LEASING LAND FOR RENEWABLE
ENERGY PROJECTS
Avoiding the provisions of the Subdivision of Agricultural
Land Act 70 of 1970
by
Sean Dayton (DYTSEA001)
Submitted to The University Of Cape Town
in fulfilment of the requirements for the degree LLB
Faculty of Law, University of Cape Town
Date of submission: 20 September 2010
Supervisor: Professor Hanri Mostert
Mentor: Cheri Young
Department of Private Law, University of Cape Town
i
DECLARATION
1.
I know that plagiarism is wrong. Plagiarism is to use another’s work and
pretend that it is one’s own.
2.
I have used the footnoting convention for citation and referencing. Each
contribution to, and quotation in, this opinion from the work(s) of other people
has been attributed, and has been cited and referenced.
3.
This opinion is my own work.
4.
I have not allowed, and will not allow, anyone to copy my work with the
intention of passing it off as his or her own work.
Signature ______________________________
ii
LEASING LAND FOR RENEWABLE
ENERGY PROJECTS
Avoiding the provisions of the Subdivision of Agricultural
Land Act 70 of 1970
by
Sean Dayton (DYTSEA001)
Word Count: 8848 (including footnotes)
This paper was written under the auspices of the LandLawWatch project. The views
and opinions expressed here are the author's own and should not be attributed to the
LandLawWatch project or the University of Cape Town.
iii
‘Not infrequently, however (either to secure some advantage which otherwise the law
would not give, or to escape some disability which otherwise the law would impose),
the parties to a transaction endeavour to conceal its true character. They call it by a
name, or give it a shape, intended not to express but to disguise its true nature.’
(Innes J in Zandberg v Van Zyl 1910 AD 302 309)
iv
NOTE ON USE OF TERMS
This paper refers to certain phrases and terms which need explanation. The word developer in the
context of this research paper refers to the developer of a renewable energy project. The term can
represent either a male or a female developer, or a company undertaking the development of the
project.
The terms “SALA”, “Act 70 of 1970”, “the Act” and “the Subdivision Act” all refer to Subdivision of
Agricultural Land Act (70 of 1970).
Reference to “the Minister”, is to the Minister of Agriculture, Forestry and Fisheries, the current
equivalent of the Minister of Agriculture defined in the Act. The Department of Agriculture, Forestry and
Fisheries, can similarly be used interchangeably with the Department, or DAFF.
“IPP” is an abbreviation for independent power producer – a company bidding to the Department of
Energy in terms of the renewable energy procurement process.
Finally, the word farm, refers to agricultural land as defined in the Act.
v
ABSTRACT
In 2011 the Department of Energy published its long-awaited procurement document for South Africa’s
renewable industry sector. Now that the bidding process is under way, prospective independent power
producers have begun securing the land needed to construct and operate their energy projects. This
research paper examines different models available to renewable energy developers for securing land,
and highlights the following characteristics of such projects: that the land is typically agricultural; that
developers favour a long-term lease; and that often only a part of the land is required for carrying out the
project.
In this regard, the Subdivision of Agricultural Land Act 70 of 1970 adds a degree of complexity. The Act
prohibits the long-term lease of a portion of agricultural land. To circumvent this provision, there has
been a tendency for parties to structure their lease agreements such that a developer leases a whole
property on a long-term, with the farm owner retaining the rights to use the property for all residual
purposes (‘the LTLW model’). As the whole farm is being leased, and not a portion, this model would
seem to constitute a successful avoidance of the Act’s provisions. However, this paper demonstrates
that there is a risk that contracting parties might use the LTLW model while nevertheless intending the
lease to operate over only a part of the farm. In this scenario, the parties would be regarded as having
disguised their transaction, and the lease would be found to fall within the provisions of the Act. This
research paper examines the implications of such contravention, and concludes by offering possible
recommendations.
vi
TABLE OF CONTENTS
Note on use of terms .............................................................................................................................. v
Abstract .................................................................................................................................................. vi
1.
Introduction ..................................................................................................................................... 8
2.
Securing the land ............................................................................................................................ 9
3.
The Subdivision of Agricultural Land Act 70 of 1970 ................................................................ 11
3.1 .
The purpose of the Act ................................................................................................................ 12
3.2 .
Why SALA is problematic ............................................................................................................ 14
4.
The potential pitfall of the LTLW model ...................................................................................... 14
4.1 .
The risk of simulation .................................................................................................................. 15
4.2 .
The likelihood of proving simulation ............................................................................................ 18
4.3 .
Implications of infringement......................................................................................................... 20
5.
Conclusion..................................................................................................................................... 23
Bibliography .......................................................................................................................................... 25
vii
1. Introduction
In the wake of the 2008 energy crisis, estimated to have cost the country R50-billion in lost production,1
South African policy makers have finally put in place the framework for independent power producers
(IPPs) to begin investing in renewable energy generation.2 Over and above the Department of Energy’s
stringent selection criteria in assessing proposals from IPPs,3 a significant issue for investors is the
securing of land for the construction of these energy projects. Besides the difficulty of selecting sites with
the most sunlight (for solar projects) or the best wind (for wind farms), investors generally require access
to agricultural land for the duration of the project, which can often last between twenty and twenty-five
years. Invariably, developers wish to lease land for this purpose, rather than buy.4
The Subdivision of Agricultural Land Act5 (‘the Act’) is significant in this regard as it prohibits the leasing
of a portion of agricultural land for any period of 10 years or longer, without the Minister of Agriculture,
Forestry and Fisheries’ consent. Having to wait for Ministerial approval could unreasonably delay what
might already be a lengthy process. To avoid this, some renewable energy developers have tended to
structure their lease agreements in various ways to avoid the provisions of the Act.6
One of the contractual models being used involves the developer leasing the whole farm (rather than the
portions required) on a long-term, with the farm owner retaining the rights to use the farm for all residual
purposes.7 This model will hereinafter be referred to as the ‘LTLW model’ (‘long-term lease of the
whole’).
This paper seeks to investigate whether the LTLW model constitutes a contravention of the Subdivision
Act, and if so, what the implications of such contravention are. The research is relevant because the
possibility of infringement creates severe uncertainty for contracting parties. This could have serious
implications for investment in a promising renewable energy industry expected to put South Africa on the
path to meeting its environmental sustainability goals, help ease pressure on the national electricity grid
and lead to an injection in small local businesses.8 The aim of this paper is to add certainty to the matter.
K Modimoeng “Energy crisis dents growth” The Times (27 August 2008) 13.
A Makholwa “Renewable energy: pulling businesses” Finweek (15 September 2011) 21.
3 The criteria include potential job creation, BEE initiatives and technology transfer. See S
Njobeni “Department calls for private producers’ proposals” Business Day (2 August 2011) 2.
4 D Fÿfer and T Brewis “Securing land for renewable energy” (May 2011) Without Prejudice 51.
5 70 of 1970.
6 Fÿfer and Brewis (May 2011) Without Prejudice 51.
7 Fÿfer and Brewis (May 2011) Without Prejudice 51.
8 A Makholwa “Renewable energy: pulling businesses” Finweek (15 September 2011) 21.
1
2
8
There are a number of renewable forms of energy, but this research paper will focus on solar and wind
projects.9 The paper commences with an analysis of the requirements of a renewable energy developer
with regards to space needed and duration of the project. This will be followed by an interpretation of the
Subdivision Act, including its purpose and current status. The paper then analyses the conditions under
which the LTLW model might constitute a contravention of the Act. The consequences of such
contravention will then be discussed, with specific focus on contractual invalidity. Finally,
recommendations are offered to remedy the situation.
2. Securing the land
When a developer embarks on a renewable energy venture, available data will have to be analysed in
order to choose an appropriate region where sun and wind are abundant.10 Once this region has been
chosen, developers need to secure the land upon which to construct and operate their projects. This can
be done by buying or leasing. Invariably, the land will be agricultural land.11
In the context of agricultural land, buying has several disadvantages when compared to leasing. Firstly,
farmers often wish to bequeath their farms to the next generation and might be unwilling to sell.12 A
second consideration is that buying a farm entails tying up considerable capital, and the inconvenience
of having to sell the property at the end of the project. Finally, buying a farm involves taking over an
enterprise falling outside a renewable energy developer’s line of business. Leasing is therefore a more
typical option.13
Specific characteristics of renewable energy projects affect the way that a developer and a landowner
structure their lease agreement. First, the lifespan of an energy project will often be in the vicinity of
twenty to twenty five years.14 This means that developers require a long-term lease.15
Second, a developer is unlikely to need a whole farm to construct and operate his project.16 With regard
to wind power, this is as a result of the spacing between turbines, and the relatively small footprint of an
Solar and wind projects are expected to comprise the bulk of renewable energy production,
while other forms include small hydro, biomass, biogas and landfill gas. See A Makholwa
“Renewable energy: pulling businesses” Finweek (15 September 2011) 21; S Njobeni
“Department calls for private producers’ proposals” Business Day (2 August 2011) 2.
10 Fÿfer and Brewis (May 2011) Without Prejudice 51.
11 Fÿfer and Brewis (May 2011) Without Prejudice 51.
12 Fÿfer and Brewis (May 2011) Without Prejudice 51.
13 Fÿfer and Brewis (May 2011) Without Prejudice 51.
14 Southern African Alternative Energy Association “Land required for solar/wind farms” 2010
http://saaea.blogspot.com/2010/12/land-required-for-solarwind-farms.html
[accessed
on
09.07.2012];
RenewableUK
“Wind
energy
frequently
asked
questions”
http://www.bwea.com/ref/faq.html#space [accessed on 09.07.2012].
15 D Fÿfer and T Brewis ‘Securing land for renewable energy’ (May 2011) Without Prejudice 51.
A long-term lease is a lease of ten or more years, including renewal periods and options. See
Formalities in Respect of Leases of Land Act 18 of 1969.
9
9
individual tower.17 In the context of solar polar, solar panels are small, can be placed side-by-side in a
compact array, and arranged in such a way that they are constructed over non-arable or underutilised
parts of a farm. Solar installations can also be mounted off the ground allowing sheep and other small
livestock to graze under them.18
Because the developer requires only a portion (or portions) of the land, and as the farmer is able to
continue his farming operations on the remainder of the farm, it makes sense for the developer to lease
only the portions required. A lease involves the granting of rights to use and enjoyment of a property.19
This can be for a specific purpose, such as constructing and operating a renewable energy project. If a
farmer grants the developer rights to use and enjoyment over the whole farm to construct and operate
his project, then the developer would be entitled to exercise those rights by constructing and operating
the project anywhere on the property. This might be undesirable to a farmer from a certainty point of
view: If the farm owner did not maintain at least some enforceable right to determine what part of the
farm would be used, this could have adverse consequences for his agricultural activities.
From a certainty point of view, therefore, it can be argued that a farm owner would prefer to grant the
rights to use and enjoyment to the developer over only the specific portions the developer requires. In
other words, it would be preferable for the parties to enter into a long-term lease of a portion of the farm.
It is in this regard that the Subdivision of Agricultural Land Act20 adds a great deal of complexity.21
The Act prohibits a long-term lease of a portion of agricultural land, unless the Minister of Agriculture,
Forestry and Fisheries has consented in writing.22 Waiting for Ministerial consent under the Act could
take anything up to two years to obtain,23 which would unreasonably delay what might already be a
lengthy process. In this regard, Fÿfer and Brewis suggest that it is “current practice” for farm owners and
developers to structure their leases in the following two ways to avoid the implications of the Act:
Fÿfer and Brewis (May 2011) Without Prejudice 51..
A typical wind farm of 20 turbines might extend over an area of between one and two square
kilometres; however, a minimal amount of the land’s surface area is actually required for the
installations. Some sources estimate that as little as one per cent of a one square kilometre
property comprising 20 turbines would actually be taken up by the turbines, electrical
infrastructure and access roads – the rest can be used for other purposes, such as farming: See
RenewableUK
“Wind
energy
frequently
asked
questions”
http://www.bwea.com/ref/faq.html#space [accessed on 09.07.2012].
18 Hallmark Power Ltd. “Solar PV Panels” http://www.hallmarkpower.co.uk/solar-pv-panels/
[accessed on 09.07.2012].
19 WE Cooper Landlord and Tenant 2ed (1994) 2.
20 70 of 1970.
21 Fÿfer and Brewis (May 2011) Without Prejudice 51.
22 The Minister mentioned under the Act is the current equivalent of the Minister of Agriculture,
Forestry and Fisheries.
23 In the context of applications for consent for subdivision see Werksmans Attorneys “Ministerial
consent still required for subdivision of agricultural land” http://www.werksmans.co.za/keepinformed/in-the-news/media-releases/ministerial-consent-still-required-forsubdivision.html?Revision=en/3&Start=0 [accessed on 26.08.2012].
16
17
10
As a first option, the parties can enter into a lease for a period of less than ten years.24 This would be
coupled with a right to convert the lease into a long-term lease of a portion conditional upon the
Minister’s approval. The advantage of using this model is that because the lease is for less than ten
years, the provisions of the Act will not come into play (and Ministerial consent will not be required) for
the duration of the short-term lease. However, as the envisaged life span of such a project is typically
longer than ten years, at some stage consent will have to be obtained. This adds a great deal of risk: if
consent is denied, the lease will terminate at the end of the short term.
A second possibility is for the contracting parties to use the LTLW model, expressed by Fÿfer and Brewis
in the following terms: the developer leases the whole property on a long term, subject to the farm owner
retaining “the right to use the whole property for all residual purposes that have not specifically been
granted to the developer.”25 Fÿfer and Brewis assert that this model seems to be the most popular:26
because the developer is leasing the whole farm, Ministerial consent would not be required in terms of
the Act. However, the farm owner has to agree to the lease operating over the whole property for a long
period of time.27 As has been mentioned, a farm owner may be unwilling to relinquish control over where
installations are to be placed by granting the developer the rights to construct and operate the project
over the whole farm.
3. The Subdivision of Agricultural Land Act 70 of 1970
This chapter presents an analysis of the purpose of the Act and how this purpose is achieved. The paper
then shows why leasing land for renewable energy projects does not further the mischief the Act seeks
to prevent. SALA’s status is then examined, and further problems are highlighted, including the lengthy
weight for consent, and the fact that other oversight mechanisms exist with regard to bid proposals. It is
then emphasised that in light of these considerations, the Act can be argued to constitute an excessive
and unreasonable inconvenience in the context of renewable energy projects. It is in this context that the
LTLW model provides a tempting solution.
Fÿfer and Brewis (May 2011) Without Prejudice 51.
Fÿfer and Brewis (May 2011) Without Prejudice 51-52. A variant of this model exists whereby
the developer leases “the entire farm from the existing landowner [and] the landowner retains
the right to lease back the remaining land and continue farming it as in the past” - see
Sutherland Solar Energy Facility ‘Appendix E Public Participation: Comments and Responses
Report’
http://www.google.co.za/url?sa=t&rct=j&q=&esrc=s&source=web&cd=9&cad=rja&ved=0CGwQF
jAI&url=http%3A%2F%2Fwww.eeu.org.za%2Fthematic-areas%2Fenvironmental-managementand-sustainability%2Ffinal-sutherland-solarbar%2FAppendix%2520E_Comments%2520and%2520Responses%2520Report.pdf&ei=nmE6
UO2BJI27hAfAqoDgAQ&usg=AFQjCNFJJ7Xqr3kAqtOIJUfcxVpW65vGtA
[accessed
on
26.08.2012] 2. For the purposes of this research however, this paper will focus on the model
expressed by Fÿfer and Brewis.
26 Fÿfer and Brewis (May 2011) Without Prejudice 51.
27 Fÿfer and Brewis (May 2011) Without Prejudice 51.
24
25
11
3.1. The purpose of the Act
The principal purpose of Act 70 of 1970 is to prevent South Africa’s agricultural land from being
fragmented into uneconomic units.28 These are portions that have become so small that they are no
longer profitable.29 Uncontrolled fragmentation creates the possibility for prime agricultural land to be
split into units too small for the types of agricultural uses common in an area, to allow farmers sufficient
flexibility to anticipate changing markets, or to permit for necessary crop-rotation or land for pasture.30 To
prevent such uneconomic fragmentation, the Act prohibits subdivision of agricultural land (and other
activities that could effectively amount to subdivision) unless the Minister of Agriculture, Forestry and
Fisheries has consented in writing.31 The Act applies only to ‘agricultural land’.32 The requirement of
consent enables “the Department best suited” to determine, on the grounds of economic considerations,
whether fragmented units in a particular case would “survive in their diminished form and provide a
reasonable living for their owners”.33 Central oversight is therefore a key feature of the Act.
In the context of leasing land for renewable energy projects, section 3(d) of the Act is relevant. It
provides that:
“[N]o lease in respect of a portion of agricultural land of which the period is 10 years or longer, or is the natural
life of the lessee or any other person mentioned in the lease, or which is renewable from time to time at the
will of the lessee, either by the continuation of the original lease or by entering into a new lease, indefinitely or
for periods which together with the first period of the lease amount in all to not less than 10 years, shall be
entered into…unless the Minister has consented in writing.”
In determining whether a lease falls within the wording of the provision, renewal periods are taken into
account, as well as successive leases to the same lessee.34 Furthermore, the provision only refers to a
28 Van
der Bijl and Others v Louw and Another 1974 (2) SA 493 (C) 499D-E.
G Frantz Repealing the Subdivision of Agricultural Land Act: a constitutional analysis LLM
thesis Stellenbosch (2010) 16. The historical development of the Act is contained in two policy
documents: the 1964 and 1965 Reports of the Select Committees on Subdivision of Agricultural
Land. Republic of South Africa Select Committee on Subdivision of Agricultural Land Report SC
9-64 (1964) 1-88; Republic of South Africa Select Committee on Subdivision of Agricultural Land
Report SC 4-65 (1965) 1-51.
30 Ministry of Agriculture, Food and Rural Affairs “Guide to Lot Creation in Prime Agricultural
Areas”
http://www.omafra.gov.on.ca/english/landuse/facts/lot_draft.htm
[accessed
on
11.07.2012].
31 Baker J in Van der Bijl and Others v Louw and Another 1974 (2) SA 493 (C) 499D-E stated
that the Act represented a “drastic curtailment of previous common-law rights of land owners in
a certain category to carve their properties into units as small as they choose”. Nevertheless, he
considered the Act “indisputably one of the wisest pieces of legislation on the statute book.”
32 Defined in s 1 in terms of exceptions: agricultural land is any land except for that excluded by
the provisions of s 1(a)-(f). For an interesting examination of the effect of post-Apartheid
legislation on the status of ‘agricultural land’ see generally Kotzé en ‘n Ander v Minister van
Landbou en Andere 2003 (1) SA 445 (T); Stalwo (Pty) Ltd v Wary Holdings (Pty) Ltd and
Another 2008 (1) SA 654 (SCA); Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd and Others 2008
(11) BCLR 1123 (CC).
33 Van der Bijl and Others v Louw and Another 1974 (2) SA 493 (C) 499-500.
34 This means that contracting parties would not escape the provisions of s 3(d) by concluding a
lease for nine years and eleven months, with an option to enter into a new lease at the end of
29
12
long-term lease of a portion of agricultural land, the word likely to mean simply a part of a farm,
considered in terms of its surface area.35 Thus if a lessor and a lessee were to lease a part of a farm, this
would fall within the provisions of the Act. If leasing the whole farm, on the other hand, contracting
parties would escape the provisions of the Act.
A developer leases a whole farm if he has the right to use and enjoy the whole farm (in this context, for
the purposes of constructing and operating his project).36 If, however, in terms of the lease agreement a
developer only has the right to use part (or certain parts) of the farm, and may not use others, then a
portion is being leased. At this point, bearing in mind what has been said about the nature of renewable
energy projects and the purpose of the Act, some might argue that leasing a portion in the specific
context of these projects is not an infringement the Act: The purpose of SALA is to prevent prime
agricultural land from being split up into unprofitable units; if a developer only requires a portion of the
land, then the farmer is able to continue his agricultural activities, making the farm more profitable.37
However this interpretation fails to consider a key feature of the Act, that of central oversight. Courts
have already described the requirement of consent as allowing “the Department best suited” to
determine, on the grounds of economic considerations, whether fragmented units in a particular case
would lead to an unprofitable unit.38 If a lease is found to operate over a portion of agricultural land,
therefore, then it falls within the plain, ordinary meaning of section 3(d), and it should then be up to the
Minister to decide whether or not this has the potential to affect the profitability of the unit.39 For this
reason, leasing a portion is a contravention, plain and simple, unless the Minister’s consent has been
obtained in writing.
the extant one. See generally Letaba Sawmills (Edms) Bpk v Majovi (Edms) Bpk 1993 (1) SA
768 (A).
35 The word is neither defined in the Act, nor does there seem to be any reported case law
offering such a definition.35 While Claassen’s Dictionary of Legal Words and Phrases does not
offer a definition of the word, Stroud’s Judicial Dictionary of Words and Phrases 1989 states that
“the word ‘portion’ is ambiguous. It may only mean – and frequently means – a part of some
larger amount”; “Portion of the district” is described as including “part of the surface area”. The
provision makes no reference to the plural form (portions). See RD Claassen Dictionary of Legal
Words and Phrases 2ed Volume 3 J-P (1997) 166; D Greenberg and A Millbrook Stroud’s
Judicial Dictionary of Words and Phrases 6ed Volume 2: G-P (2000) 1989.
36 WE Cooper Landlord and Tenant 2ed (1994) 2.
37 As has been mentioned, in the context of a wind farm, some sources estimate as little as one
per cent of a one square kilometre property comprising 20 turbines would be required for the
turbines, electrical infrastructure and access roads – the rest can be used for other purposes,
such as farming: See RenewableUK “Wind energy frequently asked questions”
http://www.bwea.com/ref/faq.html#space [accessed on 09.07.2012]; BTE Wind “Harvesting the
Wind’
http://www.biothermenergy.com/uploads/articles/0017%20BTE%20Wind%20Article%2012.pdf
[accessed on 09.07.2012].
38 Van der Bijl and Others v Louw and Another 1974 (2) SA 493 (C) 499-500.
39 As expressed by Innes CJ in Dadoo Ltd and others v Krugersdorp Municipal Council 1920 AD
530 543: “A Judge has authority to interpret, but not to legislate, and he cannot do violence to
the language of the lawgiver by placing upon it a meaning of which it is not reasonably capable,
in order to give effect to what he may think to be the policy or object of the particular measure.”
13
3.2. Why SALA is problematic
The Act is problematic in the context of renewable energy projects for a number of reasons. Firstly, as
mentioned, leasing a portion of a farm does not seem to further the mischief the Act seeks to prevent.
Second, the wait for consent can be excessively long40 and other oversight mechanisms already exist
with regard to land use in this country.41 Third, the Subdivision Act is an anachronistic piece of legislation
and has already been repealed, but curiously remains in effect. The Subdivision of Agricultural Land Act
Repeal Act42 (‘Repeal Act’) was enacted by Parliament in 1998. However, despite its promulgation over
a decade ago, the President has yet to sign the Repeal Act into operation43 (the likely cause of the delay
is that nothing has been enacted in the interim to fill the void created by the Act’s repeal).44 These
considerations mean that in the context of leasing a portion of agricultural land, many would consider the
Act to constitute an excessive and unreasonable inconvenience in the context of securing land for
renewable energy projects.
In light of the above, the LTLW model seems a convenient solution: if parties can simply express their
agreement as a lease of the whole farm, they can thereby avoid the implications of the Act altogether. It
is in this regard that this paper highlights a potential risk associated with the LTLW model.
4. The potential pitfall of the LTLW model
It is likely that because of the time it takes to obtain the Minister’s consent, it is tempting for parties to
avoid the provisions of the Act altogether by leasing the whole farm. At this point the research paper
highlights a potential problem with the LTLW model. This chapter seeks to show that in light of the rule
against disguised transactions, there is a difference between parties purporting to enter into a lease of
the whole farm and actually doing so. This chapter demonstrates that there is a risk of parties professing
to lease a whole farm in the written lease contract while nevertheless intending for the lease to operate
Research indicates that consent for subdivision can take up to 2 years. See Werksmans
Attorneys “Ministerial consent still required for subdivision of agricultural land”
http://www.werksmans.co.za/keep-informed/in-the-news/media-releases/ministerial-consent-stillrequired-for-subdivision.html?Revision=en/3&Start=0 [accessed on 26.08.2012].
41 The Subdivision of Agricultural Land Act Repeal Bill [B101-97] (‘the Repeal Bill’) mentions the
Development Facilitation Act 67 of 1995, the Conservation of Agricultural Resources Act 43 of
1983 and other local government bylaws. Furthermore provincial legislation regulating land use
such as the Land Use Planning Ordinance 15 of 1985 (‘LUPO’) in the Western Cape further
serves the purpose of the Subdivision Act.
42 Subdivision of Agricultural Land Act Repeal Act 64 of 1998.
43 The Repeal Bill outlines the policy reasons for SALA’s repeal: while the original aim of the
legislation was to prevent the fragmentation of land into non-viable units, it is no longer seen as
appropriate for the State to interfere in the regulation of the size of agricultural land. Rather, free
market considerations should determine the size of units, while adequate governmental
regulations, already in place, are sufficient to control the use of such land. See G Frantz
Repealing the Subdivision of Agricultural Land Act: a constitutional analysis LLM thesis
Stellenbosch (2010) 67.
44 Kotzé en ‘n Ander v Minister van Landbou en Andere 2003 (1) SA 445 (T) 450C-J.
40
14
over only a portion. The chapter then discusses how one would ascertain such a disguised intention, and
will then examine the implications.
4.1. The risk of simulation
In the South African law of contract it is a principle that courts give effect to the substance over the form
of a transaction.45 This is often referred to as the rule against disguised (or simulated) transactions, and
is encapsulated in the maxim plus valeat quod agitur quam quod simulate concipitur.46 This rule operates
to prevent parties from disguising their transactions as something else to secure some advantage they
would otherwise be unable to obtain, or to escape some legal impediment.47 This means that in
determining rights under a contract a court will give effect “to what the transaction really is; not what in
form it purports to be”.48 A simulated transaction is:
“a dishonest transaction: dishonest, in as much as the parties to it do not really intend it to have, inter partes,
the legal effect which its terms convey to the outside world. The purpose of the disguise is to deceive by
concealing what is the real agreement or transaction between the parties.”49
This should make it clear that the issue of whether a transaction is disguised turns on the intention of the
parties. A court will give effect to what the parties really intended even if that differs from what was
embodied in the written contract. The question to be asked is whether the parties intended the contract
to have effect according to its tenor.50 In determining whether the written form of a contract is different
from its real nature, a court must consider all the circumstances.51 No general rules can be laid out, and
each case will depend on its own facts.52
In the context of renewable energy developments, when parties use the LTLW model, they are
expressing their agreement as a lease of a whole farm. This is the potential pitfall of the LTLW model:
there is a risk of parties using the LTLW model for the sake of convenience (to avoid the implications of
the Subdivision Act) while nevertheless intending for the lease to operate over only a portion (or
portions). This is problematic: if the LTLW model was ever challenged, and a court found that a
developer and farm owner using this model had really intended the lease to operate over only a portion
Erf 3183/1 Ladysmith (Pty) Ltd and Another v CIR 1996 (3) SA 942; Dadoo Ltd and Others v
Krugersdorp Municipal Council 1920 AD 530; Kilburn v Estate Kilburn 1931 AD 501 507.
46 Translated by Van Zyl J as “greater value is attached to what is done than to what appears to
be done”; BC Plant Hire CC t/a BC Carriers v Grenco (SA) (Pty) Ltd [2004] 1 All SA 612 (C) para
33. The maxim is also referred to as the plus valeat or plus valet rule and the term disguised
transaction is also synonymous with simulation or sham transaction.
47 Zandberg v Van Zyl 1910 AD 302 309.
48 309 (emphasis added).
49 Commissioner of Customs and Excise v Randles, Brothers & Hudson Ltd 1941 AD 369 395396.
50 RH Christie and GB Bradfield Christie’s The Law of Contract in South Africa 6ed (2011) 203.
For the purposes of this research the question can be asked: does the developer have
enforceable rights to construct and operate his project over the whole farm?
51 Zandberg v Van Zyl 1910 AD 302 310.
52 Zandberg v Van Zyl 1910 AD 302 311.
45
15
of the land, it would find the agreement to fall within the ambit of section 3(d), requiring the Minister’s
consent. Without such consent the agreement would constitute a contravention of the Act. 53 This can
have dramatic implications.54
This being said, it is appropriate to consider the likelihood of the LTLW model being challenged in court.
Who would bring such a challenge? There are a number of interested persons and entities involved in
renewable energy projects, most notably, the Departments of Energy and Agriculture, Forestry and
Fisheries, the developer and the landowner. There are many policy considerations making it unlikely that
the Department of Energy or the Department of Agriculture, Forestry and Fisheries, would challenge the
model.55
Instead, as Frantz points out, the majority of the cases dealing with the Subdivision Act involve
contractual disputes, where one of the contracting parties wishes to escape performance.56 Failure to
comply with the Act by obtaining the Minister’s consent is then used as an exit strategy. As the LTLW
model involves the developer and the farm owner both making use of the same farm, it is possible that
during the currency of the lease the relationship between the parties may deteriorate.57 A farm owner
may decide that he no longer wishes to have the project on his farm,58 or have realised that another
developer may offer him a superior rental figure to that currently being paid by the existing lessee.59 For
the purposes of this paper it will be assumed that the farm owner would be the party most likely to
challenge to agreement.60
An agreement which is “designedly disguised so as to escape the provisions of the law, but
falls in truth within these provisions” is said to be in fraudum legis. See Dadoo Ltd and Others v
Krugersdorp Municipal Council 1920 AD 530 547.
54 As is discussed at page 21.
55 The importance of the renewable industry to South Africa’s economy, and the fact that the
LTLW model enables the farmer to continue his farming operations, have been discussed.
56 G Frantz Repealing the Subdivision of Agricultural Land Act: a constitutional analysis LLM
thesis Stellenbosch (2010). See generally Smith v Tuckers Land and Development Corporation
(Pty) Ltd; Tuckers Land and Development Corporation (Pty) Ltd v Smith
[1984] 3 All SA 146 (T);
Letaba Sawmills (Edms) Bpk v Majovi (Edms) Bpk 1993 (1) SA 768; Geue and Another v
Notling and Others
[2003] 4 All SA 553 (SCA).
57 As Mostert aptly puts: “disputes between neighbours often have their cause in incompatible
personality traits or temperaments. Wealth, envy or boredom may fuel grievances”. H Mostert
“Nuisance" in Visser D and Reid E Private Law and Human Rights in South Africa and Scotland
forthcoming (2013) 4.
58 Perhaps due to the excessive noise generated by the wind turbines on his property: A Muir
‘Need to consider natural assets before siting noisy wind farms’ The Herald (6 April 2010) 6.
59 These reasons are merely speculative.
60 Of course, the developer, having invested so much time and expenditure, could be regarded
as having the most to lose from the invalidity of the lease. However, there are circumstances
where it might be in his interests to challenge the lease. For instance if during the currency of
the lease it is apparent that the power generated from the wind or sunlight is sufficiently less
than anticipated, in view of the ongoing rental commitments an invalid lease might constitute an
effective escape plan for a developer facing an unprofitable venture.
53
16
What then is a court to look for in a case where the farm owner has alleged simulation? In Erf 3183/1
Ladysmith (Pty) Ltd and another v CIR61 the court found that the transaction in that case had been
disguised by identifying an “unexpressed agreement or tacit understanding” that operated beyond the
four walls of the written contract of lease.62 This unexpressed agreement was found to have given the
appellants an enforceable right to have a factory constructed on their property, a fact which had not been
apparent from the express terms of the written agreements.
In the same way, an agreement structured in terms of the LTLW model would be regarded as a
simulation if the parties had tacitly or verbally (remaining unexpressed in the written contract of lease)
agreed that the developer only had the right to construct and operate his project over certain parts of the
farm and not others. This could take the form of an assurance by the developer that he would not
exercise these rights unilaterally, but would only do so after consultation with, and consent by, the farm
owner.63 If (in terms of this unexpressed agreement)64 the developer only has enforceable rights over
part of the farm, he can no longer be said to be leasing the whole farm, despite what has been
expressed in the written agreement.65
1996 (3) SA 942.
Erf 3183/1 Ladysmith (Pty) Ltd and Another v CIR 1996 (3) SA 942 954. In this case the
appellants appealed a decision by the Income Tax Special Court upholding assessments issued
by the Commissioner for Inland Revenue concerning income allegedly omitted from the
appellants' returns. The appellants had reflected as their only income rent earned from the lease
of two stands, upon which a factory had been constructed. The terms of the lease agreement
entitled (but did not oblige) the lessees to construct improvements on the stands. However, after
examining the evidence, the court came to the conclusion that there had existed an
unexpressed agreement from the start that a factory would be built.
63 As discussed at page 10 a farm owner might require such an assurance in order to have
certainty with regard to his farming operations.
64 Or rather unwritten agreement.
65 The effect of the inclusion of a non-variation clause in the written contract on this state of
affairs is beyond the scope of this research paper.
61
62
17
4.2. The likelihood of proving simulation
A court will not easily come to a finding of simulation.66 A farm owner, bringing a challenge, would need
to prove the existence of an intention different to that expressed in the written agreement (which exists
as strong evidence to the contrary). An enquiry into what was going on in the minds of the parties when
they agreed to the terms of the lease will necessarily be a difficult exercise, and a court will have to
resort to factors external to the written contract. It is important to bear in mind that the fact that a contract
has been structured in an unusual way, or the fact that there was an easier or more direct way of
achieving the same results, is not in itself sufficient to prove simulation.67 Furthermore, a transaction is
also not disguised simply because it was designed to avoid the provisions of a statute.68
Nevertheless, the following are suggested arguments a farm owner would use to persuade a court that
the parties have simulated their intention:69 First, the farm owner might demonstrate that the developer
never required the whole farm from the outset, and that since taking occupation has not used the whole
farm. This suggests that only a portion is being leased.70
Second, (and related to this) the farm owner could demonstrate that the parties knew from the outset
where the installations were to be constructed (by adducing diagrams or related plans). A court could
interpret this as an indication that from the start, the parties only intended that the developer would use
and enjoy certain parts of the farm.
Yet another factor is the amount of rent being paid. In Matchless Investments v Bredeveldt,71 the rental
amount was relevant to the determination of the parties’ real intention. A court would therefore likely
consider whether the rent paid is lower than a farmer would reasonably be expected to demand
considering the developer has enforceable rights to construct his operate his project over the entire farm.
Zandberg v Van Zyl 1910 AD 302 309. This is especially pertinent considering the principle in
South African law that contracting parties may arrange their affairs so as to remain outside the
provisions of a statute; See Dadoo Ltd and Others v Krugersdorp Municipal Council 1920 AD
530 at 548; Erf 3183/1 Ladysmith (Pty) Ltd and Another v CIR [1997] JOL 213 16.
67 NL Joubert “Asset-based financing, contracts of purchase and sale, and simulated
transactions” (1992) 109 SALJ 707 710.
68 Commissioner of Customs and Excise v Randles, Brothers & Hudson Ltd 1941 AD 369 395396.
69 In offering this discussion this paper is not articulating established law, but merely presenting
an argument which a farm owner would use if challenging the lease.
70 However, this cannot on its own constitute proof of simulation: there may be reasons of
convenience for intending to lease the whole property when in fact only some of the surface
area is actually required. Consider a wind farm development: it might be practically inconvenient
to register long-term leases over each small portion taken up by a wind turbine.
71 1974 (2) SA 685 (C). In this case the court relied on the low “rent” paid by a “lessee” in
holding that a purported lease under which the “lessee” occupied a shop was not a lease but a
service contract.
66
18
The farm owner could also try to persuade the court that he never intended the lease to operate over the
whole farm because it would have been unreasonable (and potentially disruptive) to permit the
developer to construct and operate his project anywhere on the farm without allowing the farmer some
right to determine where installations were to be placed.72
Finally, the farm owner would no doubt adduce evidence of the lengthy period parties are being made to
wait to obtain the Minister’s consent. This would be used to argue that the LTLW model had been used
merely for convenience (to avoid the implications of the Act) and not because the parties had genuinely
intended the lease to operate over the whole farm.
In this regard there is a problem in the way courts have tended to approach cases where there has been
an allegation of a sham transaction. As has been mentioned, the fact that a contract has been structured
in an unusual way, or the fact that there was an easier or more direct way of achieving the same result,
does not mean that a transaction is a sham.73 Furthermore, the fact that an agreement has been
designed in an unusual way because the parties wished to avoid the provisions of a statute does not
necessarily mean that the parties have disguised their intention.74 It is perfectly legitimate for parties to
avoid a statute by “deliberately keeping outside of its provisions and by doing something which effects
their purpose equally well, but without bringing themselves within the scope of the law”. 75 What this
means is that it is perfectly legitimate to keep outside the provisions of section 3(d) by leasing the whole
farm. What is not legitimate is to purport to lease the whole farm when parties are in fact leasing a
portion.
Yet, where a contract has been designed in an atypical way76 (especially where the purpose of this is to
deliberately keep outside the provisions of a statute) courts sometimes require very little additional
evidence to determine that such a transaction is a sham.77 Joubert points out that the “suspicion of
simulation is often increased” in cases where a transaction is structured in a particular way for the
Refer to the discussion at page 10.
NL Joubert “Asset-based financing, contracts of purchase and sale, and simulated
transactions” (1992) 109 SALJ 707 710.
74 Commissioner of Customs and Excise v Randles, Brothers & Hudson Ltd 1941 AD 369 395396.
75 Dadoo Ltd and Others v Krugersdorp Municipal Council 1920 AD 530;
76 The LTLW model might certainly be regarded as an atypical arrangement: the lessee takes
occupation of the whole property while the lessor remains in occupation of the same property.
Furthermore, the effect of the model on the rights and obligations might be regarded as unusual
in respect of a lease in that the lessor is not simply granting use rights but retaining rights (to
use for “residual purposes”).
77 Joubert (1992) 109 SALJ 707 710. See in this regard Marsh v Van Vliet’s Collection Agency
1945 TBD 24; Bird v Lawclaims (Pty) Ltd 1976 (4) SA 726 (D); Skjelbreds Rederi A/S Hartless
(Pty) Ltd 1982 (2) SA 710 (A); Hippo Quarries (Tvl) (Pty) Ltd v Eardley 1992 (1) SA 867 (A);
CSARS v NWK [2010] ZASCA 168.
72
73
19
purpose of avoiding certain statutory provisions.78 As such, there is a “very real danger”79 that an
agreement, genuinely falling outside the provisions of a statute, may nevertheless be regarded as a
simulation.80
The upshot is that a farm owner could make a strong argument to prove that him and the developer have
in fact simulated their intention (and that they had intended the lease to operate over a portion).
Moreover, even where they genuinely intended that the developer was to have enforceable rights over
the whole farm, there is a danger that a court might nevertheless regard the parties to have simulated
their intention.
4.3. Implications of infringement
There is a tangible risk that a lease between a farm owner and renewable energy developer could be
challenged and found to infringe section 3(d) of SALA. This section explores the implications of such a
challenge on the contract, the parties and the industry. Firstly, contravention of section 3(d) of the Act
carries with it statutory liability provided in section 11 of the Act. Section 11(cA) provides for either a fine
or imprisonment (for a period under two years) if found to have contravened section 3(d).81
Secondly, statutory infringement has implications for the validity of the lease agreement. A lease, like
any other contract, must be legal; it must not be prohibited by statute.82 In Letaba Sawmills (Edms) Bpk v
NL Joubert “Asset-based financing, contracts of purchase and sale, and simulated
transactions” (1992) 109 SALJ 707 708. This trend is evident in the dictum of Lewis JA in
CSARS v NWK [2010] ZASCA 168 para 55: “If the purpose of the transaction is only to achieve
an object that allows the evasion of tax, or of a peremptory law, then it will be regarded as
simulated.
79 Joubert (1992) 109 SALJ 707 710.
80 Joubert (1992) 109 SALJ 707 710.
81 S 11(cA) provides that “any person who contravenes the provisions of s 3(d) with regard to the
entering into of a lease contemplated therein…shall be guilty of an offence and on conviction
liable to a fine not exceeding R1 000 or to imprisonment for a period not exceeding 2 years.”
82 WE Cooper Landlord and Tenant 2ed (1994) 10-11; T Floyd ‘Legality’ in Hutchison et al The
Law of Contract in South Africa (2009) 173.
78
20
Majovi (Edms) Bpk83 an agreement in contravention of section 3(d) was held to be void84 and
unenforceable.85
The most serious implication of a declaration of invalidity is the potential that the developer may be
evicted. Once the lease has been held to be invalid, there is no longer any contractual basis for him to
continue occupation. Where there has been performance under a void contract, restitution of this
performance will in principle be granted.86 In the case of a void contract of lease, therefore, the farm
owner would be able to claim the return of his property.87
The financial implications of this are not difficult to imagine. A developer’s eviction early in the currency
of the lease might bring the project to a halt before the venture has broken even. This may even result in
the developer facing insolvency. Recouping money invested in any facilities which have acceded to the
land would require effort and cost.88 Furthermore, investors, facing a loss, might withdraw from the
sector.
In this context, it is therefore important to note two arguments which, if pleaded, may protect a developer
faced with eviction proceedings: The first argument involves the Roman maxim in pari delicto potior est
conditio defendentis seu possidentis.89 The par delictum rule limits the right of a party to an illegal or
immoral contract to avoid the consequences of his performance under that agreement.90 In Jajbhay v
Cassim,91 the rule was invoked to prevent a lessor from successfully claiming the eviction of a sublessee under an illegal lease. Where two parties are equally morally guilty, the par delictum rule may
prevent restitution from taking place, as “a court will not assist those who approach it with ‘unclean
1993 (1) SA 768.
The court relied on the reasoning of the Transvaal Provincial Division in Tuckers Land and
Development Corporation (Pty) Ltd v Wasserman 1984 (2) SA 157 (T) 151G-156A. This case
dealt with the effect on the contract of a contravention of section 3(e) (which prohibited the rights
to a portion of agricultural land to be sold or leased on a long-term). Applying the principles set
out in Swart v Smuts 1971 (1) SA 819 (A) the court in Tuckers’ case proceeded by stating that
the validity of the contract depended on the intention of the legislature, and that the general rule
in cases of contractual contravention of a statutory rule was nullity of the contract. This rule was,
however, not inflexible. Three indicia could be identified: these were the use of the word shall in
“no right to such portion shall be sold or granted” in section 3(e), the fact that the provision was
expressed in negative terms, and the inclusion of a statutory offence in cases of contravention.
85 Based on the maxim ex turpi causa non oritur actio, neither party can bring an action based
on an illegal contract. As an example of the application of this principle, when a lease is illegal a
court will refuse to enforce a claim for rent. See WE Cooper Landlord and Tenant 2ed (1994) 14;
T Floyd ‘Legality’ in Hutchison et al The Law of Contract in South Africa (2009) 187.
86 T Floyd ‘Legality’ in Hutchison et al The Law of Contract in South Africa (2009) 188.
87 Floyd ‘Legality’ in The Law of Contract (2009) 188.
88 It is uncertain what proportion of the capital expenditure invested in the project could be
recouped through the sale of dismantled turbines, solar panels and electrical components. As
these components would have aged since installation, their resale value may be considerably
lower than their initial purchase cost.
89 Also known as the par delictum rule.
90 Jajbhay v Cassim 1939 AD 537 541-452.
91 1939 AD 537.
83
84
21
hands’”.92 A developer might argue that if the claim for eviction were granted, the farm owner, whose
conduct in entering into the agreement would be equally reprehensible, would suffer no consequences
for his part in the statutory contravention, whereas the developer would be unduly prejudiced.93 In
Jajbhay, Stratford J proposed that a court should approach such a matter by asking “whether public
policy was best served by granting or refusing the plaintiff”.94 A developer could then lead evidence
showing that public policy would better be served by allowing the energy project to continue for the full
duration of the impugned lease.
The second issue the developer could raise in defence of an eviction claim is that of the enrichment lien.
Such a lien arises where a person has spent money on another’s property without a legal obligation to
do so.95 It entitles the lien holder to retain possession until compensated for the expenditure incurred. 96
An improvement lien, a specific form of enrichment lien, is one associated with incurring useful
expenses, or those which increase the market value of the property, and which are considered useful by
the economic and social views of the community.97 The developer could therefore argue that he has
incurred such useful expenditure through the construction of access roads, and the construction of
installations, which have increased the market value of the farm.98
While there is a risk that a farm owner could successfully challenge the lease as an infringement of
section 3(d) of SALA, the developer (or his successor) may nevertheless be able to ward off a claim for
eviction based on the par delictum rule, or through the protection afforded by an enrichment lien.
Nevertheless, a full analysis of these defences are beyond the scope of this paper, and whether or not a
developer could successfully argue these points remains uncertain.99 For this reason, there is still the
T Floyd “Legality” in Hutchison et al The Law of Contract in South Africa (2009) 188.
Citing the harsh financial consequences mentioned above.
94 Jajbhay v Cassim 1939 AD 537 543.
95 Mostert et al The Principles of the Law of Property in South Africa (2010) 330.
96 Mostert et al Principles (2010) 330 329.
97 Mostert et al Principles (2010) 330 329.
98 TJ Scott “Lien” in WA Joubert LAWSA 15(2) 2 ed (2008) para 61. Special legislation (known
as the Placaeten), enacted by the Dutch Republic, took away the lessee’s right to the
improvement lien in the case of rural tenements, obliging the lessee of rural land to vacate the
property on expiry of the contract with no right to enforce payment for useful expenditure.
However, Scott “Lien” in LAWSA 15(2) 2 ed para 61 is authority for the view that in the case of a
void contract of lease, the Placaeten do not apply, and a lessee of rural land “must technically
be regarded as a bona fide occupier…afforded the same rights as a bona fide possessor”. Such
a bona fide possessor is afforded the protection of the enrichment lien.
99 For instance, with regard to the par delictum rule, the rule may be relaxed if it would better
serve public policy. It might be difficult for the developer to convince the court that public policy
would better be served by allowing the energy project to continue: The economic benefits of
renewable energy projects could certainly be shown, and it could be highlighted that the
developer’s occupation of the farm has not defeated the purpose of SALA. Nevertheless, the
farm owner could counter by arguing that dismissing his eviction claim would undermine section
3(d) as it would serve to indirectly enforce the illegal contract. For an interesting analysis of the
difficulties created by the Jajbhay judgment see WE Cooper Landlord and Tenant 2ed (1994)
15.
92
93
22
serious risk that the farm owner could successfully challenge the lease agreement, and thereby succeed
in a claim for eviction.
5. Conclusion
This paper has demonstrated the risk involved in structuring a lease agreement using the LTLW model.
It has been shown that the purpose of arranging a lease in this way is invariably to avoid the provisions
of an Act, repealed yet still in operation, which exists as an unreasonable hindrance in the context of
renewable energy developments. Many would be sympathetic to the parties’ desire to avoid an
excessive delay by using the LTLW model. Nevertheless, despite good intentions, by using the model
parties have opened themselves up to the risk of serious financial consequences.
The inability to predict whether a lease agreement is secure has implications for a burgeoning industry
predicted to create employment, ease the strain on the national energy grid, and bring foreign direct
investment to the country. In conclusion, it is therefore necessary to offer some recommendations
regarding how this state of affairs can be avoided: firstly, it is recommended that SALA not be repealed
before legislation has been enacted to fill the void created by the Act’s repeal. 100 Central oversight of
fragmentation of agricultural land is still seen as desirable, despite the policy reasons outlined in the
Repeal Bill.101
The second recommendation is directed at contracting parties and their advising attorneys: parties
should avoid the LTLW model altogether. A developer should lease the portions required and obtain the
necessary consent. While this option also involves some deal of uncertainty (whether consent will be
given), the importance of renewable energy projects to the South Africa’s economy and renders it
unlikely that consent would be denied. Furthermore, the uncertainty regarding whether consent will be
granted is temporary, existing before the inception of the project. In comparison, the uncertainty whether
a lease using the LTLW might be challenged is one which subsists throughout the currency of the
project, and mitigating this risk by obtaining consent is therefore preferable.
The final, and perhaps most important, recommendation is directed at the State, and focuses on the time
taken to obtain the Minister’s consent. Clearly the reason why parties would use the LTLW model is
because of the unreasonable delay in obtaining consent, caused by incapacity and a skills shortage on
As highlighted by Baker J in Van der Bijl and Others v Louw and Another 1974 (2) SA 493
(C) 499-500. A comparative study of land management policies in Oregon and Hawaii in G
Frantz Repealing the Subdivision of Agricultural Land Act: a constitutional analysis LLM thesis
Stellenbosch (2010) shows relatively successful management of subdivision of agricultural land
in Oregon, while legal loopholes in Hawaii’s laws have created problems. This illustrates the
importance of central oversight.
101 The Subdivision of Agricultural Land Act Repeal Bill [B101-97].
100
23
the part of the Department.102 In light of the economic importance of renewable projects, it is therefore
strongly recommended that the State direct attention at improving the capability of the Department in
processing consent applications. Renewable energy developers already face a myriad of obstacles
simply to have their bid approved.103 It is therefore unfortunate that over and above these, developers
face a capacity problem that creates legal uncertainty and places investment in the renewable energy
sector at risk. For this reason, the sooner the State can improve capacity in the DAFF, the sooner the
problem can be remedied, paving the way for much-needed legal certainty in South Africa’s fledgling
renewable energy industry.
See generally P Mashala “DAFF underspends by R100 million while farmers wait for fences”
Farmers Weekly (18 November 2011) 24; S Nyathi “Farmers ready for planting – but no tractors
available” Star (3 October 2011) 6; S Miti “No money to pay 3 000 Magwa Tea staff” Daily
Dispatch (24 October 2007) 11; M Gosling “Black farmers in crisis: Government failing to back
its own growers” Cape Times (22 Feb 2011) 5.
103 The Department of Energy’s Request for Proposals lists the following consents that need to
be obtained in order to be considered in the bidding process: heritage, environmental, rezoning
and alterations of land use control rules, biodiversity consents, other agricultural consents,
aviation approval, miscellaneous local authority consents and building plan approval.
Department of Energy “Regulations for the evaluation and review of applications pertaining to
wind farming on agricultural land” Sch 11 Vol 1 Part 1 Request for Proposals (2011).
102
24
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Primary sources
Cases
BC Plant Hire CC t/a BC Carriers v Grenco (SA) (Pty) Ltd [2004] 1 All SA 612 (C).
Bird v Lawclaims (Pty) Ltd 1976 (4) SA 726 (D).
Business Aviation Corporation (Pty) Ltd and Another v Rand Airport Holdings (Pty) Ltd 2006 (6) SA 605
(SCA).
Commissioner of Customs and Excise v Randles, Brothers & Hudson Ltd 1941 AD 369.
Dadoo Ltd and Others v Krugersdorp Municipal Council 1920 AD 530.
Erf 3183/1 Ladysmith (Pty) Ltd and Another v CIR [1997] JOL 213 (A).
Geue and Another v Notling and Others
[2003] 4 All SA 553 (SCA).
Gien and Another NNO v Gien and Another
[1984] 4 All SA 116 (T).
Hippo Quarries (Tvl) (Pty) Ltd v Eardley 1992 (1) SA 867 (A).
Jajbhay v Cassim 1939 AD 537.
Kilburn v Estate Kilburn 1931 AD 501.
Kotzé en ‘n Ander v Minister van Landbou en Andere 2003 (1) SA 445 (T).
Legator McKenna Inc and Another v Shea and Others 2010 (1) SA 35 (SCA).
Letaba Sawmills (Edms) Bpk v Majovi (Edms) Bpk 1993 (1) SA 768.
Matchless Investments v Bredeveldt 1974 (2) SA 685 (C).
Marsh v Van Vliet’s Collection Agency 1945 TBD 24.
McLachlin v Wienand 1913 TPD 191.
Smith v Tuckers Land and Development Corporation (Pty) Ltd; Tuckers Land and Development
Corporation (Pty) Ltd v Smith
[1984] 3 All SA 146 (T).
Skjelbreds Rederi A/S Hartless (Pty) Ltd 1982 (2) SA 710 (A).
Stalwo (Pty) Ltd v Wary Holdings (Pty) Ltd and Another 2008 (1) SA 654 (SCA).
Swart v Smuts 1971 (1) SA 819 (A).
Van der Bijl and Others v Louw and Another 1974 (2) SA 493 (C).
Wary Holdings (Pty) Ltd v Stalwo (Pty) Ltd and Others
2008 (11) BCLR 1123 (CC).
Willoughby’s Cons Co v Copthall Stores 1913 AD 267
Zandberg v Van Zyl 1910 AD 302.
Legislation
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Development Facilitation Act 67 of 1995.
Conservation of Agricultural Resources Act 43 of 1983.
Formalities in Respect of Leases of Land Act 18 of 1969.
Land Use Planning Ordinance 15 of 1985 [Western Cape].
Subdivision of Agricultural Land Act 70 of 1970.
Subdivision of Agricultural Land Act Repeal Act 64 of 1998.
Subdivision of Agricultural Land Act Repeal Bill [B101-97].
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