MUNICIPAL NATIVE LOCATIONS

Disposal of improvements on trading sites in East

London

Municipal Native Locations does not require Council’s consent but only that of Superintendent

—

option to purchase trading rights in respect of such sites not affected by prohibition in regulations.

Summary:

Thiswas an appeal from the judgment of a Native Commissioner’s Court requiring the Defendant (Present Appellant) to pass transfer to the Plaintiff (now Respondent) of the shop and dwelling houseonsite No. 1596 in

Duncan

Village, East London, and to sign the necessary documents to give effect to such transfer against the tender by the Plaintiff to the Defendant of £500lesscertain deductions,in

an action brought by the former against the latter for this relief.

An

application for the

amendment

of the grounds of appeal was opposed by Respondent’s counsel, firstly, on the ground that the proposed

amendment

introduced allegations of fact which

now

were being raised for the first time and had not been canvassed in the NativeCommissioner’s Court so that the points of law based thereon could not prevail and, secondly, because the further illegalities alleged in the proposed

amendment

did not flow from the contract itself

and inany^{event there}was no clear proof of such illegalities so that it was not proper for this Court to take cognizance of them. Counsel for Respondent conceded, however, that these points could be taken equally effectively should the

amendment

be allowed and that he eould not advance the contention that such a course would result in prejudice to theRespondent.

The

applicationwas granted.

The

action was based on an option to buy the improve- ments i.e. the shop and dwelling, on the trading site in question giventothe PlaintiffbytheDefendant andexercised by theformer.

The

appeal wasbrought on several grounds amounting to thisthat the wholetransactionwasillegal andunenforceable on the ground that the Council’s approval required under the relevant Regulationhadnotbeen obtained.

Held:

As

the points relied upon in opposing the application for the

amendment

ofthe grounds of appeal could be taken equally effectively should the

amendment

be allowed and as such a coursewould notresult inprejudice totheRespondent but lent itselftoa betterconsideration of the points involved in the appeal, that the application should be allowed.

45

Heldfurther: That under the relevantRegulations the Council’s consentwasnot required forthedisposal oftheimprovements but onlythat of the Superintendent.

Held further: That an option to purchase trading rights in res- pect of the site in question was not affected bythe prohibi- tion in section twenty-two of the Regulations as such a transaction did not fall within the purview of that section.

Held further: That, in keeping with the principle underlying the proviso to section fifteen of the Native Administration Act, 1927, it was proper for this Court to cure the irregu- larity in the NativeCommissioner’s judgment by eliminating therefrom the order on theDefendant topasstransfer of the improvements to the Plaintiff and by only requiring the Defendant to sign such documents as

may

be necessary to enable the Plaintiff to apply to the Municipality for their transfer to him as suggested by counsel for Respondent as such a course would not result in prejudice andwould best serve the interests of justice seeing that theNative

Commis-

sioner’sjudgment wasnot only not attackedonthemeritsbut exfacie the record appearsto dojustice between the parties and the adoption of this course would

make

it unnecessary forthisCourtto raisemero

motu

thequestion of the joinder of theSuperintendent inthe instantaction and asa result to hold that the Native Commissioner’s Court had no jurisdic- tion to try it in the light of

Ndonga

and

Lumko

versus

Mapoma,

1960, N.A.C. 71 (S).

Casesreferred to:

Ndonga

and

Lumko

^versus

Mapoma,

1960,

N.A.C

71 (S).

Nthaka

versusNthaka, 1959, N.A.C. 79 (C).

Appeal from the judgment of the Assistant Native

Commis-

sioner,EastLondon.

Balk (President):

This is an appeal from the judgment of a Native

Commis-

sioner’sCourtrequiring the Defendant(present appellant) to pass transfer to the Plaintiff (now respondent) of the shop and dwel- ling house on site No. 1596 in

Duncan

Village, East London, and to sign the necessary documents to give effect to such transfer against the tender by the Plaintiff to the Defendant of

£500 less certaindeductions, in an action brought by the former against thelatter for thisrelief.

The

Defendant preferred a counterclaim but the judgment thereon does not call for consideration as there is no appeal therefrom.

The

appealis brought onthe following grounds:

—

“_1. That the judgment is bad in law inasmuch as

—

(a) the right of option given by Defendant to Plaintiffto purchase theproperty 1596

Mngqika

Street,EastBank Location, East London, interms of Clause 6 of agree- ment entered into between Plaintiff and Defendant on the 20th October, 1956, wasillegal andunenforce- able, and Plaintiffcannot legally rely thereon, having regard to the Trading Regulations obtaining in the East

London

Municipal Location published on the 22ndAugust, 1952,underProvincialNoticeNo. 624/52 as such regulations prohibit the disposal by a trader of trading or business rights in the Location to any person otherthan aNativeapprovedofbytheConcil;

(b)that the exercise of such option to purchaseby Plain- tiffinNovember,1959,orin March,1960,oranyother date subsequent to the 4th November, 1959, wasalso illegal and unenforceable, having regard to the Regu-

46

lationsgoverningTrading or BusinessrightsandTrad- ing Site Permits, obtaining in the East

London

Muni- cipal Location as publishedon 18th April, 1957,under Provincial Notice No. _260/57, which Regulations were

then and are still of force and effect, and which

prohibit the disposal by a trader of his trading or business rights in the Location, or the transfer ofhis trading site permit to any person other than a Native approved of by the Council; and such approval has not been obtained;

(c)that having regardtotheEast

London

Municipal Loca- tion Regulations regarding Tradingand Businessrights and Trading Site Permits, which obtained in 1956, 1959, 1960, and ^at the time of the judgment, the Assistant Native Commissionercould not legally

make

the order in terms of judgment given by him, and particularly the order on Appellant to pass transfer to Respondent of the said property 1596

Mngqika

Street, as transfer of the Site Permitin respectof the said property could not be legally enforced in view of the fact that the said Respondent had not been approved of by the Council, and its consent had not been obtained to transfer or disposal of the trading site permit in respectof the said property;

{d)that having regard to agreement filedofrecord Exhibit B^’ the said right ofoption and theexerciseof such right option to purchase property situate at 1596

Mngqika

Street,

Duncan

Village, East London, was intended for the purpose of conducting NativeTrading therein

—

^{(and not for demolition of the said}

property)

—

which purpose was prohibited by the aforesaid Regulations hereinabove detailed, and such right of option and/or the exercise of such right of option were therefore illegal, void and unenforceable;

(e)that in any case transferof the Site Permit of the said property, even for residential purposes, could not be enforced in view of the fact that the consent of the Location Superintendent or the Council has not been obtained, having regard to Regulations 8 and 10 of the aforesaid East

London

Municipal Regulations published on 18th April, 1957, underProvincial Notice No. 260/1957.”

These grounds

embody

an

amendment

allowed by this Court on application by Mr. Kaplan

who

appeared for the appellant.

The application was opposed by counsel for Respondent, firstly,

on the ground that the proposed

amendment

introduced allega- tions of fact which

now

were being raised for the firsttime and had not been canvassed in the Native Commissioner’s Court so that the points of law based thereon could not prevail and.

secondly, because the further illegalities alleged in the proposed

amendment

didnot flow from thecontract itselfandin anyevent there was no clear proof of such illegalities so that it was not proper for this Court to take cognizance of them. Counsel for Respondent conceded, however, that these points could be taken equally effectively shouldthe

amendment

be allowed and thathe could not advance the contention that such a course would result in prejudice to the Respondent. That being so and as this Court considered the elaboration of the grounds of appeal by

way

of the proposed

amendment

lent itself to a better con- sideration of the points involved in the appeal, it granted the application.

Turning to the appeal, the Assistant Native Commissioner’s judgment is based on the exercise by the Plaintiff of the option referred to in clause 6 of the written agreement entered into

47

between the parties on the 20lh October, 1956 (Exhibit “B ),

the clauses ol which insofar as they are material here read as follows:

—

“Whereas

the said Skey (Defendant) is the registered owner of certain improvements consisting of a shop and dwelling situated at Site No. 1596

Mngqika

Street,

Duncan

Village, East London;

and whereas the said Skey is indebted to the said

Mzamo

(Plaintiff) in the

sum

of eight hundred pounds (£800) in respect of

money

actually lent and advanced to

him

by the said

Mzamo;

and whereas ^{thesaid .Skey has agreed to grant the use of} the said shop to the said

Mzamo

on the terms and condi- tions set outin this agreement;

and whereasthe Parties hereto have furthermoremutually agreed to bind themselves in respect of the aforesaid loan ofeight hundred pounds(£800) in themanner setforth here- under;

Now

therefore these presents witness:

—

1. Thatthe said

Mzamo

shall havethe use of thesaidshop together with the fixtures and fittings contained there- in for a period of three (3) years

commencing

on the 1st day of November, 1956 and terminating on the 31st day of October, 1959.

The

said

Mzamo

acknowledges that the said Skey shall continue to enjoy the sole and undisturbed use and occupation of the dwelling adjoining the said shop.

6. That on the expiration of this agreement as set out in Paragraph 1 above i.e. on the 31st day of October, 1959, the

amount

of £800(eighthundred pounds)owing bythe saidSkey tothe said

Mzamo

^{aforesaidtogether}

with interest thereon at therate of fiveper cent (5%) per

annum

shall

become

immediatelydueandpayable.

In theeventofpayment thereofbythe saidSkeywith- in seven (7) days of due date, the said

Mzamo

shall nevertheless be entitled to have the use of the said shop for a further period of three (3) years as from the 1st day of November, 1959, to the 31st day of October, 1962, on the sametermsand conditionshere- inbefore set out. In the event of the said Skey’s inability and/or failure to

make

payment of the said

amount

within seven (7) days of due date, the said

Mzamo

shall have the option,which isherebygranted to him by the said Skey, to purchase the property comprising the shop and dwelling situate at Site No. 1596

Mngqika

Street,

Duncan

Village, East Lon- don, as aforesaid on payment by

him

to the said Skey of the additional

sum

of five hundred pounds (£500) in cash. Should the said

Mzamo

exercise such option, the aforesaid

amount

ofeight hundred pounds (£800) together with Interest due thereon shall be regarded as forming part of the Purchase Price of the saidproperty and shall be set offagainst the said PurchasePrice.

8. That in theevent of the said

Mzamo

acquiring owner- ship of the said property in the

manner

set forth inParagraph 6and 7 above, the saidSkeyundertakes to sign all such documents and to do all such other acts as

may

be necessary to effect transfer thereof into the

name

of the said

Mzamo

or his Nominee.”

The

Defendant alleged in his plea that clause 6 of the agree- ment (Exhibit ^“B^”) was illegal but he did not specifyin which respect or on what ground and in any event this aspect was 2641433-3

48

not pursued at the trial in theNative Commissioner’s Courtnor were theallegations of facton which the points of lawraised

on

appealare based, canvassedin thatCourt.

In support of his argument in pursuance of ground of appeal

1 (a), Mr.Kaplan reliedon sections2,3, 14and22 of the trading regulations published under Provincial Notice No. 624 of 1952 which were handed in by

him

at the inception ofthat argument with the leave of this Court and which, at the time the agree- ment(Exhibit ^“

B

”) was enteredinto bythe parties, obtained in that

Duncan

Villagewas a MunicipalNative Villageinthe urban areaof EestLondon, asconcededbycounselfor Respondent,and these regulations applied to such Native Villages by virtue of the opening paragraph thereof. These regulations were super- seded bychapter 4 of the regulations published underProvincial Notice No. 260 of 1957, which were also handed in by Mr.

Kaplan and ^arerelied upon in theremaining grounds of appeal.

Sections2, 3, 14 and 22 of the 1952 and 1957 regulationsare

much

the same. In both cases section 2 provides^for the allot-

ment of trading sites and the continuation of existing businesses subject to permission by the East

London

City Council and to the regulations, section 3 prohibits trading by any person other- wise than on the site alloted to

him

bythe Council forthatpur- pose and section 14 requires the allottee personally to carry on and supervise the business. Section 22 of both sets of regulations prohibits the disposal by the allottee of his trading rights to any person other than a Native approved of by the Council and ⁱⁿ addition in that section of the 1957 regulations there is a similar prohibition in respect of the transfer of a tradingsitepermit.

Mr. Kaplan’s contention that the option referred to in clause 6 of the agreement (Exhibit ^“B”) fell within the ambit of the prohibition contained in section 22 of the 1952 regulations as

it constituted a diminution of the Defendant’s rights appears to

me

to be unsound for, even if, as

may

well be the case, the Plaintiffs intention was to acquire the shop for trading purposes and the Defendant was aware thereof, this in itself did not, as submitted by counsel for Respondent, constitute a disposal by the Defendant of his trading rights as in the absence of any stipulation in the agreement (Exhibit ^“

B

”) to theeffect that the purchase of the shop and dwelling house by the Plaintiffwhich was all that was agreed upon therein,wasto include the acquisi- tion by him ofthe trading rightsand thatsuch rightswereto be transferred to him by the Defendant in pursuance of the sale, the Defendant was not obliged to pass such rights to the Plain- tiff or even to assist him in any

way

in obtaining them on his exercising the option.

On

thecontraryitwas open totheDefend- ant to have his trading site permit cancelled and so also his trading rightsin terms of section 24 of the 1957regulations and to transfer the shop and dwelling house to the Plaintiff without the Council’s consent in the

manner

provided by section 26 of those regulationsleavingittothe Plaintiff toapplyto theCouncil for the trading rights

anew

if he so desired. It is true that the Superintendent’s consentto the disposal ofthe shop anddwelling

is then required butthis aspectwasnotraised in thegrounds of appeal so that the appeal cannot succeed thereon. This disposes not only of Mr. Kaplan’s contention in regard to ground of appeal 1 (a) but also ofhis argumentin respect ofthe remaining grounds based, asitwas, on the transferof the tradingrightsand the tradingsite permit without the necessary approval, neither of which is, for the reason given above, involved. It is as well to add that there is this further consideration for holding that the firstground of appeal iswithout substance, viz.,that, even ifthe option had included the trading rights, it would still not fall within the purview of section 22 of the 1952 regulations as it

amounted to no

more

than a contemplated sale of such rights

49

at a future date which

may

or

may

not eventuate whereas, as is

manifest from the language of the section, itenvisages an actual and not a contemplated disposal of the trading rights.

In the circumstances the appeal fails and it is unnecessary to consider the submission by counsel for Respondent that it

would not be proper for this Court to allow the points of law taken on appeal to prevail, firstly, as the allegations of fact on which they were based were

now

being raised for the first time and had not been canvassed ⁱⁿ the Native Commissioner’sCourt and, secondly, because the alleged illegalities did not flow from the agreement itself and in any event there was no clear proof of any illegality; nor in the circumstances is it necessary to consider Mr. Kaplan’s counter-submission that the case should be remitted to the Native Commissioner’s Court for further evidence to determine whether or not the Council’s consent had been obtained.

Mr. Kaplan on the authority of Nlliaka versus

Nthaka

1959 N.A.C.79 (C) invited thisCourt to raise

mero motu

the question ofthe joiner oftheCouncil and theSuperintendent in theinstant action and to hold in the light of that judgment thatthe Native Commissioner’s Court had no jurisdiction to try it.

A

^similar

coursewas pursued in

Ndonga and Lumko

versus

Mapoma

1960 N.A.C. 71 (S).

But to

my

mind the interestsofjusticein the instantcasewould best be served by adopting the suggestion

made

by counsel for Respondent that the judgment of the Native Commissioner’s Courtbealtered byeliminatingtherefrom theorderontheDefen- danttopasstransfer oftheshop anddwelling housetothePlain- tiff and by only requiring the Defendant to sign such documents as

may

be necessary toenable the Plaintiff to apply through the Municipal Native Administration Department at

Duncan

Village for the transfer to

him

of the rights to the shop and dwelling which was all that he desired. That such a course would best serve the interests of justice is apparent from the fact that the judgment of the Native Commissioner’s Court was not only not attacked on appeal on the merits but that ex facie the record appearstodojustice betweenthe partiesandcounsel’s suggestion wouldgive effect thereto as far as possiblewithoutresulting inany prejudice to the Defendant whilst at the same time serving to remove theground forthe interventionby thisCourt

mero motu

suggested by Mr. Kaplan in that it would eliminate any ^“direct and substantial interest” by the Council or the Superintendentin the order of the Native Commissioner’s Court. Accordingly it is proper for this Court to cure the irregularity in the Native Commissioner’s judgment in this

manner

in keeping with the principle underlying the proviso to section fifteen ofthe Native Administration Act, 1927. Itdoes notappearto

me

to beproper for thisCourtto giveeffect to counsel’ssuggestionthatit should be stipulated in the judgment that the Plaintiff

may

in addition to applying for transfer of the rights to the shop and dwelling house to himself alternatively apply for the transfer thereof to his nominee as this aspect, although covered byclause 8 of the agreement (Exhibit “

B

”),isnotembodiedin thePlaintiff’s claim.

It seems to me, however, that to facilitate enforcement of the judgment provisions should be

made

therein for the Messenger of the Court atEast

London

to sign the necessary documentsif

the Defendantfailsto do so within a fixed period.

In the result the appeal should be dismissed, with costs, but the judgment of the Native Commissioner’s Court on the claim in convention should be altered by substituting for the words

“ForPlaintiff as prayed i.e. Defendant to pass transfer to Plain- tiff of the said property and to sign all such documents as

may