9

PART 2

II) REAL RIGHTS

I. Introduction

Different subjective rights

personal rights
real rights
immaterial property rights
personality rights

Absolute rights

Real rights
Immaterial, property rights
Personality rights

Relative rights

Personal rights
 10

Contract of Sale

1. Obligation creating agreement

personal rights & obl.

ius ad rem - right to

claim the thing (car)

2. Real agreement

real right

ius in re - right in
the thing (car)

Important distinctions between real rights and personal rights

 they are acquired, exercised and protected in different ways
 different consequences flow from real and personal rights
 practical issue: only real rights can be registered

II) Distinction between Real Rights (RR) & Personal Rights

(PR)
 11

1. Theoretical distinction – see Professor Scholtens, “Bartolus

and his Doctrine of Subjective Rights”, 1958 Acta Iuridica, 163.

2. Case Law Approach

1. Theoretical distinction between Real and Personal Rights

(a) Personalist theory

 emphasis on operation of rights - against which persons

can it be enforced?
 RR = absolute, can be enforced against all persons
 PR = relative, can only be enforced against a particular
person

o Criticism:
 RR not only absolute rights
 RR sometimes limited
 PR must also be respected by other persons – see
Jansen v Pienaar 1881 (1) SC 276

(b) Classical theory

 emphasis on nature of object of right

 RR = object is thing (corporeal)
 PR = object is performance by particular person

o Criticism:
 RR - dual relationship
 RR - object sometimes incorporeal
 Powers granted by certain limited real rights
similar to those of PR
(c) Distinction on basis of characteristics of RR and PR

 Van der Merwe and De Waal, 37-38.

 Van der Merwe, 63–64.

2. Categories of and classification of Real Rights.

 12

* no numerus clausus of real rights;

* iura in re propria and iura in re aliena.

 iura in re propria – ownership

 iura in re aliena - limited RR, eg: servitudes (for example,
usufruct, right of way); mortgage; pledge

IURA IN RE PROPRIA - OWNERSHIP

OWNER HAS POWER TO:

To possess
nnnnnnn
hhhhhh
To use

To take the fruits =

natural and / or civil
nn
To consume

To alienate

To destroy

------------------------------------

IURA IN RE ALIENA = LIMITED REAL RIGHTS

For example:

Servitudes, e.g., usufruct, right of way; right to

draw water

Real securities: mortgage and pledge

The limited real right confers on the holder a right in the property
owned by another in the sense that it:

(i) confers on the holder certain of the powers

inherent in that person’s right of ownership; and/or
 13

(ii) prevents the owner from fully exercising his/her right

of ownership.

The result is that the owner’s right of ownership has been

diminished - dominium minus plenum. In other words, there
has been a subtraction from dominium.

Owner has the power to:

To possess
To use and enjoy
To pluck fruits
To consume
To alienate

Usufructuary has the power to:

wwTo possess
To use and enjoy
To pluck fruits

Examples of limited real rights:

(i) Servitudes: pradial, personal
(ii) Real securities: mortgage, pledge
(iii) Rights in respect of certain leases
(iv) Rights connected to minerals

b) Important question:
 when is a right a real right and therefore registrable?
 no numerus clausus of real rights  sec 3(1)(r) & 102 of
Deeds Registries Act 47 of 1937
 new real rights can therefore be created
 problem areas: conditions in wills, contracts of deeds,
contracts of servitudes

c) Statute:

The Deeds Registries Act 47 of 1937 provide inter alia:

 Sec 3(1)(r):
 14

“[The registrar shall, subject to the provisions of this

Act] register any real right, not specifically referred
to in this sub-section…”

 Sec 63(1) of the Deeds Registries Act 47 of 1937:

“No deed or condition in a deed, purporting to create

or embodying any personal right, and no condition
which does not restrict the exercise of any right of
ownership in respect of immovable property, shall be
capable of registration: Provided that a deed
containing such a condition as aforesaid may be
registered if, in the opinion of the Registrar, such
condition is complimentary or otherwise ancillary to
a registerable condition or right contained or
conferred in such a deed.”

 A personal right will not be registered except

where it is closely connected to a registrable real
right
 Only rights which limit another’s right of
ownership will be registered.

 Sec 63(2) of the Deeds Registries Act 47 of 1937 provides

that any personal rights contained in a mortgage bond or
lease agreement or similar contract may be registered.

 Sec 102 defines a real right as any right which becomes

real on registration.

3. Case law approach to the distinction between Real and

Personal Rights:

 Intention to bind subsequent owners:

 The intention of the person who creates the right (testator

or contracting party) must be to bind not only the present
owner of the land, but also his/her successors in title

 If the intention is only to bind the present landowner in

 15

his/her personal capacity, the right will not be a real

right.

 In other words, the intention must be to bind the owner

in his/her capacity as landowner and not in his/her
personal capacity

 Subtraction from the dominium test:

 Also referred to as
- “diminution of ownership”
- “a burden on the land”
- “a charge on the land”

 The nature of the right or condition must be such that

registration of it results in a “subtraction from
dominium”.

 This criterion is based on the notion that a limited RR

diminishes the owner’s right of ownership over his/her
land in the sense that it either:

(i) confers on the holder (of the limited RR) certain of

the powers inherent in the right of ownership;
and / or
(ii) prevents the owner from exercising his right of
ownership to its full capacity

 Rights established in respect of land which restricts the

landowner’s power, inter alia, to use, enjoy and dispose of
the land are therefore considered real and registrable

 Problems with SFD test:

a) it’s not possible to identify the most important

RR, ownership, with this test - the test can be applied
to identify only a limited RR and then only if ownership
has already been identified
b) the test applies only with regard to limited
RRs in land
c) some PRs can also restrict ownership
 16

 SFD test qualified by correlative obligation test:

 the correlative obligation must bind not only the
present owner but also successors in title
 Ex Parte Geldenhuys, p 164

EX PARTE GELDENHUYS 1926 OPD 155

Facts:
- joint will
- usufruct  surviving spouse
- 5 children  co-owners of land
- conditions:
(a) time of division:
(b)manner of division:
(c) monetary obligation:

Legal question:
- Can the 3 conditions be registered, i.o.w. do they create real
rights?

Test:
(1) intention
(2) Subtraction from Dominium Test + Correlative
Obligation Test

Decision:

- (a) & (b) = RR  registrable

Reasoning of court:

 limits right of co-owners to demand partition of their land

at (a) any time (b) by agreement
 is therefore a subtraction from their dominium
 the conditions (correlative obligation) are ingrained in the
right of ownership of each undivided share, iow the right
of ownership cannot be transferred without the conditions
 therefore the correlative obligation binds not only the
present owner but also his/her successors in title
 thus the conditions give rise to real burden (limited RRs)
& are registrable
 17

- (c) = PR to money and is therefore a burden which rests upon

a specific child in his personal capacity

 thus not ordinarily registrable but court ordered its

registration
 because it was so closely connected to the other two
registrable real rights, (a) & (b), and adhered to the
intention of the testator

 Subtraction from dominium test taken up in Sec 63 of Deeds

Registries Act 47/37:
“... no condition which does not restrict the exercise of any
right of ownership, shall be capable of registration”

 thus only rights which limits an owner’s RR in respect of

his dominium are registrable

 Proviso to Sec 63 (1973)

“[if] such condition is complementary or otherwise ancillary

to a registrable condition or right ... [then] it may be
registered”

Q: Does a personal right which is registered because it is

intimately connected with a registrable RR become a RR?
A: Nel v Commissioner for Inland Revenue 1960(1) SA 227(A) at
235A:

Q: If a PR is mistakenly registered?
A: Odendaalsrus 608C; Lorentz 1049 H – 1050:

REGISTRAR OF DEEDS V FERREIRA DEEP LTD 1930 AD 169

Facts:
- respondent sold and transferred his farm reserving for himself
the owner’s share in the revenue which the state receives for
the issue of licenses to third parties authorizing them to dig for
precious metals on such land
 18

- the Registrar of Deeds refused to register such reservation

Legal question:

Decision:
- the court confirmed Hollins v Registrar of Deeds 1904 T.S. -
that this reservation created an iura in personam and was thus
not registrable

- the court however decided to overrule the Registrar and order

the registration of this reservation in the light of the practice
deeds registries in the Transvaal since 1903 to register such a
reservation

- Obiter - special kind of PR  iura in personam ad rem

acquirendam - i.e. a PR to demand transfer of a RR - on
registration the PR becomes a RR.

* Criticism: the PR does not become a RR on registration

Rather the PR comes to an end and new RR comes into
existence.

ODENDAALSRUS GOLD GEN. INV. V REGISTRAR OF DEEDS

1953 1 SA 600 (O)

Facts:
- similar to Ferreira Deep

Legal question:

Decision:
- the court applied the SFD-test and overruled the refusal of the
Registrar to register the reservation

- page 609 - dual test:

 Q: is the right to demand license monies a right in
property of another (Subtraction From Dominium Test)?
(p. 610)
A: yes - since the landowner was entitled to reserve such
a right by virtue of the Gold Law, subsequent owners of
 19

the land would lack such a right - compares right to

usufruct, i.e. right to fruits of the property

 Q: if registered will it bind successors in title

(Correlative Obligation Test)? (p. 611)
A: yes

* Criticism: (a) the State is bound, not the

landowner
(b)right to fruit is not always a RR

 See Lorentz v Melle for criticism of fruits argument

LORENTZ V MELLE 1978 (3) SA 1044 (T)

Facts:
- in terms of an agreement of partition, land which belonged in
co-ownership to two co-owners was partitioned on condition
that they would be mutually obliged to share the profits if a
township were developed on any of the two subdivided portions
 right to ½ profit of development  right to money

- this condition was registered against the title deeds of the

subdivisions

- applicant approached court for declaratory order that condition

created a personal obligation and did not bind subsequent
owners

- the respondent alleged:

(i) condition is a praedial servitude  RR 
registrable; OR
(ii) even if a PR then still binding on successors in
title

Legal question:

Decision:
- Held re (i)
 that right to the income of land traditionally formed part
of the personal servitude of usufruct
 20

 the court decided, however, that the right in question was

a personal right aimed at a monetary performance, since
the obligation to pay attaches not to the land but merely
to the owner thereof
 the rights of the owner is limited but not in relation to the
enjoyment of the land in a physical sense (1052E)

- Held re (ii)
 mere registration of a PR does not make it a RR & binding
on successors in title

KAIN V KHAN 1986 4 (SA) 251 (C)

Facts:

- seller(applicant) of immovable property reserved for herself in a

deed of sale the right to occupy a room in the building (she
sold) at nominal rental until her death or until she vacates the
premises
- after transfer of ownership she occupied the room at the rental
agreed upon
- much later she applied for the reservation to be registered
against the Title Deeds in the Deeds Registry
- Registrar refused because applicant only had a PR against
owner of property which was not registrable

Legal question:

Decision:

- reservation is registrable because the applicant’s iura in

personam ad rem acquirendam (i.e. right to be allowed to
occupy room) became real when she actually occupied the
premises
- right of lessee to occupy the premises is a iura in personam ad
rem acquirendam (PR) which became real (iura in re) when
occupation is given and taken
- Sec 63(1) complied with  respondent’s exercise of ownership
of immov. prop., which included the right to use & occupy
property, was restricted - in spite of fact that it affected only a
certain area
 21

- applicant had acquired a limited RR

PEARLY BEACH TRUST V REGISTRAR OF DEEDS 1990 4 (SA)

614 (C)

Facts:
- PBT applied that following condition be registered against the
title deed of property:
 right to ¹/3 of money received for an option to prospect for
minerals, and
 right to ¹/3 of money received for expropriation
- Registrar refused to register the condition

Legal question:

Decision:
- one of rights of ownership is ius disponendi - right of alienation
- this right will be limited if owner is prevented from receiving
the full fruits of alienation
- therefore the right of ownership is restricted
- also intention of parties that correlative obligation is binding on
successors in title

Criticism:
- even if parties intended condition to be binding on successors
in title - that in itself does not make the right a RR
- the right in casu is not a right to the property itself (not a RR)
but the right to receive money from the owner - a PR

- see V/d Walt 1992 THRHR 170 203 - reasons for recognition of
monetary obligation as RR

CAPE EXPLOSIVE WORKS LTD V DENEL (PTY) LTD 2001 (3)

SA 569 (SCA)

Facts:
- Appellant sold and transferred two pieces of land to Second
Respondent, Armscor, subject to the following restrictions:
(i) use restriction: manufacture of armaments
(ii) duty to notify appellant if no longer required for that
 22

purpose; appellant would have “first right to repurchase”

- In subsequent transactions by Armscor, condition (ii) was
omitted from title deeds whilst condition (i) applied only to a
small portion of the original land.
- First Respondent, Denel, Armscor’s successor in title in respect
of a portion of the land in question applied to the TPD for an
order that the property is free of condition (ii).
- Appellant sought the registration of both conditions.

- Denel argued:
(a) Condition (ii) was a personal right = an option which creates
personal rights
(b)Condition (ii) placed a positive obligation on the servient
owner which is not a characteristic of servitudes.

Legal question:

Decision

Both conditions should have been registered against all

subdivisions of the original piece of land

 intention of the creator … (student must explain)

 there was a subtraction from dominium … (student must
explain)