PVL3701 Study Guide 2016 University of South Africa PDF

# 2016 University of South Africa All rights reserved Printed and published by the University of South Africa Muckleneuk, Pretoria PVL3701/1/2017–2019 70538204 3B2 NEW RSC_STYLE  CONTENTS Page PART I INTRODUCTION 1 1. Division of study...

# 2016 University of South Africa All rights reserved Printed and published by the University of South Africa Muckleneuk, Pretoria PVL3701/1/2017–2019 70538204 3B2 NEW RSC_STYLE  CONTENTS Page PART I INTRODUCTION 1 1. Division of study guide 2 2. Division of work 2 PART II EXAMPLE 3 PART III STUDY MANUAL 7 iii  STUDY UNIT 1 INTRODUCTION TO PROPERTY LAW – THINGS AS LEGAL OBJECTS 9 INTRODUCTION TO PROPERTY LAW 9 1 Introduction 10 2 Definitions 11 3 Function of law of things 15 4 Basis and sources of law of things 15 THINGS AS LEGAL OBJECTS 17 1 Definition 18 2 Classification of things 21 STUDY UNIT 2 REAL RIGHTS AND PERSONAL RIGHTS (CREDITOR’S RIGHTS/CLAIMS) 29 1 Introduction 30 2 Theoretical distinction 32 3 Distinguishing characteristics 34 4 Subtraction form the dominium (ownership)-test 36 5 Categories of real rights 39 STUDY UNIT 3 OWNERSHIP DEFINITION OF AND LIMITATIONS ON OWNERSHIP 41 1 Definition of ownership 42 LIMITATIONS ON OWNERSHIP 47 1 Introduction 48 2 Limitations imposed by law 49 3 Limitations imposed by rights of other legal subjects 57 STUDY UNIT 4 ORIGINAL ACQUISITION OF OWNERSHIP 61 1 Introduction 63 2 Appropriation (occupation – occupatio) 64 3 Accession (accessio) 68 4 Mixing of solids (commixtio) and mingling of fluids (confusio) 85 5 Manufacture specification (specificatio) 86 6 Acquisition of fruits 87 7 Treasure trove 88 8 Expropriation 89 9 Acquisitive prescription 89 STUDY UNIT 5 DERIVATIVE ACQUISITION OF OWNERSHIP 95 1 Introduction 96 2 Definition 96 3 Elements 96 4 Delivery (movables) 99 5 Registration (land) 114 iv STUDY UNIT 6 OWNERSHIP PROTECTION AND TERMINATION 117 PROTECTION OF OWNERSHIP 118 1 Introduction 118 2 Property law remedies 119 3 Delictual remedies 126 4 Summary of remedies 130 TERMINATION OF OWNERSHIP 132 1 Introduction 132 2 Death of owner 134 3 Destruction of thing 134 4 Termination of legal relationship 134 STUDY UNIT 7 CO-OWNERSHIP 135 1 Introduction 136 2 Definition 136 3 Rights and duties regarding thing 137 4 Division of thing 140 5 Remedies 141 STUDY UNIT 8 POSSESSION AND HOLDERSHIP 143 NATURE OF 1 Introduction 144 2 Possession – fact or right? 152 3 Ius possessionis and ius possidendi 152 4 Possession and presumption of ownership 152 STUDY UNIT 9 POSSESSION AND HOLDERSHIP PROTECTION AND TERMINATION 159 1 Introduction 159 2 Remedies 159 TERMINATION OF POSSESSION AND HOLDERSHIP 172 STUDY UNIT 10 LIMITED REAL RIGHTS INTRODUCTION, SERVITUDES, RESTRICTIVE CONDITIONS 175 1 Introduction 176 SERVITUDES 179 1 Introduction 180 2 Definition 181 3 Establishment 182 4 Nature and classification 187 5 Land (praedial) servitudes 188 6 Personal servitudes 192 7 Termination of servitudes 197 v  8 Relationship between servitude holder and owner of burdened 198 thing 9 Remedies 199 10 Public servitudes 199 RESTRICTIVE CONDITIONS 201 1 Introduction 201 2 Remedies 201 STUDY UNIT 11 REAL SECURITY RIGHTS 203 CONVENTIONAL MORTAGAGES 1 Introduction 204 PLEDGE, MORTGAGE SECURITY BY MEANS OF CLAIMS 206 1 Introduction 208 2 Pledge 208 3 Mortgage 214 4 Security by means of claims 223 TACIT MORTGAGES (HYPOTHECS) 229 1 Introduction 230 2 Tacit hypothecs 231 3 Liens (rights of retention) 235 4 Judicial pledge 240 STUDY UNIT 12 MINERAL RIGHTS WATER RIGHTS LESSEE’S (TENANT’S) RIGHTS 243 1 Introduction 244 2 Meaning of concept ‘‘mineral’’ 244 3 Mineral rights 245 WATER RIGHTS 249 1 Introduction 249 2 Water Act 54 of 1956 249 3 National Water Act 36 of 1998 250 LESSEE’S (TENANT’S) RIGHTS 253 1 Introduction 253 2 Applicable only to houses and land 254 3 Establishment of lessee’s (tenant’s) real right 254 4 Effect of lessee’s (tenant’s) real right 256 STUDY UNIT 13 CONSTITUTIONAL PROPERTY LAW 259 1 Introduction 260 2 Property clause 260 STUDY UNIT 14 LAND REFORM 267 1 Introduction 268 2 Redistribution of land 268 vi 3 Land tenure reform 270 4. Restitution of land rights 274 STUDY UNIT 15 ADDITIONAL FORMS OF STATUTORY LAND USE AND REVISION 277 1 Introduction 278 2 Sectional Titles Act 95 of 1986 278 3 Share Blocks Control Act 59 of 1980 278 4 Property Time-sharing Control Act 75 of 1983 279 5 Housing Development Schemes for Retired Persons Act 65 of 279 1988 vii  PART I Introduction CONTENTS 1. DIVISION OF STUDY GUIDE 2. DIVISION OF WORK 1  1 DIVISION OF STUDY GUIDE This study guide is divided into four (4) parts. In Part I we supply general information regarding this module. Part II contains a graphic illustration with an accompanying set of facts that serves as a practical illustration of most of the legal relationships that you will encounter in this module. This illustration serves as a basis for your study of this module on property law. Keep it to hand when studying the different aspects of property law. We sometimes repeat parts of this illustration in our discussion of certain topics. Part III is the study manual which contains the actual study material for this module. 2 DIVISION OF WORK Part III comprises your study manual, which contains the study material for this module. The study manual is divided into 15 weeks (study units). Each study unit comprises one or more topics. We begin our discussion of each topic with a list of the relevant cases for that topic. Some of these cases are prescribed in the sense that you have to read them yourself (Tutorial Letter 101 will indicate which cases are prescribed for a particular year). Note that prescribed cases in this sense mean those that you are required to read and summarise yourself. Other cases are discussed fully in the study manual and some are mentioned only for reference purposes. The discussion of most topics begins with a practical example, which is often based on the facts of court decisions – note that our facts are based on the cases but are not necessarily identical to the facts in those cases. We provide these examples to give you an idea of the factual situations to which the legal principles that we are about to discuss relate. After you have studied a particular topic, you should be able to answer the questions that follow it. Some of these questions are based on the facts in the preceding examples. We sometimes provide answers to the questions as an indication of how we expect such questions to be answered. Now and then we identify the catch in the question. Apart from the multiple- choice questions, (MCQs) most of your assignment and examination questions come from these questions. 2  PART II Example Students often find it difficult to apply the principles of property law in a practical situation. To achieve one of the outcomes of this module you must be able to identify unfamiliar concrete and abstract legal problems in real or simulated factual scenarios by using evidence-based solutions and theory-driven arguments. You have to interpret and analyse daily occurrences that relate to property law. For this reason, we provide the following set of facts (followed by a diagram illustrating the facts) as an example to illustrate certain legal relationships that you will be required to deal with in this module. We also repeat sections of this diagram in the study manual to explain certain legal principles that we are discussing. Refer back to this example if you are trying to understand and visualise any specific principle of property law. Cut out the diagram below and keep it handy. The following aspects of property law, as they relate to this module, are illustrated by the given set of facts: X and Y X and Y are married in community of property and are, therefore, bound co-owners (a real right) of Waterford (an immovable thing). They are also co-owners of their car (a movable thing). Q and R Q and R have free co-ownership (a real right) of the farm Pulang (an immovable thing) because they purchased it jointly before their marriage out of community of property. Q and R are the in-laws of X. S S, the son of X and Y, has ownership (real right) of the farm Highlands (immovable thing); a right of way (personal or praedial servitude, therefore, a limited real right) over Q and R’s (his grandparents’’) farm Pulang restricting their ownership. S also has a personal right against his parents in terms of a contract. This entitles him to use Waterford for grazing purposes. 3  M M, X’s mother, has a personal servitude of habitation (limited real right) over the homestead on Waterford (immovable thing) in which she lives. She therefore has a limited real right to stay in the homestead for as long as she lives or until she relinquishes her right. Her real right therefore limits the co-ownership of X and Y. L The Land Bank has a mortgage bond (limited real right) over the farm Waterford, which provides the bank with real security that X and Y will repay their loan of R500 000-00. C Because C, the cooperative, has reserved ownership of the farm implements (movable things) on X and Y’s farm, X and Y will become co-owners only upon payment of the last instalment to C. The cooperative therefore has ownership (real right) of the farm implements (movable things). The cooperative also has a personal right (creditor’s right/ claim) in terms of a credit agreement against X and Y for payment of the instalments. D, E, F and G Depending on their legal relationship with Q and R, D, E, F and G have certain rights against Q and R. V and W Depending on their legal relationship with S, V and W have certain rights against him. J, N, O and P These persons are members of a neighbouring farming community adjacent to Highlands. H H is a mining company that wishes to acquire prospecting and mining rights to the minerals on these three farms. Z We use Z to denote a third party whose legal position is determined, in each situation, by the particular circumstances. For example: Q is the owner of a car. T, a thief, steals the car, changes the engine and registration numbers and sells the car to Z. T T is a thief whose legal position regarding a stolen thing is also discussed. The above set of facts (studied with the aid of the following diagram) should give you an impression of some of the legal relationships from everyday life with which you will be confronted in property law. You must keep on returning to this example whenever the different issues which are set out below are discussed or when other legal relationships are discussed. 4 5 PART III Study manual 7 S T U DY UN I T 1 INTRODUCTION TO PROPERTY LAW INTRODUCTION TO PROPERTY LAW CONTENTS 1 Introduction 2 Definitions 2.1 Legal subject 2.2 Legal object 2.2.1 Thing 2.3 Law, right, real relationships, real rights and entitlements 2.3.1 Law and right 2.3.2 Real relationships and real rights 2.3.2.1 Entitlements 2.4 Remedies 3 Function of law of things 4 Basis and sources of law of things 9  In this section we deal with the meaning of the subject property law, the place of property law in the legal system and various definitions which are necessary for a clear understanding of property law. We refer to the functions of property law, as well as its sources. We also distinguish between property law and the law of things. We concentrate on the latter in this module, but also discuss the relevance of the concept ‘‘property’’ for the Constitution of the Republic of South Africa, 1996 (see SU 13). 1 INTRODUCTION Although this module is termed the law of ‘‘property’’, it actually deals with the law of ‘‘things’’ in a narrow sense. In its broad sense property law can also be described as patrimonial law – the law dealing with a person’s patrimony (all his/her assets). Patrimonial law is divided into the law of things, the law of succession, the law of obligations and intellectual property law. Patrimonial law regulates all rights of which the objects are assets in a person’s estate. In this broad sense everything that forms part of a person’s estate can be described as ‘‘property’’. Property therefore includes a variety of assets, such as things (for example, land, a car, a computer and a mobile phone), personal rights (creditor’s rights/claims) (for example, the right to one’s salary, the right to the proceeds of an insurance policy or the right to claim the purchase price in terms of a contract of sale) and immaterial property rights (for example, copyright and patent rights). The law of things as a subdivision of patrimonial law falls under private law. The law of things deals with a specific legal object, namely a thing. To refresh your memory on the position of the law of things in the bigger legal picture, take a close look at the following diagram: DIAGRAM 1: Position of law of things in legal system Law of country Substantive law Adjective law Private Public Law of Law of law law procedure evidence Patrimonial Law of Law of husband and Law of law persons wife/parent and child personality Law of things/ Law of Law of Industrial property succession obligations property law 10  To sum up: in a broad sense the word ‘‘property’’ in the law of property refers to everything that forms part of a person’s estate. In a narrow sense and for the purposes of this module, property law refers to the law of things, which is the system of legal rules that regulates legal relationships between legal subjects in regard to a particular legal object, namely a thing. Definition of law of Therefore, the law of things can be defined as a branch of private law which consists of things a number of legal rules that determine the nature, content, vesting, protection, transfer and termination of various real relationships between a legal subject and a thing, as well as the rights and duties ensuing from these relationships. 2 DEFINITIONS In the law of persons you have already encountered some of the definitions discussed below. We repeat these definitions here to refresh your memory and because a clear understanding of these definitions is indispensable for a study of the law of things 2.1 Legal subject Definition A legal subject can be defined as any person (whether a natural or a legal person) capable of acting as a subject in legal relationships and of acquiring rights and in- curring duties in the process. Human beings (natural persons) are the most common and best-known legal subjects, but legal persons such as the State, universities, companies, close corporations, and so on, are also legal subjects, since they can act as legal subjects in legal relationships and can therefore acquire rights and duties. 2.2 Legal object A legal object can be defined as every object with which a legal subject has a legally Definition recognised relationship (see para 2.3.2 below). These legal objects may be divided into things, performances, immaterial property and personality property. Each of these Types legal objects has its own characteristics which distinguish it from other legal objects. The rights and duties established by legal subjects in legal relationships pertain to one or more of the various kinds of legal object. The law of things is concerned primarily with rights to things, although other rights may be discussed as well. In the law of things the distinction between things and performances (as legal objects) is very important since it determines the equally important distinction between real rights and personal rights (creditor’s rights/claims). In the law of things we are therefore concerned primarily with a specific legal object, a thing, and the legal relationships pertaining to it. 2.2.1 Thing Generally, a thing is a legal object characterised by its material (corporeal) nature. For a Definition complete picture of a thing in a legal sense, we define a thing as an independent part of the corporeal world, which is external to humans and subject to human control, as well as useful and valuable to humans. In the next section we discuss these characteristics in more detail. 11  2.3 Law, right, real relationships, real rights and entitlements 2.3.1 Law and right Definition We have already referred to the ‘‘law’’ above without defining it, since we assume that you know the meaning of the term. To refresh your memory we define the law as: that body of rules and norms which regulates and harmonises society by demarcating the rights and duties of legal subjects. One must furthermore distinguish between ‘‘the law’’ and ‘‘a right’’. Rights deal with the lawful relationships between legal subjects and the relationship between legal subjects and the objects of their rights. 2.3.2 Real relationships and real rights A legal relationship is a relationship to which the law attaches consequences. Where the object of a legal relationship between legal subjects is a thing, we refer to a real Definition relationship. A real relationship is the particular legal relationship between one or more legal subjects and a thing. This relationship has certain implications for the legal order. Note, furthermore, that the concept ‘‘real relationship’’ is broader than the concept ‘‘real right’’, since real relationships include both real rights and certain unlawful real relationships. There are usually two sides to a real relationship (and therefore, if it is a lawful real relationship, to a real right), namely (i) the subject-object relationship between the particular legal subject and the particular thing involved in the relationship (ii) the subject-subject relationship between the particular legal subject and all other legal subjects A real right is therefore always a dual relationship: the subject-object (thing) relationship and the subject-subject relationship. In certain cases, real relationships may take on distinctive characteristics, with the result that the rights and duties ensuing from these relationships may vary. We therefore distinguish between different kinds of real relationships on the basis of the ensuing rights and duties. In principle, a legal subject may acquire rights from a real relationship only if it is lawful, that is, if it complies with the legal rules. A legal subject will not acquire any rights from unlawful real relationships, although the relationship as such may still have consequences for the law of things (as would be the case with the real relationship between a thief and the thing he/she has stolen – see SU 9 below on possession and holdership). Important real The nature, content and consequences of a particular real relationship in a specific relationships situation may be influenced by the attitude of the legal subjects concerned, by the nature of the thing, as well as by a variety of surrounding circumstances. The most important real relationships are usually divided into three categories: (i) ownership, which is always a lawful real relationship and therefore a real right (see SU 3) (ii) possession (physical control of a thing with the intention of an owner (animo 12  domini)), which is always unlawful and is therefore only a real relationship, not a real right (see SU 8) (iii) holdership (physical control of a thing with the intention to derive a benefit), which may be lawful or unlawful. When it is lawful it could give rise to a real right (see SU 11 and 10) Make sure that you understand this distinction. DIAGRAM 2: Real relationships Three most impotant categories of real relationships 6 6 6 Ownership (SU 3–7) Possession Holdership (SU 8–9) – Always lawful – thus real right – Always unlawful – Can be lawful or unlawful Acquistion (SU 4–5) – thus a mere real – Never the intention of an owner, relationship 6 6 but intention to derive a benefit original method derivative method – always intention of an lawful holder could have a real right Entitlements (SU 3) owner eg pledgee or usufructruary; another use; fruits; control; consume or destroy; example of a lawful holder is a lessee alienate; burden; vindicate bona fide possessor in terms of a valid lease agreement thinks he is the owner but isn’t unlawful holder has a mere real Limitations on ownership (SU 3) relationship 6 6 mala fide possessor can be bona fide law rights (SU 2) knows he is not the eg lessee who thinks the statutory and neighbour (i) limited real rights owner but holds lease agreement is valid but over another thing as if he is the it isn’t person’s thing owner, eg thief 6 can be mala fide 6 (SU 10) (SU 11) eg lessee who knows the – servitudes – pledge lease agreement has expired – restrictive conditions – security by means of claims but stays on – mortgage – tacit mortgages: tacit hypthec of landlord or credit grantor, liens, judicial pledge Other real relationships (ii) personal rights mineral rights (SU 12) water rights (SU 12) Remedies (SU 6) lessee’s rights (SU 12) 6 6 real delictual Termination (SU 6) death of owner, destruction of thing termination of legal relationship free co-ownership, eg brother buying a farm together 6 bound co-ownership eg marriage in community of property 6 Co-Ownership (SU 7) 13  Possession and holdership can be subdivided, in turn, into the various real relationships, which may be lawful or unlawful, in good faith (bona fide) or bad faith (mala fide). The establishment, nature, content, protection and termination of each of these relationships are governed by the rules of the law of things (see SU 8). The right which has its origin in a lawful real relationship is known as a real right. Only lawful real relationships, namely ownership and lawful holdership, confer real rights. Possession and unlawful holdership, on the other hand, are unlawful real relationships, which do not confer any real rights, although the law attaches certain consequences to such relationships. Definition of real right Therefore a real right can be defined as a lawful real relationship between a legal subject and a thing which confers direct control over the thing on the legal subject, as well as the relationship between the legal subject and all other legal subjects who must respect this relationship. The object of a lawful relationship thus determines the nature of that right. Apart from real rights, we also recognise personal rights (creditor’s rights/claims), immaterial property rights and personality rights. This module deals almost exclusively with real rights, but we also refer to personal rights (the distinction between the two is very important in property law and we discuss this aspect in SU 2 below). The difference between the four classes of rights is illustrated by the following diagram: DIAGRAM 3: Categories of rights OBJECT RIGHT EXAMPLE Thing Real right Ownership Performance Personal right Right to purchase price Personality Personality right Right to good name Immaterial property Immaterial property right Copyright 2.3.2.1 Entitlements A legal subject who acquires a real right from a lawful real relationship is usually entitled by the legal order to perform certain acts in connection with the thing. For example: & an owner may sell the thing (see SU 3), & a servitude holder may use the thing (see SU 10) and & a pledgee may hold the thing as security (see SU 11) The capacities conferred on the legal subject by virtue of a right, in this case a real right, are called entitlements. The term ’’entitlement’’, therefore, refers to the content of a right. The entitlements of a real right determine which acts a legal subject is entitled to perform in regard to a thing. In the case of the real right of ownership, the most important entitlements are the legal subject’s entitlements to: & control, & use and enjoyment, 14  & burden (encumber with limited real rights such as servitudes or real security rights, see SU 10), & enjoy the fruits, & consume, & alienate (sell and deliver) and & vindicate (claim from whoever is unlawfully in control, see SU 6) the thing. The various legal rules governing the establishment and exercise of these entitlements all form part of the law of things (see SU 3 par 1.4). 2.4 Remedies When the law recognises a particular real relationship or a particular real right, Definition enforcement takes place by means of a specific real remedy. A real remedy can be defined as a legal process with its own purpose, for which certain requirements are set and which protects, maintains or restores a particular real relationship in a specific way. A real remedy, therefore, finds application in lawful and unlawful real relationships. Various remedies are used in the law of things to fulfil different functions. & In the case of real rights, remedies serve to maintain, protect or restore the real rights concerned (see SU 6), but & there are also remedies governing the legal consequences of unlawful real relationships, for example, the spoliation remedy (see SU 9 on the protection of possession and holdership). 3 FUNCTION OF LAW OF THINGS The function of the law of things can be summarised as follows: 1 It strives to harmonise or regulate various competing ownership rights, especially between neighbouring owners (see SU 3). 2 It strives to harmonise or regulate an owner’s rights in regard to his/her thing with the rights of other limited real right holders to the same thing (see SU 10 and 11). 3 It controls the acquisition (see SU 4 and 5), protection and extinction (see SU 6) of things and real rights. 4 BASIS AND SOURCES OF LAW OF THINGS It is generally accepted that the modern law of things in South Africa and the concept of ownership, in particular, are derived directly from Roman law and still bear many similarities to it. This view should be approached with circumspection, since the socio- economic and cultural environment in which a particular legal system functions exerts an important influence on the nature, content and application of legal principles and institutions in that system. The classical Roman law of the first three centuries AD developed and was applied in an environment that differed radically from the modern Western, and particularly the African, environment. It would therefore be misleading to assume that specific legal principles in the two systems should be exactly the same. It is true, historically, that the modern law of things is the end product of a long and complex 15  development which had its origin in classical Roman law. However, it is equally true that this legal system underwent drastic changes in the more than twenty centuries of its existence. Therefore, many characteristics of the modern law of things are the products of our time and of the circumstances to which it applies. The sources of the modern law of things are therefore to be found not only in the historic writings of Romanists since the classical Roman period and the works of the Roman-Dutch writers, but also in statute law (legislation) and in case law (precedents created by court decisions). Since its adoption the Constitution of the Republic of South Africa, 1996, has played a major role in the development of the law in general and, in particular, in the development of the law of things. Furthermore, customary law greatly influences various aspects of the law. The sources of the modern law of things can, therefore, be summarised as follows in order of priority: Sources (i) the Constitution of the Republic of South Africa, 1996 (ii) statute law (iii) case law (iv) common law (Roman-Dutch law)/indigenous (customary) law It should be noted that, in a multicultural society such as South Africa, indigenous law rather than Roman-Dutch law may be the subsidiary legal system in certain instances. ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Activity After having studied this study unit, you should be able to answer the following questions: 1 Distinguish between (a) law of property and law of things (4) (b) real right and entitlement (5) (c) legal object and thing (4) (d) real relationship and real right (4) 2 Briefly mention the functions of the law of things. (6) 3 Name the sources of the current law of things in order of priority. (5) 16 THINGS AS LEGAL OBJECTS CONTENTS 1 Definition 1.1 Elements of definition 1.1.1 Corporeality 1.1.2 External to humans 1.1.3 Independence 1.1.4 Subject to human control 1.1.5 Useful and valuable to humans 2 Classification of things 2.1 Criteria for classification 2.1.1 Relation to humans 2.1.1.1 Negotiability 2.1.2 Inherent nature 2.1.2.1 Singular and composite things 2.1.2.2 Movable and immovable things 2.1.2.3 Fungible and non-fungible things 2.1.2.4 Consumable and non-consumable things 2.1.2.5 Divisible and indivisible things 17  _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Example X and his wife, Y, to whom he is married in community of property, live in a new house on the farm Waterford. X and Y are co-owners of the farm and their car, but the farm implements have been purchased in terms of a credit transaction from C, the cooperative. C has reserved ownership of the farm implements, which are stored in sheds on the farm. C therefore has personal rights (creditor’s rights/claims) against X and Y for payment of the loan plus interest. S has a contract with his parents (X and Y) for the purpose of grazing his livestock on their farm. S also grows bulbs in a nursery on this farm. X sells peaches from the fruit trees on his farm to a factory. He also sells wool from the sheep that he runs on the farm. Y, his wife, sells the vegetables from her garden and dairy products at the farm stall on the farm. 1 DEFINITION Definition In the above section we distinguished between a legal object and a thing. A thing may be defined as a legal object which is an independent part of the corporeal world, is external to humans, subject to human control and is useful and valuable to humans. These are therefore the characteristics of a thing or the elements of the definition of a thing. In the following section we discuss each of these elements separately. 1.1 Elements of definition 1.1.1 Corporeality It is generally accepted that the law of things is confined to things that form part of the corporeal world and are therefore perceptible by means of the senses – for example, land, a car, a brick or a horse. Two specific problems are created by this requirement: Problems (i) There is a Roman-Dutch law tradition according to which certain real rights are defined in such a way that the object of the right need not be a corporeal thing, but may be another right, which is then described as an incorporeal thing. Although this tradition is undesirable, logically and systematically speaking, it is well established and works in practice. We can, however, deal with the institutions where an incorporeal thing is the object of a right as exceptions. The most important exception is a pledge of claims (see National Bank of SA Ltd v Cohen’s Trustee 1911 AD 235 and Millman NO v Twiggs 1995 (3) SA 674 (A) – see the discussion below in SU 11). In principle, however, we shall confine the concept of a thing to a corporeal thing. (ii) Technological developments have given rise to such questions as whether a natural process such as electrical or atomic energy can or should be regarded as a thing. Such a question may arise in various contexts, and would determine, for example, whether something like electricity can be stolen and whether an electricity supply, internet service or telephone service may be subject to spoliation (Telkom SA Ltd v Xsinet (Pty) Ltd 2003 (5) SA 309 (SCA) – see SU 9 on the protection of possession and holdership). 18 1.1.2 External to humans It is accepted in modern law on the basis of religious and ethical considerations underlying the legal system that the human body and parts thereof cannot be regarded as legal objects. An object can therefore qualify as a thing only if it is not part of the human body. In future this issue may give rise to considerable debate owing to the advancement of medical technology and the shortage of human body parts for transplants. A distinction should be drawn between human tissue (parts) which can easily be separated from the body and replenishes itself, for example, hair, blood, semen and ova, on the one hand, and body parts which can be separated, but where separation may be harmful, for example, kidneys and lungs. The first category is significant at present because of its implications for the provision of human procreation cells in the growing industry made possible by artificial procreation. In the second category we are dealing with the need for human body parts for organ transplant purposes. In both these categories we have objects belonging to a living person in mind. The question, therefore, is whether the law should allow people to deal with parts of their bodies. Dealings with and in these objects are regulated by the National Health Act 61 of 2003. Objects deriving from the human body which can no longer be related to the person concerned because he/she is brain dead also pose a problem. Here two issues should be distinguished: the one is whether the person gave his/her consent to such an organ donation before his/her death and the other is whether payment can be levied by their relatives. Although corpses or parts of corpses may be regarded as things, they fall outside the legal sphere (extra commercium) and are therefore not subject to private ownership (see para 2.1.1.1 below). 1.1.3 Independence The independence of a thing denotes that it can function as a legal object for the purposes of the law of things only if it has its own, individual existence and can be recognised as a demarcated, distinct entity. The requirement that a thing must be capable of existing independently is the result of the Roman-Dutch view that two persons cannot simultaneously be the owners of different aspects of the same thing. This poses certain problems: (i) In most cases, independent individual things (for example, a pen or a book) do not create any problems, but composite things (like a car or a bicycle) are made up of several parts, and this can lead to problems. It is therefore necessary to distinguish between principal things, accessory things and auxiliary things in order to apply the principle of independence, so as to obviate the problems surrounding the ownership of composite things (see para 2.1.2.1 below). (ii) With certain kinds of things, the requirement of an independent existence gives rise to specific problems, because some things (for example, water, sand or gases) are not naturally delimited into recognisable units, but are only collected into independent units by human intervention (for example, by collecting the water, sand or gas in a container, such as a bottle, a paper bag or a cylinder, respectively). Only with such human intervention can seawater or fresh air be said to be an independent thing. (iii) In certain cases, the characteristic of independence or individuality has been 19  adapted by new developments in the law of things. One example is that of ownership in sectional title units. The sectional title owner establishes a right of ownership in a unit which comprises a section of a building and a share in the communal parts of the building and the land on which the building stands (co- ownership – see section 1 of the Sectional Titles Act 95 of 1986). Thus the concept ‘‘thing’’ has been adapted statutorily to accommodate the independence principle. The sectional title unit can therefore be regarded as an independent thing (on the basis of its statutory definition – see SU 15 par 2). The same considerations are relevant in the demarcation of pieces of land on which individual owners establish their rights of ownership: the earth is not a thing as such, and land may be subject to real rights only when separate pieces of land have been surveyed and demarcated into separate units (see the Land Survey Act 8 of 1997). 1.1.4 Subject to human control Objects can be significant for the law of things only if they have the potential to be legally controlled by humans. It would be absurd, at this stage, for any person or group of persons to claim control over the planet Mars, for example, and therefore it cannot be considered a thing. Nor is it possible to control objects, such as air or seawater, which have not been divided into individual, controllable units by human intervention. Only when it is really possible for humans to bring a certain object under their control in such a way that a legal relationship may be said to exist between the legal subject and the object can the object be regarded as a thing. 1.1.5 Useful and valuable to humans The law is only concerned with real relationships when these have legal consequences. This is the case only when a thing is useful or valuable to a legal subject. The legal relationship between a home owner and a grain of sand in his/her garden has no legal consequences, in principle, and the grain of sand would not be considered a thing. A heap or load of sand, on the other hand, could have value, and would therefore be regarded as a thing. Value need not denote economic or market value with a price attached to it, but simply that the legal subject wants his/her relationship with the thing to be maintained by the law against interference by other legal subjects. Whether the law would regard a specific thing as being of value to humans would depend largely on the circumstances and would be determined objectively. The legal maxim de minimis non curat lex (the law does not concern itself with trivialities) is an important consideration here. An old family photograph, for example, may have sentimental value, which would be sufficient for it to qualify as a thing. ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Activity Before you continue with the next section, answer the following questions: 1 Name the characteristics of a thing. (5) 2 Briefly discuss the characteristics of a thing. (15) 3 Briefly distinguish between property and things. (5) 20  Answer Everything that forms part of a person’s estate (½) can be described as ‘‘property’’. Property therefore includes a variety of assets, (½) such as things (½) (for example, a car, a computer and a mobile phone), personal rights (creditor’s rights/claims) (½) (for example, the right to one’s salary, the right to the proceeds of an insurance policy or the right to claim the purchase price in terms of a contract of sale) and immaterial property rights (½) (for example, copyright and patent rights). A thing is a specific asset (legal object) in a person’s estate, ie it is an independent part (½) of the corporeal world (½) which is external to humans, (½) subject to human control (½) and is useful and valuable to humans. (½) Remark This answer can be adapted to answer question 2(a) in section 4 above (Basis and sources of the law of things), which deals with the distinction between the law of property and the law of things. A mark of (10) could also be awarded for this question, in which case all the marks would be (1) instead of (½). 2 CLASSIFICATION OF THINGS 2.1 Criteria for classification The practically infinite number of objects which may be defined as things can be divided into different categories that are significant for various aspects of the law of things. We classify things in various ways, according to different criteria. All things may be classified according to either of two major criteria, namely: Major criteria (i) their relation to humans (ii) the inherent nature of the thing concerned 2.1.1 Relation to humans When things are classified according to this criterion, the nature of the thing is not considered, but only the function or purpose of the thing in various legal processes and transactions. Here we distinguish between negotiable and non-negotiable things: 2.1.1.1 Negotiability Not negotiable The negotiability of a thing can influence its function radically, and classification of things according to this criterion is therefore important. In principle, all things are negotiable (res in commercio = things which are in the legal sphere or in commerce or trade). The following things are excluded from commerce (res extra commercium) and are therefore not negotiable: (i) Res communes omnium: things that do not fall under private legal control, but that are available to be used by all legal subjects, for example, free air and things that are really only susceptible of human control by communal use. (ii) Res publicae: things that belong to the state but that are used for the general benefit and use of the public, for example, national parks, the seashore, et cetera. (iii) Other res extra commercium: things that are not freely negotiable for another reason, for example, body parts or a corpse. For religious and/or ethical reasons a corpse and parts of a corpse are not regarded as things. 21  The Roman law category of things belonging to the gods (res divini iuris) is no longer recognised in modern law, but the question has been raised whether land on which family graves are situated should not be regarded as being outside commerce. Negotiable things (res in commercio) may be either someone’s property (res alicuius) or no-one’s property (res nullius). In the latter instance anyone can claim ownership of them by means of appropriation (see SU 4 para 2.2.2). We therefore distinguish between: (i) res alicuius: things belonging to an owner and forming part of his/her estate (ii) res nullius: things that are susceptible of ownership, but that belong to no one at a particular stage, for example, wild animals or fish (see SU 4 para 2.2.2) or a thing that has been thrown away by its owner who no longer intends to be the owner (res derelictae). 2.1.2 Inherent nature When this criterion is used to categorise things, things are classified not according to their relation to man, but according to their inherent characteristics or qualities. Various classifications are possible on this basis. 2.1.2.1 Singular and composite things Things may be singular or composite, depending on whether the thing consists of a single piece or of a composition of constituent parts. A horse, a stone or a brick are examples of singular things. A composite thing is made up of constituent parts, or even of independent things that have been joined together to form a new entity, for example, a car or a bicycle. Here the constituent parts lose their individuality and the composite thing is regarded as one thing for the purpose of the law of things. Distinction A collection of things must be distinguished from composite things. Two forms of collections are relevant: In the one we deal with a collection of similar principal things and in the other the collection consists of different types of principal things. In both cases the collection is treated as a singular unit. Here we distinguish between the following: (i) A collection of similar things, for example, a flock of sheep, a swarm of bees or the stock of a shop may be treated as a unit by the law, and that unit is then a composite thing for the purposes of the law, although the members or parts of the collection do not lose their individuality. It is important to remember that such a collection is only regarded as a unit for certain purposes. The owner owns both the flock or swarm or stock and the individual sheep or bees or items in the stock. (ii) A collection of dissimilar things, such as corporeal and incorporeal things or things and rights, for example, an entire estate. Such a collection would be treated by the law as a legal unit, but then only for specific purposes. This would be the case in insolvency law and in the law of succession where the insolvent estate and the deceased estate, respectively, are regarded as independent entities. A composite thing usually consists of various constituent parts. In principle, we distinguish between three kinds of constituent parts: (i) The principal thing is the independent thing made up of various parts, with an independent existence as a composite thing. It is not a constituent or supplementary part of another thing. A car is an example of a principal thing in 22  composite form. Land is always regarded as the principal thing, not the buildings attached to it (see SU 4 para 3.4.2). (ii) An accessory thing can have a separate existence apart from the composite thing, but has forfeited its independent existence in that it has been physically joined to the principal thing, for example, a brick cemented into a wall (see SU 4 para 3.4.2). (iii) An auxiliary thing can, like an accessory thing, have an independent existence apart from the composite thing. However, it forfeits its independent existence without being physically joined to the principal thing. The auxiliary thing is economically dependent on the principal thing (Senekal v Roodt 1983 (2) SA 602 (T)). A key is a good example of an auxiliary thing, since it loses its independent character in that its economic value in terms of its purpose and use depends on the unity between the principal thing (the lock) and the key. Without the lock, the key is not functional. Fruits Fruits form a separate class of things, for example apples on the tree (natural fruits) or the interest on investments (civil fruits). As long as a fruit is attached to a principal thing, it is accessory to the principal thing. However, at various stages and for various reasons, it has to be distinguished from the principal thing to which it relates (see, eg, usufruct SU 10 para 6.2.1). Fruits denote the income or yield regularly produced by the principal thing, while the principal thing itself is preserved. In principle, fruits are accessory things and as such constitute part of the principal thing, but with this difference: fruits are intended to be separated from the principal thing so as to have an independent existence. We distinguish between: natural fruits (fructus naturales), for example, wool, fruit or milk, and civil fruits (fructus civiles) or non-organic yield, for example, interest on capital or rent payments. In the case of natural fruit further distinctions can be made between: hanging fruits (fructus pendentes), separated fruits (fructus separati) and gathered fruit (fructus percepti). The rights to these fruits will vary according to the relevant legal relationship involved. 2.1.2.2 Movable and immovable things Another classification according to the nature of things is that of movable and immovable things. In principle, immovable things consist of land and everything that is permanently attached to land, including natural attachments like plants and artificial fixtures like buildings and structures that are permanently attached to land. Movable things are things that can be moved from one place to another without being damaged or losing their identity, for example a choir, a car, a shirt and money. Movable things are things that can be moved form one place to another without being damaged or losing their identity, for example a chair, a car, a shirt and money. This distinction has significance in several fields of law: 23  (i) It affects the formalities and requirements for the transfer of ownership. Transfer of ownership of movables is effected by delivery, and of immovables by registration in the deeds registry (see SU 5 para 5). (ii) Several statutes distinguish between movable and immovable things: for example, the Deeds Registries Act 47 of 1937 and the Alienation of Land Act 68 of 1981. (iii) Private international law distinguishes between movable and immovable things in that the law of the owner’s domicile (lex loci domicilii) applies in the case of movables, whereas the law of the immovable thing’s location governs immovables (lex loci rei sitae) (Southern Tankers (Pty) Ltd t/a Unilog v Pescana D’’Oro Ltd 2003 (4) SA 566 (C) 570E). (iv) The right to alienate or encumber the estate of a minor is affected as follows: Permission of the High Court is required for the alienation or encumbrance of a minor’s immovable assets worth more than R100 000-00. (v) In the execution of a judgment debt and in the case of insolvency, the debtor’s movable assets are sold before the immovables, to secure payment of the judgment debt. (vi) In criminal law theft can be committed only in respect of movables, while arson can only be committed in relation to immovables. (vii) Real security is effected by means of a pledge in the case of movables (see SU 11 para 2) and by means of a mortgage (see SU 11 paras 4.3.2 and 4.3.3) in the case of immovable things. 2.1.2.3 Fungible and non-fungible things Things are fungible (replaceable) (res fungibiles) or non-fungible (irreplaceable) (res non fungibiles). This distinction depends on whether they have individual characteristics (or value), or whether they belong to a certain kind or genus. The individual character of a kilogram of sugar or a litre of water is negligible, and they can therefore be replaced by a kilogram of the same kind of sugar or by another litre of water. However, an original Picasso painting cannot simply be replaced by an original Smith painting. Significance of This distinction is significant in various areas of law: distinction (i) In the law of obligations: The replaceability or otherwise of a specific thing is determined by agreement between the parties, and may affect the consequences of the agreement. For example, if X buys the racehorse ‘‘Lightning’’ and the seller delivers the farm horse ‘‘Lazy Boy’’, the seller has not performed in terms of the agreement. However, if X buys ‘‘a horse’’, the seller can deliver any horse. (ii) Pledge: A fungible cannot, in principle, be given in pledge with the intention that it can be replaced by a similar thing. It is a basic rule of the law of pledge that the pledgee may not use the pledged article (see SU 11 para 2.4.1). (iii) Transfer of ownership: In certain circumstances a fungible may change ownership by means of commixtio (mixing of solids) or confusio (mingling of liquids) (see SU 4 para 4). (iv) Replacement: It would seem that the courts are more inclined to authorise the repair and even the replacement of a damaged or destroyed fungible thing in a spoliation order, in certain cases, than would be the case with non-fungibles (see SU 9 para 2.3.3). 24 2.1.2.4 Consumable and non-consumable things Consumable things (res consumptibiles) are used up (consumed) or their value is considerably diminished by ordinary use, for example, pencils, foodstuffs and cigarettes. Non-consumable things (res non consumptibiles) are preserved in spite of normal use, for example, a motor car or a stove. A thing can be non-consumable despite the fact that it is subject to normal wear and tear. This distinction has significance in more than one instance: (i) Loan, lease and usufruct: With reference to consumable things, the borrower’s, lessee’s or usufructuary’s duty to maintain is really a duty to replace. (ii) Ownership: A person who uses a consumable thing becomes the owner by means of consumption. (iii) Money is regarded as consumable. 2.1.2.5 Divisible and indivisible things A thing is divisible if it can be divided, without losing its essential characteristics, into smaller parts of which the nature and function are essentially the same as those of the original thing. Examples are: a bag of sugar, a roll of fabric, or a piece of land. Indivisible things, such as a car or a painting, cannot be divided without destroying or changing the nature of the thing. ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Activity After you have studied this section, you should be able to answer the following questions: 1 Rearrange the second column below so that the examples listed there correspond to the things in the first column. Things Examples (a) Negotiable thing (i) Picasso painting (b) Divisible thing (ii) Land (c) Composite thing (iii) Free air (d) Incorporeal thing (iv) Seashore (e) Non-fungible thing (v) Wild animal (f) Res communes omnium (vi) Brick (g) Singular thing (vii) Creditor’s right (h) Non-negotiable thing (viii) Roll of fabric (i) Res publica (ix) Corpse (j) Immovable thing (x) Radio (10) 2 Briefly distinguish between (a) fungible and non-fungible things and explain the relevance of this distinction (7) (b) singular and composite things (5) (c) consumable and non-consumable things (5) 25  Answer Consumable things (res consumptibiles) are used up (consumed) (1) or their value is considerably diminished by ordinary use, (1) for example, pencils, foodstuffs and cigarettes. Non-consumable things (res non consumptibiles) are preserved (1) in spite of normal use, (1) for example, a motor car or a stove. A thing can be non-consumable despite the fact that it is subject to normal wear and tear. (1) (d) movables and immovables (4) (e) divisible and indivisible things (4) (f) composite things and a collection of things (4) 3 Give an example of each of the following: (a) principal thing (1) (b) accessory thing (1) (c) auxiliary thing (1) 4 Give three reasons why it is important to distinguish between movable and immovable things. (6) 5 X and his wife, Y, to whom he is married in community of property, live in a new house on the farm Waterford. X and Y are co-owners of the farm and their car, but the farm implements have been purchased in terms of a credit transaction from C, the cooperative. C has reserved ownership of the farm implements which are stored in a wooden shed on the farm. C therefore has personal rights (creditor’s rights/claims) against X and Y for payment of the loan plus interest. S has a contract with his parents (X and Y) for the purpose of grazing his livestock on their farm. S also grows bulbs in a nursery on this farm. X sells peaches from the fruit trees on his farm to a factory and wool from the sheep. Y, his wife, sells vegetables from her garden and dairy products at the farm stall on the farm. Give an example from the above set of facts of the following types of things: movable thing (1) immovable thing (1) incorporeal thing (1) composite thing (1) principal thing (1) accessory thing (1) natural fruit (1) civil fruit (1) Answer movable things: car, farm implements or livestock (1) immovable thing: farm (1) 26 incorporeal thing: C’s personal right (creditor’s rights/claims) against X and Y for payment of the loan or S’s personal right against his parents (X and Y) to graze his livestock on their farm (1) composite thing: farm (1) (A farm is a composite thing because buildings that, through attachment (accessio) are built on the farm), lost their independance, form part of the principal thing. principal thing: farm (land) (1) accessory thing: buildings or houses (1) (accessory things because they became part of the principal thing (the land) by accession) natural fruit: peaches, vegetables, dairy products or wool (1) civil fruit: interest on the loan (1) 27 S T U DY UN I T 2 REAL RIGHTS AND PERSONAL RIGHTS (CREDITOR’S RIGHTS/ CLAIMS) CONTENTS 1 Introduction 2 Theoretical distinction 2.1 Personalist theory 2.1.1 Content 2.1.2 Criticism 2.2 Classical theory 2.2.1 Content 2.2.2 Criticism 3 Distinguishing characteristics 4 Subtraction form the dominium (ownership)-test 5 Categories of real rights 29  In this section we discuss the difference between real and personal rights with reference to the different theories on this issue, as well as the approach in case law. We indicate why this distinction is important for the law of things. 1 INTRODUCTION _____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________