The decision in Wary Holdings (Pty) - PULP
The decision in Wary Holdings (Pty) - PULP
The decision in Wary Holdings (Pty) - PULP
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
432 <strong>Wary</strong> Hold<strong>in</strong>gs (<strong>Pty</strong>) Ltd v Stalwo (<strong>Pty</strong>) Ltd and Another<br />
Before 1995, Farm 8 Port Elizabeth did not, despite its name, fall<br />
with<strong>in</strong> the jurisdiction of the old Port Elizabeth Municipality. It was<br />
thus deemed agricultural land. After the first round of demarcations<br />
<strong>in</strong> 1995, the farm fell with<strong>in</strong> the jurisdiction of the Port Elizabeth<br />
Rural Council, established <strong>in</strong> terms of the LGTA. Thus, <strong>in</strong> terms of the<br />
1995 amendment to the Agricultural Land Act, Farm 8 rema<strong>in</strong>ed<br />
agricultural land. <strong>The</strong> second round of demarcations saw the <strong>in</strong>clusion<br />
of Farm 8 <strong>in</strong> the jurisdiction of the newly established Nelson Mandela<br />
Metropolitan Council (NMMC), with its very much enlarged municipal<br />
boundaries.<br />
Plot 54, a subdivision of Farm 8, was sold by <strong>Wary</strong> to Stalwo for<br />
R500 000 subject to a suspensive condition of sale that <strong>Wary</strong> would get<br />
permission for the subdivision. On 19 July 2004 <strong>Wary</strong> applied to the<br />
NMMM for the subdivision of Farm 8, and to sell plot 54 thereof to be<br />
used for <strong>in</strong>dustrial purposes. <strong>The</strong> municipality agreed provided that<br />
<strong>Wary</strong> effected substantial improvements to the property (<strong>in</strong>clud<strong>in</strong>g a<br />
storm water dra<strong>in</strong>age system). This requirement imposed<br />
considerable costs and, at the same time, the value of the land<br />
<strong>in</strong>creased. <strong>Wary</strong> wanted a way out of the sale when Stalwo refused to<br />
agree to an <strong>in</strong>creased purchase price. In his quest to escape the<br />
unprofitable sale, <strong>Wary</strong> found a piece of old order legislation; the sale<br />
was contrary to the Agricultural Land Act, as the national M<strong>in</strong>ister had<br />
not given permission for the subdivision. Stalwo would have none of<br />
this exit strategy and applied to the Eastern Cape High Court for a<br />
declarator that the agreement is b<strong>in</strong>d<strong>in</strong>g and for an order transferr<strong>in</strong>g<br />
the property.<br />
<strong>The</strong> High Court found <strong>in</strong> favour of <strong>Wary</strong> and let the reticent seller<br />
escape an unfavourable deal. Stalwo felt aggrieved and appealed to<br />
the SCA where success was achieved — the sale must go through as the<br />
land could no longer be regarded as agricultural land. Now, not only<br />
was <strong>Wary</strong> dismayed, but the national M<strong>in</strong>ister saw the power of<br />
controll<strong>in</strong>g the subdivision of agricultural land disappear and jo<strong>in</strong>ed <strong>in</strong><br />
the fray to conv<strong>in</strong>ce the Constitutional Court to come to the national<br />
government’s assistance. <strong>Wary</strong> (and the M<strong>in</strong>ister) were victorious by<br />
a marg<strong>in</strong> of six to three judges — <strong>Wary</strong> was not bound by the<br />
unprofitable sale agreement as it was <strong>in</strong>valid and the M<strong>in</strong>ister<br />
reta<strong>in</strong>ed the power. Of the fifteen judges consider<strong>in</strong>g the matter,<br />
eight decided aga<strong>in</strong>st him, but seven (with the cast<strong>in</strong>g vote of six<br />
Constitutional Court justices) were decisive. By rely<strong>in</strong>g on the<br />
torturous evolution of local government as a sphere of government<br />
and its relations to prov<strong>in</strong>cial and national government, <strong>Wary</strong><br />
eventually escaped an unprofitable sale to the loss of Stalwo.<br />
<strong>The</strong> larger question to be addressed is whether local government<br />
was the loser. Moreover, does the judgment provide guidance on how