In more developed jurisdictions practitioners, professors and lecturers of law, critique decisions of the courts. An area of interest to me is the so called “Phakalane cases”, for in my view the courts point us in the right direction but seem to fail to go there themselves. Due to space constraints I will deal with issues very briefly.
Various judges have failed to apply the basic rule that only the legal reason for the decision is binding. In the Chomba case Lesetedi J. (as he then was) made a factual finding that the conditions in the various deeds of transfer that Phakalane Estates was relying upon were similar in material respects and also that the minimum values suggested the development of an upmarket area.
There was no evidence before the court to show that the minimum values suggested the development of an up-market area. There was no evidence from architects, engineers, quantity surveyors or building cost consultants to support the court’s finding. A High Court judge is not bound by these findings. It is not proper for a judge reading Chomba to assume that Lesetedi J’s observations are properly founded; they are not.
Various judges in deciding the cases have in applying the principles in the Chomba case failed to have regard to the fact that they have to read the condition in the deed in each particular case and interpret it. The Chomba case did not interpret the development condition because Phakalane Estates contention was not challenged in regard to what the development covenant meant. In any case what Phakalane Estates set out was its opinion as to what the condition meant. As a matter of law, a litigant does not have to react to another’s opinion in the pleadings. He is only called upon to react to facts.
In the ASA Enterprises case Makhwade J observed that he had no doubt that Gaborone City Council would not regard a building consisting of a foundation and a wall but no roof as a residence. The difficulty I have with this observation is that it masks something that is very easy to miss. Underlying this observation was the awareness of the court that the view of the GCC was material. In all the Phakalane cases there is no claim that GCC has been approached and it has determined that what has been erected is not a residence or a residential building.
The importance of the GCC determination arises from the fact that the development covenant itself requires GCC to approve the materials and standards and says that the development must be in accordance with all laws and regulations for the time being in force. The Building Control Section of GCC does not undertake inspections without knowing the type of building that it is inspecting. The inspectors know from the very beginning, from the approved building plans, what type of building is being erected.
Gaborone is a planning area and proposed buildings are classified at planning stage, a stage that precedes erection. A proposed building is classified as residential, commercial, industrial or other at planning stage. It is not sustainable for Phakalane Estates to at a later stage claim that a building is not of the type specified in the title deed where GCC has already classified the building. Phakalane Estates must first apply for review of the classification by GCC before it can approach the courts. There is established authority for the position that where a local authority has classified the building it is not for the court and the litigants to argue classification without going through the review step. The classification of a building as a residence or a residential building does not change during its erection.
The Chomba case sets out the conditions under which a development scheme can be deemed to exist. There is a comment in Chomba that should be read carefully, that says “The full development of the plots would no doubt naturally be expected to meet the object and character of the scheme” The Court of Appeal in the ASA Enterprises case approved the observation that “non development of the plots would be inimical to the whole purpose of the scheme”. The Court of Appeal did not determine what the purpose of the scheme was.
There are words missing in Lesetedi J’s observation. His observation should read “The full development in accordance with the development condition would no doubt naturally be expected to meet the object and character of the scheme” Interestingly Phakalane Estates can extend the period to meet the development condition without reference to the residents of Phakalane. If full development is for the object and character of the scheme why does Phakalane Estates, without having reserved any right to vary the condition, have the right to extend the period for development by levying a penalty that it keeps for itself?
A judge who does not apply basic rules may on reading the expression about minimum values indicating an up-market development, and the reference to full development, be misled into thinking that Lestedi J. had correctly stated the object and character of the scheme. Quite clearly Lesetedi J was not entitled to reach the conclusion on the up-market finding. Other judges of the High Court are therefore not bound to follow his views.
Various judges in following Chomba have failed to give due regard to the fact that neither Justice Lesetedi nor the Court of Appeal have made any real attempt to interpret the development condition. They were not called upon to do so. It is only Justice Makhwade and Justice Dambe amongst others who come close. Even then Justice Makhawde in the ASA Enterprises case made an observation that I find important. He remarked that “anyone familiar with property transaction in this jurisdiction will know that even the government of Botswana transfers property with similar clauses”
This observation points us in the right direction. For purposes of repossession the government condition requires the purchaser to have failed to erect and complete the building within a stated period. The Phakalane development condition is silent on the need to have completed the building within a stipulated time frame. The government development condition also requires erection of a building of a minimum value or exceeding a certain fixed amount. The Phakalane condition only requires the purchaser to erect the building at a minimum value or cost three times the value of the initial value or cost of the of the land. These differences in the conditions are very material.
There is a very big difference between erecting a building of or exceeding a certain cost and erecting a building at a certain minimum cost. It is possible to erect a building at a certain minimum cost without completing it. That is why there is a need to expressly state the obligation to complete. Such an obligation is over and above the obligation to erect. There is no rule of construction costing that says a building can be completed at a cost three times the value or cost of the land. In the ASA Enterprises case the title deed has a condition that the property shall not be transferred unless the purchaser has erected and completed a residence. This shows quite clearly that there is a difference between erect, and erected and completed, a difference that is known to all but seems to escape our judges.
The law allows a person erecting a building in Gaborone to extend the period to complete the erection of the building at any time. That is why the government takes away this right in express terms in its Deeds of Transfer. There is a presumption against waiver of rights. Everyone including Phakalane Estates is presumed to know the law. Why should a family that noticed the difference between the government condition and the Phakalane condition, before entering into a contract of sale with Phakalane Estates, be deprived of an advantage that arises out of a purchase of land at Phakalane instead of State Land?
Our courts suggest that even though the Phakalane development condition is silent on the need to complete, the purpose of the building being erected is that of residential use. Our courts miss their own point. The point is when is the building supposed to be fit for use? In view of the silence on the need to complete within a fixed time frame, there is no time frame when the building should be fit for use. A building is not classified as a residence when it is fit for use. It is classified at planning stage way before it is erected or fit for use.
Every purchaser of land at Phakalane and Phakalane Estates itself, took the risk that their neighbor or the purchaser, would take full advantage of the law. The High Court judges read in the obligation to complete, thereby changing the risk profile of the scheme. Unlike government, Phakalane Estates struck a bad deal. It is not for the courts to make it better for them at the expense of the purchasers, by importing terms that are not in the deed and allowing Phakalane Estates to challenge classification of buildings by GCC without applying for review.
