Original Acquisition of ownership

Original vs derivative, Appropriation, accession, planting & building, manufacture, mixing, acquisition of fruits, expropriation, prescription

Sources

• Prescribed textbook 98-123.
• Gore v Parvatas (Pty) Ltd 1992 (C)
• Macdonald v Radin and The Potchefstroom Dairies and Industries Co 1915 (A).
• Standard-Vaccuum Refining Co. of SA v Durban City Council 1961 (A).
• Mpisi v Trebble 1994 (A)
• Kostanz Properties (Pty) Ltd v WM Spilhaus (WP) Bpk 1996 (A).

Preliminary remarks

• SA law distinguishes between original & derivative acquisition of ownership:
• Original ownership does not depend on lawful ownership of predecessor while derivative requires such. Original acquisition is through appropriation occupatio of res nullius or res derelicta.
• Cooperation of previous owner not required in original but not possible in derivative without such cooperation.
• In some instances of original acquisition, previous owner may exist but his cooperation unnecessary in case such as accession, prescription, expropriation [by operation of the law].

Appropriation (occupatio)

• Unilateral exercise of physical control of things capable of being owned but currently unowned (derelicta, res nullius).
• Requirements are that acquirer must exercise physical control, with intention of being owner of a corporeal thing not belonging to anyone.
• Control must put controller in position where he can use thing as he wishes.
• Thing must not belong to anyone hence res derperditae will not qualify.

Unowned things and Principles applicable to them

• Wild animals, birds, reptiles, fish, insects;
• Caged, kraaled & enclosed wild animals in terms of Game Theft Act 105 of 1991.
• Domesticated animals are wild by nature & have habit of returning to owner, once habit to return ends, no longer owned & may be appropriated.
• Domestic animals are not wild animals, remain property of owner, irrespective of where they are. Exception is when abandoned or become too wild. Produce from such animals belong to owner by appropriation.
• Renewable products of sea such as shells, grass, fish may be appropriated. Sea shore however belongs to public.

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Abandoned things [res derelictae]

• May be appropriated because they are lost or thrown away by the previous owner with intention of renouncing ownership.
• If lost but owners still has interest, then may not be appropriated.
• Some things may not become res derelictae but state property e.g. unclaimed inheritance [bona vacantia-assets without an owner].

Accession

• Happens when there is fusion between two things in such a manner that one things becomes so imbedded in the other that, loses its physical & economic independence & new thing is formed.
• Thing that loses independence is accessory thing while main one is principal thing & new one is composite thing.
• May happen naturally or through human intervention.
• Strictly speaking not way of acquiring ownership but coz it happens without cooperation of owner, regarded as original acquisition.

Accession…

• Ownership of accessory not transferred but accessory becomes part of composite & not capable of being owned alone.
• Composite thing must not easily be indivisible, principal & accessory to remain identifiable & accession must not result in manufacture.
• Test of distinguishing between accessory & principal thing: (1) which one lost independence?, (2) which one has greater mass? (3) which one merely decorates?

Accession of immovables to Immovables

• Usually takes place naturally or by gradual adding of soil to a piece of land by alluvion or sudden addition to piece of land through flooding (avulsion).
• Alluvion: gradual addition of soil (unnoticed) to land by water through deposits of mud, silt, soil. Mud, silt etc. becomes property of owner of land on which deposited.
• Avulsion: extension of piece of land through sudden addition of piece of land caused by flooding or flow of water. Addition is visible through sudden & violent avulsion of piece of land to existing land.

Accession of immovables to Immovables…

(c) Forming of Islands

• If island formed in river through natural flow of water, owners of adjacent land on either sides (or of land over which it flows t that point) of the river become owners of new island.
• Riparian owners & riparian rights.

Accession of Movables to Immovables

• Usually through human intervention where movable is attached to immovable permanently.
• Owner of immovable becomes owner of composite thing in case of permanent attachment.
• Owner of immovable may in some circumstances be asked to compensate owner of movable.

Accession of movables to immovables: Notes

• In this case, movable is always regarded as accessory thing while land (immovable) is the principal thing.
• Movable accessory thing transforms into immovable through doctrine of supeficies solo cedit (owner of a piece of land owns everything permanently attached to it)

Accession of movables to immovables

• Planting and sowing:
• Growing movables get attached to land & become property of owner.
• Everything growing on soil becomes part of land upon taking root & obtaining nourishment from land.
• Examples: plant removed belongs to owner of land from which removed, plant owned where it gets nourishment, plants on common boundary land belong to where they get most nourishment, possible for plants in this case to be co-owned. Not applicable to cases where contract specifies otherwise (Gore v Parvatas (Pty) Ltd 1992).

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Accession of movables to immovables

(b) Building (Inaedificatio)

• Process whereby movable is attached to land in such way or with intention that it becomes part of the land & property of land owner.
• Three criteria have traditionally been used to determine permanence of attachment:
• Nature & purpose of attached thing (objective);
• Manner & degree of attachment (objective);
• Intention of the annexor (subjective)

Nature & Purpose of thing attached

• Thing must be of such nature that it can be permanently attached & purpose for attaching must be to be of use to land on permanent basis e.g. roof tiles.
• If no clarity, resort to the other two criteria, namely manner & degree of attachment & intention of annexor.
• Examples from case law: tanks permanently built on land (Standard Vaccum Refining Co. of SA v Durban City Council 1961), materials to build squatter shacks (Mpisi v Trebble 1994)

Manner & Degree of Attachment

• If Manner & degree of attachment shows permanence, therefore, no need to proceed to check subjective intention of annexor.
• Can accessory thing be removed without damage to the principal thing?
• Accessory thing must be attached ‘as firmly as the soil’ or ‘as firmly as a nail’.

Intention of the annexor

• Resorted to when above two considerations do not decide matter.
• Subjective enquiry.
• Objective intention of annexor can be discerned from nature & purpose and manner and degree of attachment.
• E.g. subjective (ipse dixit) intention may be determined by resort to direct & derivative evidence (Theatre Investments v Butcher Brothers 1978). Lift in a building may, subject to concluded contract, be regarded as not forming part of building (Melcorp SA v Joint Municipal Pension Fund 1980)

Problem with subjective intention of annexor: Criticism

• Reliance on subjective intention conflicts with principle of inedificatio in original acquisition of ownership.
• Need to focus on causa (purpose) of attachment rather than subjective intention by resorting to facts like:
• Nature & function of attached thing;
• Manner of attachment;
• Subjective intention of owner of attached thing at time of attachment;
• Actions/conduct of the owner of the attachment;
• All other relevant facts & circumstances [Sumatie (Edms) Bpk v Venter 1990 (T)]

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⋆⋆what are the remedies then? (enrichment, removal)

Manufacture

• Making a completely new thing out of materials owned by another person without that person’s permission.
• This is known as manufacture (or “specification”, a word derived from the Latin word “specificatio”).
• The product manufactured is then owned by the manufacturer.
• product must be a completely new thing and be incapable of being returned to the state of the raw materials from which it came.

Manufacture ….

• owner of the material can, claim compensation from the manufacturer of the product. What can be claimed, and how it can be claimed, depends on the state of mind of the manufacturer. If the manufacturer genuinely believed the materials were his, the owner of the materials has only an enrichment claim for the value of the materials. If there was bad faith, he has a damages claim under the Aquilian action.

Requirements for passing of ownership through Manufacture

• New thing must come into being, not repair or add to. Whether new thing materialises is objectively determined.
• No longer possible to change product to original form e.g. wine from grapes, petrol from crude oil etc.
• Manufacturer must have been in good faith that he is owner of material. NOT SUPPORTED.
• Thing must be manufactured without permission of owner of the material.
• Remedies: Enrichment action, damages (prove negligence on manufacturer), compensation for labour if ownership was not passed.

Expropriation

• Expropriation is the taking of ownership by an authority statutorily empowered to do so, against the payment of compensation.
• Expropriations follow the procedure set out in the Expropriation Act 63 of 1975.
• Compensation must be calculated in a manner consistent with section 25 (3) of the Constitution. A solatium of 10% is normally paid in addition to the actual loss incurred to the owner by the expropriation.

Principles of expropriation

• Ownership of expropriated now vests in expropriator & previous owner loses ownership without consenting.
• Institutions wanting to expropriate must have power to do so, found in empowering statute.
• Examples of statutes: Broadcasting Act, Electricity Act, National Environmental Management Act, National Water Act.
• Compensation must be calculated in terms of general provisions of s25(3).
• Possible to expropriate an entitlement without affecting ownership (see s2 on right to use temporarily for public purposes).

Procedure for expropriation

• Decision to expropriate is administrative, & unless ultra vires, may not be tested by the court (s6).
• Notice of expropriation must be served on owner (s7)
• Passing of ownership takes place automatically on date mentioned in the notice of expropriation.
• Procedure for claiming, negotiating etc. of payment of compensation is set out in s7(2) (c) & (d) (9)-(12).
• If no agreement on comp. it has to be decided by compensation court, land claims court or High Court.

Compensation

• Comp must be agreed upon (s25 of C) if not court must determine what is just & equitable, taking into account public interest & those affected. Factors to take into account:
• Current property use;
• History of acquisition & use of property.
• Mkt value of property;
• Extent of state direct investment & subsidy in acquiring the property;
• Purpose of the expropriation

Principles

• Principles must influence the application of the provisions of the Act.
• Compensation for real financial loss suffered may be claimed Kangra Holdings v Minister of Water Affairs.
• E.g. primary residence expropriated: costs of looking for house, transport costs, moving costs, costs of new curtains & furniture etc.
• Solatium of 10% of total amount not more than 10 000 may be claimed.
• Compensation only for loss not to advantage of owner.

Statutory Passing of ownership

• In this case, still original because cooperation of owner is not a prerequisite.
• Limitations it title of previous owner also passed on to new owner.
• E.g in personal insolvency, assets of sequestrated estate pass on to master of High Court immediately after order & later temporarily to curator if appointed (s20(1)(a)).
• S361(3) of CA assets of liquidated co. pass to liquidator in official capacity if appointed, before then, they vest in master of the high court.

Acquisitive Prescription

• Original way of acquiring ownership (real right or Ltd real right) in movables or immovable by openly possessing undisturbed or exercising rights thereto (ltd real rights) for an uninterrupted period of 30 years.
• Rationale is to discourage non exercise of property rights & ensure legal certainty regarding de facto position that has existed for a long time.
• Certainty required for rights of possessor & creditors & limitations on litigating ownership.
• Runs in favour of bona fide & mala fide possessor.

Prescription

• Important to distinguish between acquisitive prescription and extinctive prescription.
• Acquisitive governs the principles applicable to the passing of ownership after a long period of possession by a non-owner.
• Extinctive prescription regulates the time periods within which claims for repayment of debts must be brought before the courts.
• Statute applicable to acquisitive prescription is the Prescription Act 68 of 1969. Parts of its predecessor (the Prescription Act 18 of 1943) are still in force, and apply to prescription which commenced before 1 December 1970.
• Due to time which has elapsed since the passage of the 1969 Act, it is unlikely that the 1943 Act will be relevant in any but the smallest number of cases. We will accordingly concentrate on the 1969 Act.

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Acquisition of ownership Through prescription

• S2 (1) of Act person becomes the owner of a thing if he openly exercises the rights associated with ownership for an uninterrupted period of 30 years.
• Happens if control happens:
• Without force (nec vi)
• Openly (nec clam)
• Without consent (nec precario)
• As if he were the owner.

Possession: Implications

• Need to distinguish between physical element (corpus) & mental element (animus);
• Physical implies actual control of thing judging from surrounding context/elements;
• Animus is the intention to be owner (animus domini) irrespective of good or bad faith.
• Possession contemplated here is possessio civilis, (as if owner) above two elements present.

• Must be reasonably deducible that possessor intended to exercise ownership rights e.g. making permanent improvements on the land.
• Possession must not be interfered with for 30 years (e.g. voluntary loss of possession or claim from owner interrupts).
• If interfered with, then period runs afresh & counting de novo commences.

Requirements…

(b) Without force: Possession cannot be perpetuated using force, however, force may have been used in asserting original possession.

(c) Openly: Possess openly not secretly. Openly does not imply openness towards owner but use like normal owners would do (openly!). Not open in acquiring original possession.

(d) Without consent: Will/wishes of owner irrelevant here. If consent of owner was sought/acquired then prescription not possible.

(e) Use must be adverse to owner (Malan v Nabygelen Estates) not use by virtue of some contracts such as lease, usufruct recognising the actual owner.

(e) Period of 30 years:

-Must run continuously with no breaks;

-terms of possessor’s predecessors who met requirements may be added.

-if predecessor did not meet any of the requirements, then interruption and predecessor’s terms cannot be added to current period.

What is interruption?

• This happens when an event terminates the run of prescription, so that period of 30 years must run anew.
• Natural interruption: Possessor gives up thing voluntarily or forced (by owner, superior power or war) to relinquish possession.
• Civil interruption: serving of court process (summons, warrant, notice of motion, interdict etc) on possessor with owner claiming ownership.

Natural interruption S2 of Act: Possession lost & Gained

• The possessor involuntarily loses possession of the property and brings legal proceedings to recover possession within 6 months of losing it; and/or
• The owner brings proceedings in respect of the property in which he or she asserts ownership over it, but does not prosecute his or her claim to conclusion, or abandons a judgment in his or her favour.

S2 of Act

• Thing restored to possessor within 12 months after loss of possession by psn who disturbed possession/someone else.
• Situation of force/superior power has changed & loss of possession falls away.
• In absence of any of above circumstances, or possession voluntarily lost, then interruption occurs & run of prescription is terminated.

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Civil interruption s 4

• S4(1) interruption by service of summons or any other claim where psn claim ownership in thing.
• Such interruption shall lapse, & prescription deemed as not been interrupted, if claim is not successful or abandoned midway through.
• If interference in this way then new period of prescription starts to run on day of judgement.

What is suspension?

• Occurs when period of prescription is suspended for some time due to an event or situation, thereafter resumes and takes over from where the run of prescription had gone.
• Event is an impediment of a temporal nature e.g inability to enforce one’s rights [minors, mentally ill, persons under curatorship, absent persons, persons unable to handle own affairs.
• As soon as impediment falls away, period starts to run normally.

When can Prescription be suspended? S3 of the Act

• The person against whom it runs is a minor, or insane, or under curatorship or prevented by circumstances beyond his control from interruption prescription; or
• The person in whose favour prescription runs is outside South Africa, married to the person against whom prescription is running, or is a member of the controlling body of a juristic person against whom prescription is running.

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Notes on suspension periods: Method of Calculation

• If period of suspension ends more than three years before the period in which prescription would be completed, prescription continues to run as if unsuspended.
• If it ends after, until or three years before the date on which prescription would be complete, prescription must run for an additional 3 years after the date on which it would otherwise be complete.
• See examples in textbook.

Examples

• A, a minor is 3 and his farm is taken by B with animus domini. A will be a major in 15 years (majority age is 18) & prescription still left with 15 years (ceases to exist longer than 3 years b4 full run). Minority has no effect here.
• B has been in possession of farm for 15 years. Farm inherited by 3 year old minor on 15^th year. Minor will be major 15 years later, period when prescription would have run full course (ceases to exist less than 3 years before!). Must run for 3 more years after B’s attainment of majority.

Requirements in terms of Act 68 of 1969 (Current)

• Possession (as in previous Act); openly (as in previous Act) as if he were owner (both physical & mental elements must be present); for 30 years.
• Examples of physical control from case law: making permanent improvements, use of neighbouring farm part due to bona fide mistake of extent of boundary, use of neighbour's part as if yours while you know it is not yours, occupation in terms of a perpetual contract to occupy is not indicator of control in this context.

Requirements in terms of Act 68 of 1969 (Current

For 30 years:

• Exercise of use during this period is not absolute, neither does it have to be with respect to whole thing.
• Must be uninterrupted.
• Periods of previous possessors from whose title one derives may be added.

Effect of complete run of prescription

• Once prescription is complete, the possessor becomes owner notwithstanding the absence of transfer of the property into his or her name, or the absence of delivery of the property to him or her.
• For state land [state Land Disposal Act 48 of 1961 s3] state land may not be acquired by prescription.