view of the fact that it did not seek a variation of the
substantive order appealed against,3 its counsel persisted with the argument
advanced in the court below in this regard. The issues to be determined in
this appeal therefore remain those that were before the court below, save that
only the issue relating to the suspensive condition, as regards the point
arising from the Alienation Act, remains in contention. I deal with them in
turn.
The Alienation of Land Act
[6] Counsel for the respondent submitted that while the agreement
contained the essentialia of a valid sale, it nevertheless failed to record a
material term, expressly agreed upon by the parties prior to the conclusion of
the agreement, that the sale was conditional upon the subdivision of the land.
The omission conflicted with the requirements set out in s 2(1) and rendered
the agreement invalid, so the argument went.

[7] Section 2(1),4 whose objective is to achieve certainty in transactions
involving the sale of fixed property regarding the terms agreed upon and

3 See, for example, Municipal Council of Bulawayo v Bulawayo Waterworks Co  Ltd 1915 AD 611 at 624,
631 and 632; Western Johannesburg Rent Board v Ursula Mansions (Pty) Ltd 1948 (3) SA 353 (A) where
it was held at 355: ‘[I]t is open to a respondent on appeal to contend that the order appealed against should
be supported on grounds which were rejected by the trial judge: he cannot note a cross-appeal …unless he
desires a variation of the order’; Holland v Deysel 1970 (1) SA 90 (A) at 93D-E.
4 According to this subsection ‘[n]o alienation of land … shall be of any force or effect unless it is
contained in a deed of alienation signed by the parties thereto or by their agents acting on their written
authority.’

limit disputes,5 requires an agreement for the sale of land to be in writing
and signed by the parties. That means that the essential terms of the
agreement namely, the parties, the price and the subject-matter, must be in
writing and defined with sufficient precision to enable them to be identified.
And so must the other material terms of the agreement.

[8] What precisely is meant in this context by the expression ‘material term’
need not be decided. I say this because it was not in dispute between the
parties that their agreement was subject to a suspensive condition that the
land was to be subdivided in order to create the contemplated plots and that
such condition constituted a material term of the contract.6 It was merely
argued on the appellant’s behalf that the suspensive condition was implicit in
the description ‘…plots 5, 6, 7 and 8 of the proposed subdivision’ embodied
in the agreement which both parties knew, in any event, could not be
fulfilled without the approval of the subdivision, and that it should be ‘read
in’ as a tacit term. In response, the respondent’s counsel contended that
having expressly agreed on the suspensive condition, the parties’ failure to
reduce it to writing precluded the appellant from importing it into the
agreement as a tacit term as it now sought to do.

[9] Before a court can imply a tacit term or term implied from the facts,
which it may infer from the express terms of the contract and the
surrounding circumstances,7 it must be satisfied upon a consideration, in a
reasonable and businesslike manner, of the terms of the contract and the
admissible evidence of surrounding circumstances, that an implication

5 Wilken v Kohler 1913 AD 135 at 142; Clements v Simpson 1971 (3) SA 1 (A) at 7A-B.
6 See in this regard Johnstone v Leal 1980 (3) SA 927 (A) at 937G – 938A; Van Leeuwen Pipe and Tube
(Pty) Ltd v Murray 1985 (3) SA 396 (D); Jones v Wykland v Properties 1998 (2) SA 355 (C).
7 Alfred McAlpine & Son (Pty) v Transvaal Provincial Administration 1974 (3) 506 at 531E-532A; Delfs v
Kuehne  & Nagel (Pty) Ltd 1990 (1) SA 822 (A) at 827B-G; Wilkins v Voges 1994 (3) SA 130 (A).

necessarily arises that the parties intended to contract on the basis of the
suggested term.8

[10] Regard being had to all the relevant facts, there is no dispute as to
what was in both parties’ minds in this matter: namely that the existence of
the agreement depended wholly on the success of the subdivision
application, which would create the plots of land being sold, and that even
though they did not expressly say so in the agreement, they intended to
contract on that basis.

[11] To find that the tacit term contended for by the appellant exists, it
seems to me that once such intention is established, it matters not whether it
was expressly agreed or necessarily imported that the agreement would be
suspended pending approval of the subdivision application. This view finds
support in Wilkins v Voges,9 where Nienaber JA said:
‘A tacit term in a written contract, be it actual or imputed, can be the corollary of the
express terms – reading, as it were, between the lines – or it can be the product of the
express terms read in conjunction with evidence of admissible surrounding
circumstances. Either way, a tacit term, once found to exist, is simply read or blended
into the contract: as such it is “contained” in the written deed. Not being an adjunct to but
an integrated part of the contract, a tacit term does not in my opinion fall foul of either
the clause in question or the [Alienation of Land ] Act.’ (‘Emphasis added’.)

[12] I am satisfied in the circumstances, as was the court below, that it was
a tacit term of the agreement that it would remain suspended until the
subdivision application lodged by the respondent was finally determined.
The agreement therefore complies with the provisions of s 2(1) of the
Alienation Act.

8 Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration supra at 5312H – 533A.
9 Supra at 144C-D.

The Subdivision of Agricultural Land Act
[13] I turn to consider whether or not the agreement falls foul of the
provisions of the Agricultural Land Act. The only question to be decided in
this regard is the nature of the land when the agreement was concluded as
only a finding that it was ‘agricultural land’ within the meaning of the
Agricultural Land Act will bring it within its purview.

[14] The definition of agricultural land is contained in section 1 of the
Agricultural Land Act which reads:
‘“(i) agricultural land” means any land, except-
(a)
land situated in the area of jurisdiction of a municipal council, city council, town
council, village council, village management board, village management council, local
board, health board or health committee …, but excluding any such land declared by the
Minister after consultation with the executive committee concerned and by notice in the
Gazette to be agricultural land for the purposes of this Act;
. . .
Provided that land situated in the area of jurisdiction of a transitional council as defined
in section 1 of the Local Government Transition Act, 1993 (Act No 209 of 1993), which
immediately prior to the first election of the members of such transitional council was
classified as agricultural land, shall remain classified as such.’10

[15] The following facts were common cause. At the time of the
conclusion of the agreement, the land fell under the jurisdiction of the
Nelson Mandela Metropolitan Municipality (the NMMM), a category A
municipality in terms of s 2 of the Local Government: Municipal Structures
Act 117 of 1998 (the Municipal Structures Act).11 Prior to the establishment

10 The proviso was inserted by Proclamation R100 of 1995 published on 31 October 1995.
11 Section 2 of the Municipal Structures Act provides:
‘An area must have a single category A municipality if that area can reasonably be regarded as –
(a) a conurbation featuring –
(i) areas of high population density;
(ii) an intense movement of people, goods, and services;
extensive development; and

of the NMMM,12 the land fell under the jurisdiction of the Port Elizabeth
Transitional Rural Council (the PETRC), a transitional council as
contemplated in s 1 of the Local Government Transition Act 209 of 1993
(the Transition Act).13

[16] The first the question that arises is whether the NMMM is a
‘municipal council, city council or town council’ within the meaning of the
definition of ‘agricultural land’ in the Agricultural Land Act. The latter Act
does not define these terms. However, s 93(8) of the Municipal Structures
Act provides that ‘[w]ith effect from 5 December 2000 … any reference in a
law referred to in item 2 of Schedule 6 to the Constitution of the Republic of
South Africa, 1996…, to a municipal council, municipality, local authority
or another applicable designation of a local government structure, must be
construed as a reference to a municipal council or a municipality established
in terms of this Act, as the case may be.’ In terms of item 2 of Schedule 6 of
the Constitution ‘all law that was in force when the new Constitution took
effect, continues in force, subject to any amendment or repeal and
consistency with the new Constitution’ and ‘old order legislation …does not
have a wider application; territorially or otherwise, than it had before the
[interim] Constitution took effect unless subsequently amended to have a
wider application and continues to be administered by the authorities that

(a)  multiple business districts and industrial areas;
(b) a centre of economic activity with a complex and diverse economy;
(c) a single area for which integrated development planning is desirable; and
(d) having strong interdependent social and economic linkages between its constituent units.’
12 In terms of the Municipal Structures Act and Provincial Notice 85 of 2000 published on 27 September
2000.
13 In terms of section 1 ‘“transitional council” includes a local government co-ordinating committee, a
transitional local council and a transitional metropolitan council for the pre-interim phase, and a transitional
local council and a transitional metropolitan council for the interim phase’;  ‘“interim phase” means the
period commencing on the day after elections are held for transitional councils … and ending with the
implementation of final arrangements to be enacted by a competent legislative authority’; and ‘pre-interim
phase’ means ‘the period commencing on the date of commencement of this Act and ending with the
commencement of the interim phase’.

administered it when the new Constitution took effect, subject to the new
Constitution.’

[17] To my mind, there is no question that the Agricultural Land Act is a
piece of the ‘old order legislation’ envisaged by the Constitution and s 93(8)
of the Municipal Structures Act. That being so, the words ‘municipal
council, city council, town council’ in the definition of ‘agricultural land’ in
the Agricultural Land Act must be construed to include a category A
municipality such as the NMMM.

[18] This finding elicits another question: Did the land retain its original
status as ‘agricultural land’ by virtue of the proviso in the definition of
‘agricultural land’ (as it was classified as such prior to the election of the
first members of the PETRC) notwithstanding that it now falls within the
area of jurisdiction of a municipal council?

[19] In this regard, the court below held:
‘The proviso, in my view, provides a point in time with reference to which it must be
established if land qualifies as agricultural land. If at that point in time, it is to be
regarded as agricultural land it remains so notwithstanding any changes to local
government structures and their boundaries. This point in time is the first election of the
members of the transitional council. As stated above, it is common cause that at this point
in time Portion 54 qualified as agricultural land. It follows that it remained so and still
was agricultural land at the time the agreement was entered into.’

[20] This conclusion was based on the judgment in Kotze v Minister van
Landbou.14 In this case, Van der Westhuizen J considered whether
‘agricultural land’ as defined in s 1 of the Agricultural Land Act still exists
in view of the constitutional changes to the system of local government in

14 2003 (1) SA 445 (T).

the context of category B and C municipalities. The learned judge found that
the effect of s 151 of the Constitution, which provides that ‘the local sphere
of government consists of municipalities which must be established for the
whole of the territory of the Republic’, and the Municipal Structures Act,
which established new, different categories of municipalities with extended
boundaries, was to create ‘wall to wall municipalities’ such that all land now
falls within municipal jurisdictions, thereby rendering the Agricultural Land
Act ineffective. He held that as this could not have been the intended result,
the local government structures referred to in s 1 had to be interpreted to
mean what they meant when the Act was promulgated15 (which required a
narrow interpretation of ‘municipal council’ to exclude latter-day
municipalities such as the NMMM): in the event, the proviso meant that
since all land within the Republic fell within areas of jurisdiction of
transitional councils when these entities were established by the Transition
Act, any land which was classified as ‘agricultural land’ immediately prior
to the election of the first members of the transitional councils retains that
classification, for as long as the proviso remains in force.

[21] Counsel for the appellant challenged the correctness of this
interpretation of the proviso arguing, inter alia, that, if accepted, its effect
would be that the status of agricultural land would remain perpetually frozen
from the time when transitional councils were established and would not be
determined by whether or not land is situated within the area of jurisdiction
of the local government structures listed in the definition of ‘agricultural
land’. Developing this argument, he contended for a narrow interpretation of
the proviso which, he submitted, simply served to preserve the status quo

15 In this regard, the learned judge relied on Finbro Furnishers (Pty) Ltd v Registrar of Deeds,
Bloemfontein 1985 (4) SA (A) at 804D-E, where this court held that ‘the words of a statute must be
construed (unless subsequent legislation declares otherwise) as they would have been interpreted on the day
when the statute was passed.’

pending the demarcation and establishment of the final new order local
government structures at which time the land fell within the jurisdiction of
the NMMM and lost its historical character. I agree.

[22] The proposition that the intention of the framers of the Agricultural
Land Act contemplated the concept of ‘agricultural land’ as fluid rather than
static, changing with the expansion of local authorities and the creation of
new ones, seems to me to be eminently sound. This intention can be gleaned
from the wording of s 3(f) of the Act in terms of which ‘no area of
jurisdiction, local area, development area, peri-urban area referred to in
paragraph (a) or (b) of the definition of ‘agricultural land’ in section 1, shall
be established on, or enlarged so as to include, any land which is
agricultural land…unless the Minister has consented in writing.’16 In cases
where the Minister granted such permission the land obviously ceased to be
agricultural land. Followed to its logical conclusion, this reasoning does not
permit the narrow approach adopted by the court below. Thus, any exercise
in the interpretation of the proviso cannot ignore the present day municipal
structures created by the Municipal Structures Act. The court in Kotze in my
view misapplied the principle set out in Finbro.17

[23] It further seems to me that the purpose of the proviso must be
determined in the light of the legislative scheme which guided the
restructuring process of local government; from the promulgation of the first
statute in the exercise, the Transition Act of 1993, through to the final
demarcation brought about by the Local Government: Municipal
Demarcation Act 27 of 1998 and the Municipal Structures Act which

16 See also Geue v Van der Lith 2004 (3) SA 333 (SCA) para 8.
17 In Finbro the court took the lack of any definition of the word ‘mineral’ as an indication that the
Legislature intended it to have a wide meaning to enable the inclusion in its meaning of substances which
were not yet discovered when the relevant act, the Deeds Registry Act was enacted in 1937.

established new categories of municipalities – to use existing statutory
provisions until new ones could be enacted. A similar view was expressed
by Conradie JA in an analogous situation in CDA Boerdery Edms Bpk v
Nelson Mandela Metropolitan Municipality,18 where he said:
‘[I]n the process of constructing the new edifice and before it could stand on its own,
some of the essential transition measures … were legislatively imperfect. They were
makeshifts, intended to remain in force, messy as they were, until they were repealed by
the Act that completed the design of the new structure…. But before the structure was
finished, all the provinces in the new South Africa were, temporarily, intended to make
do with what they had inherited from the provinces in the old South Africa.’

[24] It is well to consider that the proviso was enacted within the context
of the Transition Act which, as indicated, was itself meant to provide interim
measures such as the establishment of interim municipal structures to
promote the contemplated constitutional restructuring of local government,
pending the final demarcation of municipal boundaries. The proviso makes
specific reference to ‘land situated in the area of jurisdiction of a transitional
council’ which it states ‘shall remain classified as such’. From the ordinary
grammatical meaning of the words, I am unable to read any meaning other
than that the proviso was meant to operate only for as long as the land
envisaged therein remained situated in the jurisdiction of a transitional
council. It was a simple matter for the Legislature to say so expressly if it
intended such land to retain the classification after transitional councils
ceased to exist.

[25] Bearing in mind the trite principle that exceptions to general rules
(such as the proviso) are to be read restrictively,19 I am persuaded that the

18 2007 (4) SA 276 (SCA) para 30. His was a dissenting judgment but not in relation to this dictum.
19 Norwich Union Life Insurance Society v Dobbs 1912 AD 395 at 399; South African Broadcasting
Corporation v Pollecutt 1996 (1) SA 546 (SCA) at 556D.

Legislature enacted the proviso as a stopgap measure, based on the
realisation that the effect of the Transition Act, which would establish
municipalities for rural areas for the very first time, would be to include
transitional councils within the meaning of ‘municipal council’ envisaged in
the definition of ‘agricultural land’, thus excluding certain agricultural land
from the definition – clearly an untenable situation. Therefore, once the
PETRC was disestablished and the land fell within the jurisdiction of the
NMMM, it ceased to be agricultural land within the meaning of the
Agricultural Land Act and the agreement is not affected by the proviso. In
my view, the fact that the proviso remains in the statute book takes the
matter no further. Accordingly, the interpretation afforded to it by the court
below and the Kotze judgment cannot be sustained.

[26] I am fortified in this view by the following. First, the approach
adopted by the court below is incompatible with and does not give credence
to the radically enhanced status and power the new constitutional order
accorded to local government.20 Municipalities are no longer the pre-
constitutional creatures of statute confined to delegated or subordinate
legislative powers, which could be summarily terminated and their functions
entrusted to administrators appointed by the central or provincial
governments. They have mutated to interdependent and, subject to
permissible constitutional constraints, inviolable entities with latitude to
define and express their unique character and derive power direct from the
Constitution or from legislation of a competent authority or from their own
laws.21 To my mind, this status necessarily includes the competence and
capacity on the part of municipalities to administer land falling within their
areas of jurisdiction without executive oversight.

20 CDA Boerdery v Nelson Mandela Metropolitan Municipality 2007 (4) SA 276 (SCA) paras 33-40.
21 Fedsure Life Assurance v Greater Johannesburg TMC 1999 (1) SA 374 (CC) paras 31 and 38; City of
Cape Town v Robertson 2005 (2) SA 323 (CC) para 60.

[27] In any event, the Minister, in terms of the very definition of
agricultural land, retains the power to exclude any land from the exceptions
imposed by it, and declare it ‘agricultural land’ for purposes of the
Agricultural Land Act, a fact which, with respect, the learned judges in
Kotze and the court below seem to have overlooked, their reasoning being
premised on the basis that any other interpretation of the proviso would lead
to the emasculation of the Agricultural Land Act. The object of the
Agricultural Land Act, as expressed in its preamble, is ‘to control the
subdivision of agricultural land’ so as to prevent the fragmentation of
farming land into small, uneconomic units.22 Section 3 of the Act still
prohibits subdivision of agricultural land without the Minister’s permission.
Having regard to these provisions there clearly is no possibility that this
objective may be thwarted.

[28] In conclusion, I am satisfied that the disputed land, which is in fact no
longer used as agricultural land, is not agricultural land. The provisions of s
3 of the Agricultural Land Act have no application to the parties’ agreement
and the Minister’s consent is not required as a prerequisite for its validity.

[29] For these reasons the appeal is allowed with costs, such costs to
include the costs occasioned by the employment of two counsel. The order
made by the court below is set aside and the following order is substituted:
‘1.
The agreement of sale entered into between the first respondent and
the applicant on 6 December 2004 in respect of Plots 5, 6, 7 and 8 of the
proposed subdivision of Portion 54 of the Farm Kuyga No 8, Western
District Council, Port Elizabeth (the property), is declared binding on the
parties and unconditional and of full force and effect.

22 Geue v Van der Lith 2004 (3) SA 333 (SCA) para 5.

2.
The first respondent is ordered to take all steps and to sign all
documents as may be necessary to effect transfer of the property to the
applicant against compliance by the applicant of its own obligations in terms
of the agreement of sale.
3.
The first respondent is ordered to pay the costs of this application.’

……………………
MML MAYA
JUDGE OF APPEAL

CONCUR:

FARLAM )
LEWIS )
JAFTA )
PONNAN )

THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

MEDIA SUMMARY – JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

MEDIA ALERT – STALWO v WARY HOLDINGS
From:
The Registrar, Supreme Court of Appeal

Date:
28 September 2007

Status:
Immediate

Please note that the media alert is intended for the benefit of the media
and does not form part of the judgement of the Supreme Court of Appeal

The Supreme Court of Appeal today upheld an appeal against a judgment of
the Port Elizabeth High Court in which it dismissed the appellant’s application
to have the parties’ agreement of sale of land declared binding on them,
unconditional and of full force and effect and declined to order the respondent
to pass transfer of the land to it.

The issues in the appeal were whether the agreement (a) offended against
the provisions of (a) s 2(1) of the Alienation of Land Act 68 of 1981 because it
failed to record a material term upon which the parties had expressly agreed,
that the sale was conditional upon the success of a subdivision and rezoning
application to the relevant local authority and (b) whether the land (which now
fell under the jurisdiction of Nelson Mandela Metropolitan Council having
previously been under the jurisdiction of the Port Elizabeth Transitional Rural
Council) was ‘agricultural land’ as contemplated in the definition of
‘agricultural land’ in s 1 of the Subdivision of Agricultural Land Act 70 of 1970
which excludes land within a municipality; in which event it would be rendered

invalid because permission had not been obtained for the subdivision and
sale of the land from the Minister of Agriculture in accordance with s 3 of this
Act.

The SCA decided both issues in the appellant’s favour. Regarding the first
issue, it was found that a tacit term could be imported into the parties’ contract
that it was subject to the suspensive condition as it was clear that they
intended to contract on that basis, whether or not that term was expressly
agreed upon.

The second issue turned on the interpretation of the proviso in s 1 of the
Subdivision of Agricultural Land Act which excludes from the exceptions set
out in the definition ‘land situated in an area of jurisdiction of a transitional
council as defined in s 1 of the Local Government Transition Act 209 of 1993,
which immediately prior to the first election of the members of such
transitional council was classified as agricultural land’. The SCA held that the
Nelson Mandela Metropolitan Council is a municipality as contemplated in the
definition. It held further that the proviso must be interpreted restrictively, as it
is an exception to the general rule, and within the context of the legislative
scheme which guided the restructuring process of local government which
was to use existing statutory provisions (such as the proviso) until new ones
could be enacted.

The SCA held that the proviso was an interim measure which was meant to
operate only for as long as the land envisaged therein remained situated in
the jurisdiction of a transitional council. The SCA concluded that the land lost
its historical character as agricultural land once it was brought within the
Nelson Mandela Metropolitan Municipality and that, accordingly, it did not fall
within the purview of the Subdivision of Agricultural Land Act.