CCT93/14

[2015] ZACC 14

2015 (4) SA 491 (CC)

2015 (8) BCLR 925 (CC)

Mogoeng CJ Majority judgment

Cameron J and Froneman J separate judgment

10 November 2014

4 June 2015

http://hdl.handle.net/20.500.12144/3764

Application for leave to appeal against a judgment of the Port Elizabeth High Court: Sarrahwitz v Maritz N.O. (819/2012) [2014] ZAECPEHC 90 (25 February 2014). See also earlier judgment of the Grahamstown High Court: Sarrahwitz v Maritz NO (819/2012) [2013] ZAECGHC 10 (7 February 2013).

Alienation of Land Act 68 of 1981 — sections 21 and 22 — protection afforded to purchasers under instalment sale agreements Constitutional challenge — section 9(1) of the Constitution — right to equal protection and benefit of the law Section 26 of the Constitution — right of access to adequate housing — negative obligation — duty not to prevent or impair existing access to adequate housing. Application for leave to appeal against an order of the High Court, Eastern Cape Local Division, Port Elizabeth in a constitutional challenge to the differentiation between two categories of vulnerable purchasers of residential property from the estate of a seller who later becomes insolvent in sections 21 and 22 of the Alienation of Land Act 68 of 1981 (Land Act). Ms Sarrahwitz had paid off the entire purchase price of a house before the seller became insolvent, making transfer to her impossible under the insolvency legislation. The majority noted that the Land Act distinguished between two categories of the vulnerable purchasers of residential property. It entitles a purchaser who pays the purchase price in instalments, over a period of one year or longer, to demand transfer if the seller becomes insolvent. By contrast, a purchaser who pays the purchase price within a year (whether in instalments or once-off) is not entitled to the same protection. The majority found that the intention of the Land Act was to protect all vulnerable purchasers who were at risk of being homeless as a result of the seller’s intervening insolvency, regardless of method of payment. In accordance with the equality provisions of section 9(1) of the Constitution, purchasers who are equally vulnerable must enjoy the same legal endowments irrespective of their method of payment, unless differentiation is justifiable. There was no rational basis for protecting vulnerable instalment purchasers of residential properties who pay over one year or longer, while excluding equally vulnerable purchasers who pay the full purchase price at once or within a year. The legislative scheme of the Land Act (sections 21 and 22 in particular) was constitutionally invalid because it unjustifiably violated Ms Sarrahwitz’s rights of access to adequate housing, dignity and equality. The Court remedied the invalidity by reading in words to confer a right on a vulnerable purchaser to take transfer of residential property, for which the full purchase price was paid in one lump sum or in less than a year, in the event of the seller’s intervening insolvency. This right will only arise when the purchaser is likely to become homeless should the transfer not take place. The Court ordered the trustee to transfer the house to Ms Sarrahwitz. In a concurrence for different reasons, Cameron J and Froneman J agreed that Ms Sarrahwitz should be given transfer, but had reservations about the majority’s reliance on section 9(1). It was not difficult to find a rational purpose for the legislature’s differentiation between the two types of purchasers. One was that purchasers who managed to pay off the purchase price in one payment or within a year generally needed less protection than those who pay instalments over a year or longer. The concurrence also found that the majority judgment risks implying that any beneficial legislative distinction in extending consumer protections may be struck down as irrational if all are not equally protected. The Constitution does not protect against homelessness in absolute terms. It affords protection by providing that no one may be evicted from their home without an order of court made after considering all relevant circumstances. Hence a more appropriate and simpler remedy is sourced in the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998. This would be to refuse an order of eviction against Ms Sarrahwitz and to require the insolvency trustee to transfer the property to her. Majority: Mogoeng CJ (Moseneke DCJ, Khampepe J, Leeuw AJ, Madlanga J, Nkabinde J, Tshiqi AJ, Van der Westhuizen J and Zondo J concurring). Separate concurrence: Cameron J and Froneman J.