Swaziland Building Society v Xaba (45/10) [2011] SZSC 27 (31 May 2011);

 

IN THE SUPREME COURT OF SWAZILAND

 

 

HELD AT MBABANE                                                CIVIL APPEAL CASE

NO. 45/2010

 

 

In the matter between:

 

 

SwazilandBuildingSociety                           Appellant

 

 

AND

 

 

Sibongiseni Fundzile Xaba                             Respondent

 

 

 

Coram                                                      M. M. Ramodibedi CJ

                                                                S. A. Moore JA

                                                                I. G. Farlam JA

                                                                       

 

For the Appellant                                     Mr. S.V. Mdladla     

 

 

 

 

 

 

 

SUMMARY

 

 

Kitchen Fittings – whether integrated into building or detachable – whether property of landlord or property of tenant – fittings not merged into the house and forming part of it – Tenant’s removal of fittings at end of tenancy Not unlawful – Costs awarded to Respondent at attorney-and-client scale because conduct of applicant /Appellant reprehensible, wrongful, and unjust.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

__________________________________________________________________

JUDGMENT

__________________________________________________________________

 

 

MOOREJ.A

 

OPENING

 

[1]    This is a disturbing case.  It moved M.C.B Maphalala J to write at paragraph [30] – [32] of his judgment

 

“[30] Another disturbing issue in this case relates to the conduct of the Applicant which is reprehensible; wrongful and unjust.  Applicant gave a loan of E300, 000.00 (Three Hundred Thousand Emalangeni) to the Respondent in 2004 to purchase the house from one Magalela Ngwenya.  She effected major renovations to the house since the house had cracked walls, floor tiles needed repairs as well.  In 2008 she fell into arrears with her bond and the Applicant took default judgment against her; she learned of that judgment in November 2008.  In order to save her house from execution, she paid in full the arrears as well as legal costs.  Despite this, on the 17^th April 2009, Applicant sold to itself the house in execution.  Applicant was the only bidder; and despite the amount already paid by Respondent, the Applicant bought the house for E1, 000.00 (One Thousand Emalangeni).

 

[31]      Such conduct on the part of the Applicant and its Attorneys is reprehensible.  It is high time that Parliament comes to the rescue of “bond holders” and regulate the business of Financial Institutions with regard to “Home Loans”; otherwise, owning property on Title Deed land will remain merely a distant and unattainable dream to the majority of the people of this country.

 

[32]      In the circumstances, the application is dismissed with costs at an Attorney/Client Scale.”

 

[2]    On the 30 June 2010 the Appellant, hereinafter the Building Society brought an application against the Respondent, bolstered by a certificate of urgency under the hand of Sidumo V Mdladla an Attorney practising as such under the law firm S.V. Mdladla and Associates at Lot No. 306 Lomadvokola Chambers, Cnr. Lomadvokola & Nukwase Streets, Mbabane.  It was this Attorney’s opinion that:

 

“the matter is urgent by reason of the fact that the

Lessee has unlawfully taken all kitchen household

fittings from the Applicant’s property which is now selling

and by virtue of the fact, the property cannot be sold

immediately as there is a prospective buyer awaiting to

purchase the property.”

 

[3]    The fullness of the reliefs claimed in the Notice of application are in the following terms:

 

“1.       that dispensing with the usual forms and procedures relating to the institution of those fillings (sic) and allowing the matter to be heard and enrolled as one of urgency.

1. Condoning Applicant’s non-compliance with the rules.
2. The return, restoration and refitting and/or replacement of all the kitchen household fittings unlawfully removed by the Lessee on the leased property immediately as there is a prospective buyer awaiting to purchase the property/failing which an Order for compensation of the fittings and/or all the necessary expenses incurred by the Applicant in lieu of repairs, costs of fittings, hiring of personnel to install fittings and any auxiliary costs.

           

1. That the Deputy Sheriff to be appointed by the Registrar is hereby directed and required to;

 

1. Forthwith serve this Notice of Motion and this order upon the Respondent and to explain the full nature and exigency thereof to her.
2. Do all that is necessary to prevent the Respondent from not restoring and/or compensating the Applicant in terms of paragraph 3 hereof.
3. To make a return to the Applicant’s attorneys and the Registrar of what he has done in the execution of this Order.
4. That prayers 1,2,3,4 and 5 of the application operates as an interim order forthwith.
5. That a Rule Nisi returnable on a date to be determined by the above Honourable Court calling upon the Respondent to show cause why prayers 1,2,3,4,5 and 6 should not be made final.

 

1. The Applicant’s claim based in the allegation in the affidavit is for;

 

1. The return, restoration and re-fitting and/or replacement of all kitchen household fittings on the leased property unlawfully removed by the Respondent necessary to render the property sellable to the awaiting prospective buyer.
2. Failing which compensation for the loss or damage to the property to be determined by the Applicant.
3. Costs of suits (sic) at an attorney and own client scale.
4. Further and/or alternative relief.”

 

[4]    The Founding Affidavit was sworn to by no less a personage than a certain Joseph V. Ndlangamandla the Managing Director of the Building Society.  This gentleman swore positively that the Respondent adult Swazi female’s place of business is Gifties shop which suggests that the lady runs a business.  The affidavit refers to a lease agreement of 1^st July 2009 or thereabouts a copy of which was annexed.  At paragraph 8.3 it enjoined the Tenant against driving any object into the walls or ceilings or floor or woodwork or any part of the leased premises other than to fit mirrors and/or picture frames and like items.  Paragraph 8.4 prohibits the tenant from doing anything which may damage the walls or ceilings or floor or any part of the leased premises.

 

[5]    The affidavit swore further that after the lease agreement expired, the Building Society had entered into a Deed of Sale in relation to the property which was to be perfected on the month of June 2010.  No Deed of Sale has been annexed to the affidavit.  The Managing Director relies solely upon his IPSE DIXIT in this regard.  He evidently treasures the agreed sale price as a closely guarded secret of the Building Society.  The anxious prospective purchaser has not sworn a confirmatory affidavit.  Moreover the Founding Affidavit does not allege any damage to the fabric of the house which would have evidenced the removal of items which had been attached thereto thus forming an integral part of the building.  Equally, there is no list or inventory of the items allegedly removed.

 

[6]    Unsurprisingly, in her Answering Affidavit, the Respondent avers that “The Applicant has not clearly specified what ‘kitchen household fittings’ are being claimed.”  The critical averments in the Respondent’s affidavit to which there has been no effective answer are that she hired a carpenter who designed and built cupboards which were constructed separately and independently as units and were then fitted into the kitchen.  They were clearly free standing and detachable from the kitchen walls and were not permanently affixed to the walls.  They could be shifted from one position in the kitchen to the other to allow for cleaning and restyling of the kitchen.  In removing the cupboards, there was no damage either to the house or to the cupboards themselves.  The Respondent’s affidavit evidence was enhanced by photographs which were annexed to her affidavit.

 

[7]    The Replying Affidavit of the Building Society reflects the  Managing Director’s attempts to deal with legal issues rather than confining itself to matters of evidence.  It proceeds upon the erroneous premises that because the cupboards were among the items in the house at the time of the lease, and because the Respondent readily admits that she removed them, the Building Society has an unanswerable case.  It ignores the fact that the Respondent has established by unanswered averments, supported by bills and receipts (a) that the cupboards were her own property and (b) that they were, like any other moveable item of household furniture not attached to the building in such a way as to become an integrated and integral part of it.

 

        THE APPEAL

 

[8]    The grounds of appeal fall into two groups which raise two issues for consideration.  The first is whether the kitchen cupboards or kitchen fittings which had been admittedly built by the Respondent at her own expense, and placed in the house by her, had become part of the house through the process of inaedificatio to the extent that, upon the sale of the house to the Appellant, those items had become the property of the Appellant rendering their removal by the Respondent unlawful.  On this issue the Appellant complained that:

 

“1. The Honourable Court a quo erred in law when it held that the kitchen fittings were not part of the house as they were detachable;

1. The Honourable Court a quo erred by equating these kitchen fittings to curtains, refrigerators and tables;
2. The Honourable Court a quo should have held that the fittings had been fitted with the intention to have them permanently affixed as the Respondent had bought the property;
3. The Honourable Court a quo erred by not holding that the circumstances of this case dictated that the Respondent intended that the fittings be part of the kitchen permanently.”

 

[9]    Counsel for the Respondent’s submission on this issue is clear cogent and compelling.  Any attempt at paraphrasing it runs the risk of impairing its vitality.  I therefore set it out in full and adopt it as a correct statement of the law and as an accurate assessment of the facts.  It reads:

 

7.1 Accession of Movables to Immovables

7.1.1        The question whether an article, originally movable, has become immovable through annexation by human agency to realty depends on the facts of each case; but the elements to be considered are the nature of the particular article, the degree and manner of its annexation, and the intention of the person annexing it.

 

        See Olivier v Haarhof T.S 1906 p 497.

MacDonald Ltd v Radin NO & The Potchefstroom Dairies & Industries Co. Ltd 1915 AD 454

 

Newcastle Collieries Co. Ltd v Borough of Newcastle 1916 AD 561

• The three standards applied by the Courts to determine whether a movable thing is attached to an immovable thing by means of annexation such that that it subsequently becomes part of the immovable thing, with the result that the right of ownership thereof thereafter rests in the owner of the immovable thing, were carefully summarized by Van Winsen AJA as follows in Standard-Vacuum Refining Co. v Durban City Council 1961 (2) SA 669 (A) 667-678.

 

“In order to ascertain whether such is the intention regard must be had to the following physical features viz. the nature of the movable, the method and degree of its attachment to the land or other immovable and whether it can be readily removed without injury to itself or to the land or immovable to which it is attached.  If the nature of the movable is securely attached thereto that separation must of necessity involve substantial injury, either to the movable or to the land or immovable to which it is attached with the intention of permanency and for that reason it must be held to have become and be immovable.  If, however, an examination of the physical features produces an equivocal result in the sense that from an examination of such features, no inference can be drawn that the attachment was made with an intention of permanency or otherwise, the intention of the annexor must be decisive.”

 

• The following facts, which are not in dispute, regarding the nature of the fittings and their degree of annexation to the house appear in the Answering Affidavit:-

 

• The design of the said cupboards was such that they were constructed separately and independently as units and were then fitted into the kitchen;

 

• The said cupboards were detachable from the kitchen walls and were not permanently affixed to the walls.  They could be shifted from one position in the kitchen to another to allow for cleaning manoeuvring and restyling of the kitchen.

 

• These factual allegations are not disputed by the Applicant in reply nor has the Applicant in its Founding Affidavit said anything about the nature of the cupboards and the degree of their annexation to the house.  It follows therefore that the version of the Respondent is the correct one; as such it can be concluded, and the Court must find, that the cupboards were not of such a nature that they could be permanently annexed to the house and that they were not literally annexed to the walls of the house hence they did not become part of the house.”

 

[10] M.C.B. Maphalala J reviewed a number of relevant authorities: 

       

The Acquisition and Protection of Ownership by Carey Miller, Juta & Co. Ltd 1986; Oliver and others v Haarhof & Co. 1906 TS 497 at 500; MacDonald Ltd v Radin N.O & The Potchefstroom Dairies & Industries Co. Ltd 1915 AD 454; Secretary for Inland Revenue v Charkay Properties (Pty) Ltd 1976 (4) SA 872 (A); Standard Vacuum Refining Co. v Durban City Council 1961 (2) SA 669 (A); Newcastle Collieries Co. Ltd v Borough of Newcastle 1916 AD 561.

 

[11]   I will however refer to only one of them as illustrative of the legal principles involved here.  In Secretary For Inland Revenue v Charkay Properties (Pty) Ltd 1976 (4) SA 872 (A) at pages 881 – 882 Trollop JA stated:

 

“…before an article attached to a building of a permanent nature can be said to form part of it…  it must have been structurally integrated or otherwise physically incorporated into the building permanently in such a way that it has lost its own separate identity and character; the question whether or not that has occurred is one of fact.

 

The nature of respondent’s demountable partitions… were only lightly albeit rigidly, attached to the floors and ceilings; they could easily and inexpensively be detached and removed without causing any injury to themselves or the floors or ceilings;  …their normal use and function was not for them to remain unmoved but to be shifted around; hence, their mounting and attachment in a particular position could not be regarded…  as being permanent… while in position, they did not lose their identity or character as movable inner walls.  Consequently, I do not think that they were structurally integrated or otherwise physically incorporated into the building permanently in such a way that they lost their own separate identity and character, or … that they were built into the fabric of respondent’s building.

 

There are many articles of furniture or equipment which are identical…  with their built-in counterparts such as curtaining, blinds, desks, counters, safes, refrigerators, bookcases, cupboards…  but which according to the above test, are not part of the building in which they are positioned.”

 

 [12]The articles listed in the last paragraph do not exhaust the examples of removable items. I would add detachable or free-standing wardrobes and, in the context of this case, detachable or free-standing kitchen cupboards.

 

[13]  M.C.B. Maphalala J concluded at paragraph [27] of his judgment that:

 

“[27]    In view of the above authorities and the facts of the case before me, I am unable to agree that the Fittings were structurally integrated and physically incorporated into the building permanently in such a way that it lost its own separate identity and character.  The Fittings were not permanently affixed to the walls but easily detachable; they could be moved from one position to the other without injury to itself or to the house.  It would therefore be absurd to hold that the Fittings which constitute furniture such as curtains, refrigerators and tables have become part of the house.  These Fittings are different from geysers, ceilings, doors, windows, roof tiles, electric installations and plumbing pipes which are structurally integrated and physically incorporated into the house for the very completion of the house; the house is not complete without the installation of these items.

 

 

[28]      In the circumstances, it cannot be true that the Fittings are part of the house or that the Respondent lost ownership therein when the Applicant foreclosed the bond and purchased the house.  In the circumstances clause 8.7 of the lease is incompetent in the present case because the Applicant has not proved on a balance of probabilities that the Fittings have become part of the house through “Inaedificatio”, or that it is the owner of the Fittings.  Similarly, the “Actio Rei Vindicatio” is inappropriate for the same reason.

 

[29]      When the Parties concluded the Lease, the Fittings were not part of the Lease; they belonged to the Respondent.  She had a legal right to remove the Fittings on termination of the Lease.”

                       

 

[14]  I am in full agreement with the above segment of the judgment

        of the Court a quo and endorse it.

 

COSTS

 

[15]  The grounds of appeal on the vexed above subject are that:

 

1. “The Honourable Court a quo erred by awarding punitive costs against the Appellant when there were no special circumstances to prevailing (sic) warranting for the award of costs at a punitive scale.

 

1. The Honourable Court a quo erred by awarding costs at a punitive scale outside the ambit of the reasons recognised by Courts for awarding costs at a punitive scale.”

 

[16]  Counsel for the Appellant complained that “The Court does not state the basis for making such an order for costs.  He cited Mallinson v Tanner 1947 (4) SA 681 (T) in support of the proposition that Attorney and client costs are awarded on rare occasions which would include instances where the litigant has acted immorally.  He urged that the Appellant in the instant case was not a vexations litigant and that the application itself was not vexatious or an abuse of the process of the Court.  The Building Society had simply sought to enforce the provisions of a valid lease agreement which the Respondent had breached. See Hayes v Baldachin and Others 1980 (2) SA 589 (R).  He submitted that in Van Wyk v Millington 1948 (1) SA 1205 (CPD) at page 1215, the Court held that where an Appellant had not acted fraudulently and recklessly a punitive costs order could not be made against it.  The Appellant had not acted recklessly and fraudulently in this case.  He contended that the proper order of the Court a quo was for costs at the ordinary scale and that the parties should pay their own costs of the appeal.

 

[17]  Counsel for the Respondent drew attention to the 4^th Edition of Herbstein & Van Winsen, “The Civil Practice of The Supreme Court of South Africa” at page 717 and to the South African case of Nel v Waterberg Landbouwers Ko-operatiewe Vereniging 1946 AD 597.  He then argued that:

 

“8.2     The Court a quo, in awarding costs to the Respondent on the Attorney and own client scale, based its decision on the conduct of the Appellant and its Attorneys prior to the institution of the proceedings.  The Court found that such conduct of the Appellant and its Attorneys was reprehensible, wrongful and unjust hence awarded an order for costs against Appellant on the higher scale.

 

• Before a Court of appeal will interfere with an order as to costs it must be satisfied that there has not been a judicial exercise of the lower Court’s discretion in the award of costs.  The Court of Appeal will interfere where, inter alia, the exercise of the discretion has not been proper.  In this case the discretion of the Court a quo was properly exercised.”

 

[18]  It is not true to say as the Appellant does in its grounds of appeal, that there were no special circumstances prevailing which warranted the award of costs at a punitive scale.  The Judge a quo rightly condemned the conduct of the Appellant in the strongest terms.  He employed the epithets disturbing, reprehensible, wrongful and unjust.  On the uncontroverted material before him he was eminently entitled to do so.

 

[19]  In dealing with this appeal against the order for costs, the starting point is that costs were awarded to the successful Respondent to indemnify her for the expense to which she has been put through having been unjustly compelled to defend against a wholly unmeritorious application.  The award of costs on an Attorney-and-client basis allows the Respondent to recover from the Building Society all the costs that on taxation are due by her to her attorney.  Courts are understandably slow to make an award of costs on the Attorney-and-client scale:  but a judge should not flinch from doing so in an appropriate case.

 

[20]  It is a basic rule that the award of costs falls wholly within the judicial and judicious discretion of the Trial Judge governed by the general principles, which underlie the exercise of all judicial discretions, which must be exercised on grounds upon which a reasonable person could have come to the conclusion arrived at.  If the award of costs is based upon the proper exercise of the trial Court’s discretion, this Court will not interfere even if it might have itself made a different order, and a  fortiori where it would itself have made the same order as the Trial Judge did.

 

[21]  It is one of the guiding principles that, in an appropriate case, the Court can, in special cases, make an order that the unsuccessful party must pay the costs of the successful party upon an Attorney-and-client basis.  The most recent judgment of this Court which stated the law of the Kingdom of Swaziland on this subject is in the case of Stanlib Swaziland (Pty) Ltd and Others v Abel Sibandze Civil Appeal No. 65/2009 [2010] SZSC 20 published on line by Swazilii at Swazilii.org/case law/2010-SZSC-20 where, with the concurrence of Ramodibedi C.J. and Twum J.A,  I recorded the principle at paragraph [34] that:

                       

“1.       In awarding costs the Court has a discretion to be exercised judicially upon a consideration of all the facts; and, as between the parties, in essence it is a matter of fairness to both sides.  See Gelb v Hawkins, 1960 (3) SA 687 (A) at p. 694A; and Graham v Odendaal, 1972 (2) SA 611 (AD) at p. 616.  Ethical considerations may also enter into the exercise of the discretion; see Mahomed v Nagdee, 1952 (1) SA 410 (AD) at p. 420 in fin.

 

1. The same basic principles apply to costs on the attorney and client scale.  For example, vexatious, unscrupulous, dilatory or mendacious conduct (this list is not exhaustive) on the part of an unsuccessful litigant may render it unfair for his harassed opponent to be out of pocket in the matter of his own attorney and client costs;  seeNel v Waterberg Landbouwers Kooperatiewe Vereniging, 1964 AD 597 at p. 607, second paragraph.  Moreover, in such cases the Court’s hand is not shortened in the visitation of its displeasure; see Jewish Colonial Trust, Ltd v Estate Nathan, 1940 AD at p. 184, lines 1 – 3.

 

1. In appeals against costs the question is whether there was an improper exercise of judicial discretion, i.e. whether the award is vitiated by irregularity or misdirection or is disquietingly inappropriate.  The Court will not interfere merely because it might have taken a different view.”

 

“A number of grounds have been listed in the 5^th Edition of Herbstein & Van Winsen The Civil Practice of the High Courts of South Africa, which is currently edited by Cilliers, Loots and Nel, at pages 971 – 972 upon which the Court may order a party to pay an opponent’s attorney-and-client’s costs.  Though full, the list in Rautenbach v Symington 1995 (4) SA 583 at 588 A – B is not exhaustive.  Ishall therefore extract and apply only those grounds which have a bearing upon the instant appeal.”

 

[22]  The grounds in this case are that the Trial Court found justifiably that the Appellant was guilty of grave misconduct in the transaction under inquiry, that its conduct was highly reprehensible, wrongful and unjust.  Upon the material before him, M.C.B. Maphalala J was fully justified in ordering costs at an Attorney/Client Scale.  There is therefore no warrant for this Court to interfere with what was a proper and judicious exercise of the Judge’s discretion.

 

 

 

        CONCLUSION

 

[23]  This case is an example of the unfair advantage which a heartless lender can take over a borrower of limited means.  The Judge has rightly commented about the unconscionable conduct of the Building Society by which it has made a gross  windfall profit of E299,000,00 - or more if the cost of the refurbishment done by the Respondent is taken into account – at the expense of a borrower suffering from an inequality of arms and financial muscle.  The Respondent has lost her home and has been unjustly visited with the costs and stress of litigation right up to the level of this Court.  It is easy therefore to understand the Judge’s sentiment that cases such as the one before us are deserving of the attention of Parliament.  If there are any regulatory bodies in Swaziland with jurisdiction in cases such as this, then this case should be brought urgently to their attention.

 

        ORDER

 

[24   It is the order of this Court:

 

1. that the appeal be dismissed  with costs;
2. that the judgment and order of the Court a quo be affirmed.

                                      

                                                                                    ______________________________

S. A. Moore

                                                                Justice of Appeal

 

 

 

________________________

I agree                                              M. M. Ramodibedi

Chief Justice

 

 

                                                        ________________________

I agree                                              I. G. Farlam

                                                        Justice of Appeal

       

 

Delivered in open court on this 31^st day of May 2011.