THE OBLIGATION TO PAY A SUM OF MONEY AS A REAL RIGHT: AN EXPOSITION OF THE PAST, PRESENT AND PROPOSED FUTURE POSITION IN SOUTH AFRICAN LAW

1
THE OBLIGATION TO PAY A SUM OF MONEY AS A REAL RIGHT:
AN EXPOSITION OF THE PAST, PRESENT AND PROPOSED FUTURE
POSITION IN SOUTH AFRICAN LAW
Dissertation submitted for partial fulfilment of the requirements for the degree
Baccalaureus Legum at the University of the Free State
A Strauss
2013150590
Module: LTHE 4824
Study Leader: Carey Robertson
2017

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Table of Contents
Chapter 1: Introduction and Overview: pages 3-4
Chapter 2: Historical Background of South African Property and Registration:
pages 4-5
Chapter 3: Rights in Law: pages 5-25
3.1 Real Rights and Limited Real Rights: pages 5-7
3.1.1 Classifying a Right as a Real Right or a Creditor’s Right: pages
8-19
3.1.2. Mineral Rights: pages 20-21
3.1.2.1 Historical Development of Mineral Rights as Limited
Real Rights: pages 20-21
3.1.2.2 Applicability of Mining Rights to the Obligation to Pay
a Sum of Money page: 21
3.1.3. Court’s Discretion: pages 22-23
3.1.4 Sectional Title Schemes: pages 23-24
3.1.5 The Creditor’s Right as a Real Right: pages 24-25
Chapter 4: Criticisms and Issues Pertaining to the Obligation of a Sum of Money
as a Real Right: pages 25-26
Chapter 5: Conclusion and recommendations: pages 27-30
Bibliography: pages 31-33

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Chapter 1: Introduction and Overview
Whether the obligation to pay a sum of money constitutes a real right in respect of
property has proved to be one of the most testing moot questions in the field of
property law for many years, since it first raised its head in the 1926 case of Ex Parte
Geldenhuys1 (hereinafter “Geldenhuys”). Despite coming close to an answer nearly a
century later in Cape Explosive Works Ltd. And Another v Denel and Others2
(hereinafter “Capex”) South African law has yet to learn the outcome.
It has also long been established that a personal right or creditor’s right3 can never
become a real right. However, it is the author’s intention to evaluate this possibility as
ancillary to property in the context of the obligation to pay a sum of money, as this
would have a profound effect on the point in question.
As the issue in question relates exclusively to limited real rights in immovable property
created in a will or contract4 – a welcome clarification of Van der Walt and Pienaar5 as
opposed to the broadly conceptualised “unorthodox or unusual rights”6 of Mostert and
Pope7 - it would be practical, as a point of departure, to set out the problem in an
analysis of the elements to which it relates.
In a distinction between real rights and creditor’s rights, one can acquire either of the
two in relation to corporeal property. The former is the only right of which vests in a
corporeal or incorporeal thing (ownership) which belongs to the owner, whereas the
latter commands a person; does something, pays another person money, or give
another person something.
1
1926 OPD 155.
2
2001 (3) SA 569 (SCA).
3
Note the author will only refer to creditor’s rights.
4
Van der Walt and Pienaar 2016: 30-31.
5
6
Mostert and Pope 2013: 50.
7

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Limited real rights are restricted in their application to specific uses for which the
property, belonging to another, can be used, and in South African law, there is the
possibility that certain categories and subcategories of limited real rights may be
created in a will or contract, as well as creditor’s rights.8 Hence an inquiry into which
of the two rights are being dealt with is necessary to ascertain which one is of
application.
Why it is so imperative to make such a distinction between a limited real right and
creditor’s right is because, when in relation to immovable property, real rights are
created through registration in the deeds registry,9 however, the Deeds Registries
Act10 only permits the registration of real rights in immovable property (and long-term
leases and mineral rights which will be expounded on hereunder).11 Furthermore,
conveyancers are sometimes tempted to register conditions where it may not be clear
if they may be so registered,12 or as Reid13 terms them “exotic conditions”.14
Chapter 2: Historical Background of South African Property and
Registration
As the saying goes “it is important to know where we come from to know where we
are going”,15 and as delineated by the author above with regards to seeking the
possibility of a creditor’s right becoming a real right in addition to the question in title,
the author deems a brief historical exposition thereof in this chapter appropriate to the
cause, with particular emphasis on registration in South Africa.
8
9
Van der Walt and Pienaar 2016: 30.
10
47/1937.
11
12
Reid 1997: 229.
13
Reid 1997: 229.
14
Reid 1997: 229.
15
Anon.

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South Africa’s land registration began with the establishment of the proverbial
victualing station by Jan van Riebeek in 1652.16 This was based on the provisions of
a placaat of Holland by Charles V in 1529 stipulating that the alienation and
hypothecation of all immovable property including, inter alia, houses and tithes, had to
take place before a Judge.17 Registration in a book was not required as the purpose
of the provisions was to effect public disclosure.18 A later edict stipulated that registers
thereof should be kept. In old title deeds one may still witness what the successors to
these Judges later came to be known as, “Heerden Gecommiteerd”.19 Thereafter, a
further formality of the presence of the Colonial Secretary was required.20 With the
establishment of the Supreme Court, a registrar of deeds was deemed to be a
necessary appointment and subsequently provided for in the Ordinance 39 of 1828.21
Until 1882, there was no proper maintenance of land registers.22 In 1918 the first
Deeds Registries Act23 was promulgated.24 Thereafter, farm registers were more
adequately recorded, however township registers were not opened until 1927, with
Township Ordinance 9 of 1927. 1937 finally saw the enactment of the Deeds
Registries Act25 which is still in operation today and which is the source of the issue
for the question in title, making provision for only the registration of real rights, but not
creditor’s rights.26
Chapter 3: Rights in Law
3.1 Real Rights and Limited Real Rights
Real rights are one of the most prominent propriety rights,27 inter alia, because they
encompass either limited real rights or ownership – the latter being “the most complete
16
Hunt and Campbell 2005: 13–35.
17
Nel 1991: 3.
18
Flint Jr. and Alfaro 2003: 714.
19
Nel 1991: 3.
20
Nel 1991: 3.
21
Nel 1991: 3.
22
Nel 1991: 3.
23
13/1918.
24
Nel 1991: 4.
25
47/1937.
26
Deeds Registries Act: Sec 63(1).
27

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real right and […] the only real right held in one’s own property”.28 Limited real rights
are a real right which a person, who is not the owner, holds in respect of property
owned by someone else.29
As stated above, ownership is “the most comprehensive relationship between a
person and a thing”,30 that is, it is the right from which other rights in property are
derived. As a result, these other rights are more restricted whereas ownership enjoys
an independence that these other ancillary rights do not.31
Limited real rights, the other category of real rights, comprise servitudes, real security
rights, and other sui generis/quasi-servitudes.32
Servitudes usually find application to land,33 the holder of which has the right to use
another person’s property for a specific, specified purpose, 34 and which may be
created in a valid will.35 By way of explanation: X bequeaths their farm to Y, subject to
Z having the use and fruits of the farm until Z’s death. We say that Z is the holder of a
limited real right called a usufruct over the farm. As a result, Y is the owner of the
property (the dominant tenement) and has a duty to not infringe on any use-rights
(servitudes)36 belonging to another, Z (holder of the servient tenement) who has a
corresponding duty to not, for example, alienate the property.37 It is in this way that the
owner of the property’s exercising of ownership thereof is effectively limited.38
28
29
30
Mostert and Pope 2013:
31
Mostert and Pope 2013:
32
Mostert and Pope 2013: 43-44.
33
34
35
36
37
38

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Real security rights ensure performance of an obligation.39 The holder of the real
security right becomes a creditor and subsequently attains a vested interest in the
debtor’s property made subject to the real security right,40 the result being that if the
debtor fails to perform the creditor has recourse to their interest in the property to
satisfy the debt.41 A practical illustration of real security rights may be evidenced in
pledge and mortgage.42 For example: X gives a corporeal or incorporeal movable
object of his to Z as security that X will repay the debt loaned to him by Z,43 after which
Z attains a limited real right to said object until such a time as Z has been repaid in
full44 – this is known as pledge. Mortgage may be illustrated as X registering a
mortgage over a movable or immovable object of his which grants Z a limited real right
over the object until such a time as the debt, given by Z to X, is repaid in full.45
The abovementioned real rights comprise the traditional classification as inherited
from Roman Law.46 South African law, however, does not limit its recognition of other
contemporary real rights.47 Mostert and Pope48 stress this in saying “it is important to
remember that there may be rights in South African law that do not fit comfortably into
either of these categories but, nevertheless, qualify as limited real rights”. 49 An apt
example in this regard entails that of mineral rights.50 Up until 2004 the classification
thereof was vehemently contested,51 with early jurisprudence on the one hand
claiming them to amount to a quasi-servitude, and scholars on the other hand opining
them to amount to being sui generis.52 South Africa’s new legal regime ushered in the
replacement of mineral rights with statutory rights, automatically rendering them either
a real right or limited real right.53
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53

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3.1.1 Classifying a Right as a Real Right or a Creditor’s Right
Two theoretical approaches, and various methods in which courts approach this
distinction, exist to aid in a determination as to whether a right is a real right or a
creditor’s right,54 namely, the so-called “personalist theory” and “classical theory”.55
The personalist theory asks the question “what is the way in which the real rights and
personal rights are enforced?”56 A real right is enforceable against the “whole
world”57,58 whereas a creditor’s right is only enforceable against a single individual or
a specific group of individuals.59
On the other hand, the focus of the classical theory on the one hand, is on the object
of the right in question. Here the question is asked “does the right apply to a thing or
performance?” If the right applies to a thing, then it is a real right, but if the right applies
to some performance then it is a personal right (the giving, doing, or refraining from
something).60 In 2011 the Supreme Court of Appeal confirmed the application of the
classical theory in South African law in the case of National Stadium South Africa (Pty)
Ltd v Firstrand Bank Ltd,61 (hereinafter National Stadium) through its explicit
delineation and application thereof to the facts at hand, Judge Harms (as he was then)
provides an excellent elucidation of the classical theory.62 In a constitutional light, the
court in Law Society of South Africa v Minister of Transport and Another,63 came to a
similar finding to that of National Stadium64 when it held the object of a personal right,
found in the performance of another, was property.65
54
55
56
57
Because it prevents anyone else besides the holder of the real right from interfering with the thing.
58
59
60
61
National Stadium South Africa (Pty) Ltd v Firstrand Bank Ltd 2011 (SCA) 11.
62
2011 (SCA) 11.
63
2011 (CC).
64
National Stadium South Africa (Pty) Ltd v Firstrand Bank Ltd 2011 (SCA).
65
Law Society of South Africa v Minister of Transport and Another.

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To elaborate, for a creditor’s right there will always be a debtor, creditor, and
obligation-deriving contract of some sort.66 Upon entering into a contract an obligation
is borne on the debtor.67 Simultaneously a right to that obligation or performance on
the debtor is held by the creditor.68 Because the obligation and subsequent right to
performance was derived from the authority of the contract,69 the parties will have to
resort back to the contract in order to enforce their respective rights from which
contract they were originally born.70
Reid71 submits another theory of his own,72 after his expansive analysis of the
distinction between the real rights and creditor’s rights in the South African legal
system,73 as well as the common civilian system of Scotland and other foreign legal
systems (a comparison of which such an extensively researched test for the distinction
between real rights and creditor’s rights may prove a valuable consideration to the
topic at hand).74 In Reid’s75 conclusion on such distinction he explains that his own
theory suggests three characteristics indicative of real rights;76 firstly, real rights are
concerned with things – the person or legal subject is in a direct relationship with the
thing or legal object (the most important aspect).77 Secondly, real rights (and personal
rights) are able to be enforced against the world at large.78 And thirdly, the
corresponding obligation to such real right has a negative nature – a so-called “no-
right” in the Hohfeldian terminology – the obligation to refrain from doing something. 79
66
67
68
69
70
71
Reid 1997: 227.
72
Reid 1997: 227.
73
Reid 1997: 227.
74
Reid 1997: 227.
75
Reid 1997: 227.
76
Reid 1997: 227.
77
Reid 1997: 227.
78
Reid 1997: 227.
79
Reid 1997: 227.

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The scenario regarding a real right differs from that of a creditor’s right,80 insofar as
with a real right there is no debtor and there is no contract.81 By implication, the
removing of these two elements result in a direct relationship between the holder of
the right and the thing,82 whereas with regards to a creditor’s right there is an indirect
relationship between the debtor and the creditor.83
Several classical cases exist in which this distinction between real rights and property
rights were at issue in regard to registration,84 namely, and in chronological order,
those of Geldenhuys,85 Lorentz v Melle and Others86 (hereinafter “Lorentz”) and Pearly
Beach Trust v Registrar of Deeds87 (hereinafter “Pearly Beach Trust”).
In the Geldenhuys88 case a husband and wife bequeathed a piece of land to their
children in a mutual will when they died.89 The result of this would make their children
co-owners of the property and divided equally amongst them.90 However, the child
who received the portion on which the homestead was situated, was to compensate
the other siblings by paying them an amount of money.91 The registrar of deeds
refused to register these stipulations,92 based on the argument that they did not
constitute real rights but creditor’s rights,93 which, in terms section 61(3) of the Deeds
Registries Act,94 cannot be registered.95
80
81
82
83
84
85
Ex Parte Geldenhuys.
86
1978 (3) SA 1044 (T).
87
1990 (4) SA 614 (C).
88
89
Ex Parte Geldenhuys:157.
90
Van der Walt and Pienaar 2016: 33
91
92
Van der Walt 2009: 10.
93
94
47/1937.
95
Deeds Registries Act: Sec61(3).

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The first issue entailed the stipulation regarding the co-ownership.96 As far as co-
ownership goes co-owners may usually decide when and how they will divide the
property.97 The will, however, stated that the subdivision would take place by the
drawing of lots at a specific time.98 A limitation was thus imposed on the children’s
common-law freedom of subdivision,99 imposing on them rights and obligations
between each other.100 The court inevitably here, had to ascertain the category of right
to which this provision belonged.101
The second problem related to the child drawing the portion with the house on it.102
The court had to determine whether this constituted a real right or creditor’s right which
the other children had against the one drawing that more valuable portion of the
land,103 as it also came with the obligation to pay a sum of money to the others.104
In addition to the classical and personalist approaches discussed above, the court in
Geldenhuys105 approached these issues through its formulation of what would come
to be known as “the subtraction from the dominium test.”106 With this test the obligation
which is created by the right in question is put under scrutiny.107 Once this ascertain
has been made, one then determines the effect thereof by noting the outcome of the
obligation if it is placed on its intended recipient – a thing or person.108
In application of the test to these obligations created in the will in question, the court
in Geldenhuys109 found that the obligation placed on the heirs to draw lots, at such a
96
97
98
99
100
101
102
103
104
105
106
107
108
109

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time when the eldest child reached the age of majority, diminished the conventional
right of co-owners to determine such for themselves.110 As a result this constituted a
burden on the land and was therefore registrable.111
As for the obligation on the child who was to draw the portion with the home on it, this
placed a burden on that child in his personal capacity,112 as a specific individual, to
pay to the other heirs an amount of money as compensation for drawing the more
favourable portion.113
It is at this stage important to note that the aforementioned obligation to pay a sum of
money was evidently a once-off burden.114 This will become imperative pertaining to
considerations of judicial discretion discussed later hereunder, especially as the Judge
in this case – De Villiers, J.P. (as he was then) – decided that the second obligation
should actually be registered and registered together with the first obligation,115 the
reasoning being because the obligation to pay the other siblings for receiving the
house was so closely connected with the obligation to draw lots at a specific time,116
so this could be done for convenience.117
In light of the decision in Geldenhuys118 it seems to be clear that the very specific
circumstance in which a person who, not as owner,119 is under an obligation to pay a
once-off payment of money to someone else, cannot be a real right.120 The intricacies,
however, in relation to situations where the facts are periodic payments and once-off
110
111
112
113
114
115
116
117
118
Van der Walt 2009: 14-15.
119
120

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and/or periodic payments where the person is owner,121 left the question of
registrability thereof open.122
What Van der Walt and Pienaar,123 however, place major emphasis on intention as an
important clue in helping the court to decide whether the right in question is a real right
or creditor’s right.124 Although intention is said to not be able to create a real right if
the obligation is on the debtor in their personal capacity.125 Furthermore, some authors
opine that the subtraction from dominium test in Geldenhuys126 is largely circular and
does not give principled results.127
It is the author’s humble opinion, that too much emphasis is placed on a strict following
of certain principles in Geldenhuys.128 Although the formulation of the subtraction from
dominium test ought to be lauded, the court decided not to dismiss the registrability of
the right,129 which placed the obligation on the child drawing the favourable lot to pay
a sum of money,130 but rather allow its registration for the sake of convenience. It is
for this reason that the author humbly opines that an element of harm should be
assessed as a further leg to the test which, if passed, should allow for the registration
of the right in question. Also, it is submitted that it may have been for this reason that
the legislature sought to include the prohibition of registration of creditor’s rights which,
if conceded does not amount to harm by an honourable Judge, cannot rightly be
refused registration.
In the case of Low Water Properties (Pty) Ltd and Another v Wahloo Sand cc,131 the
applicants attempted to argue that once a servitude was registered in the deeds
121
122
123
124
125
126
127
Reid 1997: 229.
128
129
130
131
1999 (1) SA 655 (SE).

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registry the status thereof changed from a personal right into a real right.132 However,
the court held the Deeds Registries Act133 does not allow for the registration of the
servitude itself,134 but merely authorises the registration of the deed in which it is
contained.135 A servitude is complementary or ancillary to the right in the deed.136
As stated above, it is common cause that the issue in title encompassed the obligation
to pay a sum of money in one’s own capacity, of which, from Geldenhuys137 it might
be possible to have an answer.138 The question then arises, however, where one is
not dealing with obligations in one’s own personal capacity, or once-off payments but
other rights to sums of money.139 This was raised in several cases which shall be
discussed hereafter.140
In the case of Lorentz,141 an obligation to pay an amount of money to someone
presented itself again,142 although this time in the form of a condition in a contract,143
in terms of which a landowner was obligated to pay the former co-landowner money
for the building of a township on the land,144 and which had already been registered.145
In answering the question as to whether the right should have been registered,146 the
court applied the test formulated in the Geldenhuys147 case, with an added nuance –
the court found that such condition did constitute a burden on the land,148 the parties
had intended as such,149 and – the additional prong added to the test – whether the
132
Low Water Properties (Pty) Ltd and Another v Wahloo Sand cc:1.
133
47/1937.
134
135
136
137
138
139
140
Zimmermann and Visser 1996: 800.
141
Lorentz v Melle and Others.
142
143
144
145
146
Van der Walt 2009: 22-23.
147
148
Van der Walt 2009: 23
149

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obligation in question affected the owner’s right of use in the land (so-called usus).150
The court found the usus not to be affected,151 therefore it placed no burden on the
owner so it constituted a creditor’s right, but not a real right, and subsequently should
not have been registered.152 As such, this restrains the scope of application of the test,
and dispenses with all rights which do not affect physical use.153
On this point, Van der Walt and Pienaar154 state that this amendment to the test of
Geldenhuys155 is problematic,156 as it contradicts the more conventionally established
rights of mineral rights and mortgage bonds157- one can encumber their property with
these,158 yet they seem to contradict the rationale for the restrictive test in
Lorentz,159160as ordinarily mineral rights and mortgage bonds affect the right of use in
land,161 so theoretically these should not pass the test in Lorentz162, and be allowed to
be registered. However, by statute, mineral rights and mortgage bonds are allowed to
be registered.163164 The court’s decision in this regard was confirmed in the most
authoritative case at present – Capex,165 although this case did not rule on the
obligation to pay a sum of money.166
However, the author hereof humbly submits that this cannot be problematic for any
application of this amended test in Lorentz,167 as the right to physically use the land
includes that of sale which would rightly include mineral rights and mortgage bonds
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
Cape Explosive Works Ltd. And Another v Denel and Others.
166
167

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from the amended test, but still the author then opines a narrowing of the additional
test in Lorentz168 to swing the pendulum and broaden the scope to include mineral
rights and mortgage bonds by limiting this test further to a question of sale as it would
not have been possible for the co-owner in the facts of Lorentz,169 nor the children who
drew the bigger lots in Geldenhuys,170 to sell the property in question, but this right
had vested (even if it could not be realised) in both cases and subsequently could be
used as a more accurate determination to ascertain.
In the author’s humble opinion, he submits that Van der Walt and Pienaar171 too readily
concede the finality of the decision in Lorentz,172173 despite the rulings of the Supreme
Court of Appeal in Capex,174 in particular with regard to the profound weight which the
court attached to the intention of contracting parties as a determining factor in relation
to whether the right may be registrable or not. The author respectfully submits that the
decision in Capex,175 pertaining to intention should be applied in future cases where a
contracting party was obliged to pay a sum of money, especially as it is the higher
court.
Where the court’s differed in the cases of Lorentz176 and Capex177 however, was in
the respective weight which each one placed on the element of intention in determining
whether the right in question constitutes a real right or creditor’s right.178 In Lorentz179
the court alluded to no regard having to be given to the intention of the parties when it
simply overruling such.180 Contrary to this decision, the court in Capex181 expressly
168
169
170
171
172
173
174
175
176
177
178
179
180
181

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stated that the parties’ intention was so important that it had equal weight to that of the
question as to whether the burden could or could not be registered.182
The intention of the parties was given due weight in the later case of Pearly Beach
Trust.183 The facts presented before the court involved a condition,184 again in a
contract,185 which provided for the payment of a sum of money,186 should the property
in question be expropriated,187 or mining rights granted over it,188 even if the land no
longer was owned by the owner.189 The registrar of deeds refused the registration
thereof, claiming a constitution of a creditor’s right.190
The court ousted the additional test included in the Lorentz191 case,192 requiring an
analysis of whether the owner’s physical use of the property was affected,193 and
applied the original test as laid down in Geldenhuys.194195 The Geldenhuys196 case
held the view that if a right placed an obligation on a person in their personal capacity
then it constituted a creditor’s right.197 If a right placed a burden on the owner of the
land,198 of which land was burdened with such obligation, then the result would be a
real right, and effectively registrable.199
182
183
Pearly Beach Trust v Register of Deeds.
184
Pearly Beach Trust v Register of Deeds:615.
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199

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In its application to the facts, the court in Pearly Beach Trust200 held that the condition
herein, imposed a burden on the owner, as the owner could not dispose of his property,
nor fully enjoy the fruits thereof in relation to the minerals on the land. This burden
inevitably rested on the land and subsequently amounted to a real right and could
therefore be registered.201
In the Pearly Beach Trust202 decision, due regard is evidenced having been given to
the parties’ intention to contract.203 Evidently weighing towards an opposite conclusion
as opposed to the alternative in the Lorentz204 case.
As stated above the subtraction from dominium test of Geldenhuys205 was crystallised
in the case of Capex.206 Although the latter did not deal with the obligation to pay a
sum of money,207 its finding in this regard is binding in future cases pertaining to the
obligation to pay a sum of money as the aspects which the judgment applies to would
inextricably apply to those involving an obligation to pay a sum of money. An analysis
of the case is therefore pertinent.
The facts of Capex208 involved a condition inserted in a deed of sale that restricted the
use of a property of which an element of impossibility of performance was linked to a
right of the original owner to repurchase.209 Similarly to the facts of Lorentz,210 the
rights in question had already been registered,211 but had not been forwarded in all
the title deeds over subdivisions of the land in question,212 The result being that the
200
201
202
203
204
205
206
Cape Explosive Works Ltd. And Another v Denel and Others:12.
207
208
209
210
211
212

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first right was still registered but now only applied to a small portion of the land.213 The
question in this case was whether, by omitting to include the right in the subsequent
title deeds extinguished the right or not.214
It is here that the court in Capex215 included another fundamental element to the test
of determining whether a right is a real right and subsequently registrable – the
intention of the creator of the real right must be to bind both the owner at present and
their successors in title.216
Other ancillary cases worth mentioning include those of Registrar of Deeds
(Transvaal) v The Ferreira Deep Ltd217 and Odendaalsrus Gold, General Investments
& Extensions Ltd v Registrar of Deeds.218219 In the former case the court found that
established use and practice could establish registration could render a right which
was traditionally not real,220 real and subsequently registrable.221 As the topic of this
dissertation is primarily concerned with unconventional “new” rights,222 this may not
serve as much weight as the other case law mentioned herein, however the author
deems such a mention of these cases as it may quite possibly be that the “new” rights
which are facing scrutiny for potential registration, may become an established
practice, as dealt with in the Ferreira Deep case,223 in which case a judgment to this
effect may well find application.
213
214
215
216
Cape Explosive Works Ltd. And Another v Denel and Others:12.
217
1930 (A).
218
1953 (O).
219
220
221
222
223
Registrar of Deeds (Transvaal) v The Ferreira Deep Ltd.

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3.1.2. Mineral Rights
As alluded to above, the position regarding mineral rights, displayed a similar
controversy to that of the obligation to pay a sum of money,224 pertaining to the formers
place as a real right or limited real.225
What is of relevance here to the topic in issue is the categorisation and legislative
response taken to mineral rights and how this may be applied to the obligation to pay
a sum of money, which makes an analysis thereof inextricably linked to this topic.
The correctness of a mineral right being a limited real right is still vehemently contested
by South African courts and academic authors alike,226 and an in-depth analysis is
beyond the scope of this dissertation, however the author deems a concise exposition,
pertinent in this regard for possible application thereof to the classification of an
obligation to pay a sum of money as a real right.
3.1.2.1 Historical Development of Mineral Rights as Limited Real Rights
As a result of the above, a discussion on the historical development leading up to the
categorisation of mineral rights being classified as limited real rights, is necessary and
apt to the discussion at hand.
Prior to the coming into force of the Mineral and Petroleum Resources Development
Act227 (hereinafter MPRDA) in 2004, a very different position attached to mineral rights
in South Africa. At common law, the principle ciuis est solum (“rights of the owner of
immovable property extend up to the heavens and down to the centre of the earth”),228
place mineral rights in ownership of the landowner,229 and subsequently a real right
224
225
226
Majoni 2013: 1.
227
28/2002.
228
Minister of Minerals and Energy v Agri South Africa (Centre for Applied Legal Studies as amicus
curiae) [2012] 3 All SA 266 (SCA). 29.
229
Majoni 2013: 1.

21
and registrable in the title deed of the owner.230 This position was confirmed in an
extensive amount of cases, all coming to same conclusion that mineral rights are real
rights, including an Appellate Division decision and even the post-2004 case of the
Supreme Court of Appeal in Minister of Minerals and Energy v Agri South Africa
(Centre for Applied Legal Studies as amicus curiae).231 However, the MPRDA232
stipulates the nature of mineral rights to be that of a limited real right,233 evidently
following an English law approach not recognised in the substantive Roman-Dutch law
tradition followed in South Africa,234235 and registrable in the Mining Titles Office236- an
overriding of the common law position which is provided for in section 4(2) of the
MPRDA.237 As a result of this stipulation the landowner becomes the holder of a limited
real right over the minerals,238 and the state a custodian or “facilitator” thereof,239
dispensing the rights when applied for and granted.240
3.1.2.2 Applicability of Mining Rights to the Obligation to Pay a Sum of Money
From the above it is clear that the legislature has the power to override the common
law where it deems appropriate in similar issues of classification of rights,241 through
the insertion of a clause to that affect in the applicable legislation,242 a possibility which
may find favour in a practical settling of the dispute as to whether the obligation to pay
a sum of money may be registered. An example of such a clause may be found in the
MPRDA in section 4(2) of the Act.
230
Majoni 2013: 1.
231
Minister of Minerals and Energy v Agri South Africa (Centre for Applied Legal Studies as amicus
curiae).
232
28/2002.
233
Sec 5(1).
234
Majoni 2013: 5.
235
Kleyn and Viljoen 2010: 19.
236
Sec 25 (2)(a).
237
28/2002.
238
Majoni 2013: 5.
239
Majoni 2013: 5.
240
Majoni 2013: 5.
241
Mineral and Petroleum Resources Development Act: Sec 4(2).
242
Mineral and Petroleum Resources Development Act: Sec 4(2).

22
3.1.3. Court’s Discretion
The decision of Judge De Villiers, J.P. (as he was then), in the case of Geldenhuys,243
to allow for the registration of the creditor’s right in question,244 self-evidently justifies
an appraisal thereof into the reasoning and impact this may possibly have for a future
position of the registrability of creditor’s rights.
After concluding that the first condition – the drawing of lots by the heirs to determine
which portion of the land each one received – may be registered245 – the court turned
to the obligation imposed on the child to pay a sum of money to their other siblings in
compensation for receiving the portion of land with the homestead on it246 – the second
condition.247 The court concluded that the second condition is a “jus in personam”248
– a creditor’s right – which is per se unregistrable.249 However, analysing the nature
of the second condition, the court concluded that it was “so intimately connected”250
with the first condition, which could be registered, that if the second condition was not
registered with the first condition the result would be “incorrect”,251 an “imperfect”252
testamentary picture,253 and “misleading to strangers”.254 If, for illustrative purposes,
one was a purchaser of the property concerned before the subdivision, how would one
know the scope of such a condition in a title deed which provides for the subdivision
of the land by drawing of lots but nothing further about the provision of anyone having
to pay anyone or anyone being entitled to receive payment?255 – this could quite
possibly have negative consequences on outsiders in future dealings with the property
243
244
245
246
247
248
249
250
251
252
253
254
255

23
concerned,256 and this is the crux of what the court in Geldenhuys257 sought to prevent
by allowing the registration of the creditor’s right in question.
Judge De Villiers, J.P. (as he was then), however added a caveat to his judgment,
stipulating that a registrar of deeds should not take the judgment to mean that should
similar facts be presented in future that they may register the prospective creditor’s
right.258 He emphasises that an order of court should be obtained to this end,259
echoing the words of Judge Innes, C.J. (as he was then) in the case of Hollins v
Registrar of Deeds260 that a court, when dealing with the Registry of Deeds, should
exercise great caution.261
From this it becomes apparent that the primary objective of the court is to protect
outsiders,262 be them buyers or others,263 who are to engage in dealings involving the
creditor’s right and the potential effect thereof,264 and the author of this dissertation
humbly opines that it may be inferred from Judge De Villiers, J.P. (as he was then),
that where a similar issue presents itself before court, the facts being similar or not,
and the registration of the creditor’s right would be required to ensure fair dealings with
such outsiders then such creditor’s rights may be registered.
3.1.4 Sectional Title Schemes
When applying to open a sectional title register, the developer may register their right
in a condition to extend the building in question.265
256
257
258
Ex Parte Geldenhuys:166
259
260
1904 TS 603.
261
Hollins v Registrar of Deeds:603.
262
263
264
265
Pienaar 2010: 261.

24
An aspect worth noting in relation to the issue in title is found in Erlax Properties (Pty)
Ltd v Registrar of Deeds.266 The court held that a right of extension of a sectional title
was a limited real right,267 but not transferable in terms of the Sectional Titles Act,268
as a result of its classification as a personal servitude of the developer269 – familiar
territory as evidenced in Capex,270 from which it is now known that for the right to be
registrable it must bind the successors thereto271. However, the Sectional Titles
Amendment Act272 changed this position so that a right of extension is now
transferable,273 a welcome finding by the court in Body Corporate of Savannah Park v
Brainwave Projects274 as although the characteristics of a servitude are present the
elements it lacks include there being no dominant tenement and incapability of being
transferred275 and lapsing of the right invests the body corporate with it effectively
rendering this a sui generis right – unique like no other.276
In a similar light to the above exposition of mineral rights and their application to the
topic in question, present in the aforementioned cases pertaining to sectional titles, is
another example as to how the position regarding the classification of a right as
unregistrable can be changed, this time through the interpretation of the judiciary.
3.1.5 The Creditor’s Right as a Real Right
An approach deemed “massively influential”277 found within the teachings of Gaius,
contained in the Institutes278 - from which South Africa derives many of its common
law principles based on the Roman-Dutch law279 - states the following: a thing may be
266
1992 (A).
267
268
66/1971.
269
270
271
Mbodla 2002:281
272
15 of 1993.
273
Body Corporate of Savannah Park v Brainwave Projects 1147 CC 2012 (SCA): 9-10.
274
Body Corporate of Savannah Park v Brainwave Projects 1147 CC 2012 (SCA): 9-10.
275
Pienaar 2010: 263.
276
Pienaar 2010: 264.
277
Reid 1997: 230.
278
Reid 1997: 230.
279
Kleyn and Viljoen 2013: 80.

25
corporeal or incorporeal.280 The latter refers to rights which includes a personal right
based on obligation.281 This premise has extraordinary consequences on what we
know the position to be as delineated above. In effect, as the object of a real right is a
thing,282 and a right may now be a thing itself,283 the possibility can only be that real
rights can actually exist within rights.284 To practically illustrate the effect of this
position, Reid285 formulates the following – if, for example, A borrows R1000 from B,
the latter who has a contractual right against A for the repayment of a debt (which is
unmistakenly a creditor’s right) also has to be a real right because B has a creditor’s
right against A for the amount of money and, according to Gaius286 and the Justinian
Institutes,287 has a real right to the personal right.288
Chapter 4: Criticisms and Issues Pertaining to the Obligation of a
Sum of Money as a Real Right
There would not be much value attained in an analysis of the obligation to pay a sum
of money as a real right should one not also take into account any possibilities of
negative deductions in that regard.
In an extensive examination in this regard, Reid289 warns of the “border” between the
law of property and obligations being crossed, or even a “collapse” as he puts it,290 of
the law of property, should this distinction between the two fields of law, in respect of
real rights and creditor’s rights, become too loosely allowed to overlap.291 As
evidenced in the preceding chapter, there does exist authority for a real right usurping
the personal right to a sum of money,292 however, there too exists criticisms to this
280
Reid: 1997: 230.
281
Reid: 1997: 230.
282
Reid: 1997: 230.
283
Reid: 1997: 230.
284
Reid: 1997: 230.
285
Reid: 1997: 230.
286
Gaius Institutes 2 12-14.
287
Justinian Institutes 2 2.1-3.
288
Reid: 1997: 230.
289
Reid: 1997: 245.
290
Reid: 1997: 245.
291
Reid: 1997: 245.
292
Reid: 1997: 230.

26
approach,293 which require exposition before any questions can be asked of possible
implementation of the approach of Gaius.
Criticisms include: firstly, the approach does not have to be so complex – the idea
should simply be that A is obliged to pay B.294 Secondly, with this approach it is
unnecessary to take the ownership right of B into account.295 Thirdly, the aspects that
normally make up ownership such as possession do not readily ascribe to this notion
of owning rights,296 and lastly such an approach may blur the line between the law of
property and law of obligations.297
In response, solutions have been postulated to these criticisms which include the
following:298 in response to the first criticism, the model being too elaborate,299 may
then only find application where it be useful to do.300 The second criticism, ownership
of ownership,301 can be solved through acceptance of the fact that ownership is the
only right which cannot be owned.302 Thirdly, the argument that normal aspects of
ownership do not really ascribe to owning rights,303 is no surprise as the traditional
incidents of ownership were fashioned in accordance with corporeal property,304 not
incorporeal property.305 This is where the whole problem lies, and a “moving with the
times” much needed. the last criticism merely seems to be overstated.306
293
Reid: 1997: 230.
294
Reid: 1997: 230.
295
Reid: 1997: 230.
296
Reid: 1997: 230.
297
Reid: 1997: 230.
298
Reid: 1997: 231.
299
Reid: 1997: 230.
300
Reid: 1997: 230.
301
Reid: 1997: 230.
302
Reid: 1997: 230.
303
Reid: 1997: 231.
304
Reid: 1997: 231.
305
Reid: 1997: 231.
306
Reid: 1997: 231.

27
Chapter 5: Conclusion and recommendations
The question as to whether a creditor’s right may enjoy registration, from the inception
thereof in the case of Geldenhuys307 until present, has been filtered through many
cases,308 proving the profound importance that a person attaches to his property
property in seeking the need to register it – echoing John Locke’s elevation of property
rights to the number one fundamental right one has against the state.309 Each court
added its own interpretation as to how the question should be decided through
particular tests which have been altered as this question was passed through each
court’s particular point of view, the most important ones being: Geldenhuys,310 with the
“subtraction from the dominium test,”311 Lorentz312 with the additional “diminishment
of the owner’s usus” test, Pearly Beach Trust313 with its “pure test,” and finally Capex314
with the “intention to bind successors in title,”315 as well as the confirmation of the
principle in Lorentz.316
As a result of the above, the author submits two possibilities with regard to the
obligation to pay a sum of money: either no question can be entertained now as to
certain aspects of the appropriate test which should be applied in future. From National
Stadium South Africa (Pty) Ltd v Firstrand Bank Ltd317 and Capex318 cases
respectively, it can be stated that the appropriate test to apply in cases where it is to
be decided where a sum of money can be registered is firstly, whether the right in
question subtracts from the dominium of the land in question.319 Secondly, “is there a
307
308
309
Van Blerk 2017: 19.
310
311
312
313
314
2001 (3) SA 569 (SCA).
315
2001 (3) SA 569 (SCA) 12.
316
317
318
319

28
diminishment of the owner’s usus of the land?320 And thirdly, “there must be an
intention to bind successors in title.”321 These three aspects are peremptory.
The aforementioned test constitutes the fixed aspects of the test, applying to any
question of an obligation to pay a sum of money as constituting a real right. Intention
of the parties to create a real right is a factor that must be analysed with regard to
similar facts to Capex,322 however, not in respect to any other facts, including those of
paying a sum of money in circumstances of limited real rights in immovable property
created in a will or contract, where the debtor is the owner, and periodic payments and
once-off and/or periodic payments, which is that to which the question in title relates.323
The second possibility, with regard to the obligation to pay a sum of money, is that
should the Supreme Court Appeal, or higher Constitutional Court (especially after the
recent amendment to its jurisdiction being able to decide matters unrelated to
constitutionality)324 find a misapplication of common law principles as illustrated in the
above case law, and choose to apply the Gaius approach to this issue – a monumental
circumstance, yet nevertheless plausible in light of the above – this would drastically
change the face of property law as it is known to be in South Africa, perhaps
conveniently in its benefits to registrations, not only to obligations to pay a sum of
money, but other rights, in a necessity to keep abreast of changes in a contemporary
society, a point on which Reid325 says unless amended, South Africa is a “spectator”
in.326 After all, the rights over rights idea is a concept found in the majority of legal
systems,327 irrespective of the legal system in place. Even the French Civil Code, for
example, recognises that incorporeal property (rights) can be owned,328 and certain
authors too seem to, for the most part, agree to a recognition of rights within rights.329
320
321
322
323
324
Peté et al 2017:62-63.
325
Reid: 1997: 231.
326
Reid: 1997: 231.
327
Reid: 1997: 232.
328
Reid: 1997: 232.
329
Reid: 1997: 229.

29
Positive stipulations to an ownership of rights approach are threefold:330 firstly, it
cannot really be denied that rights fall into one’s patrimony,331 even the opposed
school of thought to rights in rights do not contest this,332 secondly this treatment
provides due recognition to common rules,333 the development thereof,334 as well as
due weight being attached to the element of intention335 (a very important aspect as
seen above), thirdly, and as already expounded on above, is that the idea of rights
attaching to rights can be evidenced in almost all legal systems.336
The author now humbly draws a conclusion from the findings scrutinised in this
dissertation. To this end it would be prudent to restate the research question – the
obligation to pay a sum of money as a real right. This question was found to entail a
scope – that being limited real rights in immovable property created in a will or contract.
This has a substantial impact on such a question in its application to the two
approaches to rights. Reid337 submits that the question is not about which method is
correct,338 but what is useful.339 However the author suggests that with regard to rights
in immovable property created in a will or contract, such a distinction is superfluous
for such a test in relation to this qualification, as inevitably, as in each of the cases
elaborated on above dealing with the issue, it would in any case be more useful to
register the right in dispute. After all it is the registration of “contentious” rights which
is being dealt with and as evidenced in Geldenhuys340 it would be more useful to
register the right in question.
330
Reid: 1997: 231.
331
Reid: 1997: 231.
332
Reid: 1997: 231.
333
Reid: 1997: 231.
334
Reid: 1997: 231.
335
Reid: 1997: 231.
336
Reid: 1997: 231.
337
Reid: 1997: 232.
338
Reid: 1997: 232.
339
Reid: 1997: 232.
340

30
The possibility remains for an amendment to the Deeds Registries Act341 enabling the
registration of creditor’s rights. However, the court in Geldenhuys342 saw the need to
provide for future possibilities of the registration of creditor’s right to be first approved
by court order and it was not only this case which expressed concern for interference
with the deeds registry which may highlight an important point. After all, the
Geldenhuys343 case has stayed the test of time. An argument of easing the burden on
the courts by providing legislative registration of creditor’s rights is dispensed with
when one considers the redundant effect this may have should there arise disputes
pertaining to the registration of said creditor’s right, therefore the author proposes a
judicial test for the registrability of contentious creditor’s rights in immovable property
where the owner is under an obligation originating in a will or contract: firstly, whether
the right in question subtracts from the dominium of the land in question? Secondly,
“if there is a diminishment of the owner’s usus of the land? Thirdly, “there must be an
intention to bind successors in title,”344345 “it should be convenient to register the
creditor’s right in question,” fourthly, “the intention of the creator of the real right must
be to bind both the owner at present and their successors in title”,346 and fifthly, there
should be no foreseeable harm caused to any of the parties or outsiders who are to
have dealings with the creditor’s right. And lastly, if any or all of these requirements
are not met, the author, in his humble opinion, submits that an applicant may
nevertheless still have a right of recourse to appeal such decision, as a constitutional
violation of one’s rights which is not catered for legislatively in that, as in the
MPRDA,347 there is no clause stipulating that the Deeds Registries Act348 has
precedence over any common law rights which may come into conflict with the Act to
register one’s common law right, as provided by the old Roman-Dutch authorities to
their ownership of one’s right to their creditor’s right.
341
342
343
344
345
Mbodla 2002:281.
346
Mbodla 2002:281.
347
28/2002.
348
47/1937.

31
BIBLIOGRAPHY
GAIUS
161. Institutes of Gaius. Vol 2. 12-14. Rome.
HUNT J AND CAMPBELL H
2005. Dutch South Africa: Early Settlers at the Cape, 1652-1708. 1st ed.
Philadelphia: University of Pennsylvania Press.
JUSTINIAN
533. Justinian's Institutes. Vol 2. 2.1-3. Rome.
KLEYN D AND VILJOEN F
2010. Beginner’s Guide for Law Students. 4th ed. Claremont: Juta.
MAJONI F
2013. Mine or yours? A closer look at s 5 of the Mineral and Petroleum
Resources Development Act. De Rebus 42(151):1-6.
VAN DER WALT AJ AND PIENAAR GJ
2016. Introduction to the Law of Property. 7th ed. Claremont: Juta.
ZIMMERMANN R AND VISSER DP
1996. Southern Cross: Civil Law and Common Law in South Africa. 1st ed.
New York: Clarendon Press.

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MBODLA N
2002. The Test for the Registrability of Rights: What is the Law after Cape
Explosive Works? South African Law Journal 199:277-282.
MOSTERT H, POPE A, PIENAAR J, VAN WYK J, FREEDMAN W AND
BADENHORST P
2010. The Law of Property in South Africa. 1st ed. South Africa: Oxford.
NEL H
1991. Jones’ Conveyancing in South Africa. 4th ed. South Africa: Juta.
PETÉ S, HULME D, DU PLESSIS M, PALMER R, SIBANDA O AND PALMER T
2017. Civil Procedure: A Practical Guide. 2nd ed. Cape Town: Oxford.
PIENAAR GJ
2010. Sectional Titles and Other Fragmented Property Schemes. 1st ed.
Clarement: Juta.
REID KGC
1997. Obligations and Property: Exploring the Border. Acta Juridica
225(245):225-245.
VAN BLERK AE
2017. Jurisprudence an Introduction. 1st ed. South Africa: LexisNexis.

33
VAN DER WALT AJ
2009. Casebook for Students Law of Property. 7th ed. Claremont: Juta.

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