Frannero Property Investments 202 (Pty) Ltd v Clement Phuti Selapa and Others

Frannero Property Investments 202 (Pty) Ltd (the applicant) owned Portion 35 of the Farm Waterval 306 in Rustenburg, North West Province. The property was initially owned by Rustenburg Platinum Mines, then registered to Mr Felix Formariz in 1983. From 2000, Mr Formariz began leasing rooms on the property to mine workers on oral month-to-month rental agreements. Between 2001 and 2010 various tenants occupied and vacated the property. By 2012, the property was rezoned to establish an Industrial Township. In October 2012, Mr Formariz sold the property to the applicant's predecessor in title, with transfer occurring to the applicant on 7 August 2015. In September 2014, the applicant issued 30-day written notices to all tenants cancelling their verbal lease agreements, requiring them to vacate by 31 October 2014. The tenants, approximately 300 people, refused to vacate, stopped paying rent (arrears accumulated to R944,504.50), and claimed they were occupiers under ESTA. Services (electricity and water) were disconnected. The applicant instituted eviction proceedings in the High Court under PIE. The respondents raised a special plea that they were occupiers under ESTA, not unlawful occupiers under PIE, and that their occupancy rights had not been lawfully terminated.

• Whether the respondents were 'occupiers' within the meaning of the Extension of Security of Tenure Act 62 of 1997 (ESTA)
• Which party bears the onus of proving that ESTA applies to the occupiers
• What evidence is sufficient to discharge the onus of proving income does not exceed the prescribed amount under ESTA
• Whether the High Court had jurisdiction to hear the eviction application under PIE when ESTA potentially applied
• Whether the termination of the respondents' occupancy rights was lawful
• Whether it is appropriate for the Supreme Court of Appeal to determine a PIE application for the first time on appeal

1. Special leave to appeal granted. 2. Appeal dismissed in relation to the 15 respondents whose names appear in Schedule A (those who proved they were unemployed and thus qualified as ESTA occupiers). 3. Appeal upheld in relation to the remaining respondents. The Full Court's order set aside and replaced with an order: (a) upholding the appeal; (b) referring the application back to the High Court for determination under PIE; (c) no order as to costs in the High Court. 4. No order as to costs in the Supreme Court of Appeal.

1. The party who invokes the protection of ESTA bears the onus of proving that all the jurisdictional requirements for the application of the Act are met, including proving that they are not disqualified under any of the statutory exclusions in section 1(1)(x) of ESTA. 2. To prove that income does not exceed the prescribed statutory maximum under ESTA section 1(1)(x)(c), an occupier must provide specific, credible evidence of their individual financial circumstances. A bare, hearsay statement that 'the majority' earn less than the prescribed amount is insufficient to discharge this onus. 3. Where an occupier fails to discharge the onus of proving they fall within ESTA's protection, their occupation is governed by PIE rather than ESTA, and they may be classified as unlawful occupiers. 4. While ESTA provides statutory presumptions assisting occupiers (particularly sections 2(2) regarding land falling within the Act's scope, and section 3(4) regarding consent), these presumptions do not displace the fundamental onus on the occupier to prove all definitional elements of 'occupier' status. 5. It is undesirable for an appellate court to determine for the first time on appeal the merits of an eviction application under PIE where the lower courts have not dealt with those merits, having determined the matter on a special plea. In such circumstances, the matter should be referred back to the court of first instance.

1. The Court noted that casting the burden of proof regarding income on occupiers was not unduly harsh, as income is a matter 'peculiarly within their knowledge', whereas placing such a burden on landowners seeking eviction would cause undue hardship. 2. The Court observed that Mr Chivura's affidavit stated that the 48 confirmatory affidavits represented only a 'portion' of the respondents and that the remainder would be made available if necessary, yet no further evidence was tendered. The Court noted there was no explanation for what this anticipated evidence would contain or why it was not provided. 3. The Court commented on the technical approach adopted by the respondents in raising their special plea, which resulted in neither the High Court nor Full Court dealing with the merits of the PIE application. 4. The Court noted the Municipality's evidence about the severe shortage of housing, land and financial resources to meet its constitutional housing obligations, listing several other landowners in the Rustenburg Municipality area collectively seeking to evict about 4,000 tenants. 5. The Court distinguished the case from Odvest 182 (Pty) Ltd v Occupiers, where although the occupiers pleaded that ESTA applied, they consented to the jurisdiction of the High Court, allowing that court to deal with the matter under PIE. 6. The Court noted that the applicant's evolving relief sought orders compelling the State to buy the property or pay constitutional damages, but observed that no proper case had been made for such an order and did not pursue this aspect further.

This judgment is significant in South African land tenure law for several reasons: 1. Onus of proof under ESTA: It definitively clarifies that the party invoking ESTA bears the onus of proving all elements that bring them within the Act's protection, including that they fall outside the statutory exclusions. This is consistent with the common law principle 'he who alleges must prove'. 2. Evidential requirements: The judgment establishes that bare, hearsay averments are insufficient to discharge the onus of proving income limits under ESTA. Occupiers must provide specific, credible evidence about their financial circumstances - a matter peculiarly within their knowledge. 3. Interaction between ESTA and PIE: The judgment reinforces the principle from Randfontein Municipality v Grobler that ESTA and PIE are complementary statutes with distinct spheres of application. ESTA applies to occupation with consent on rural land; PIE applies where consent is lacking. The jurisdictions are mutually exclusive. 4. Presumptions under ESTA: While confirming that statutory presumptions assist occupiers (particularly regarding consent and the nature of land), the judgment makes clear these do not relieve occupiers of proving all definitional elements, including income limits. 5. Judicial restraint: The Court demonstrated restraint in declining to determine a PIE application for the first time on appeal where lower courts had not dealt with its merits, preferring to remit the matter. This upholds principles of procedural fairness and proper appellate function. 6. Practical implications: The judgment has significant implications for eviction proceedings involving multiple occupiers, requiring individualised evidence of financial circumstances rather than collective or representative statements. The case provides essential guidance on proof requirements in ESTA cases and the proper allocation of evidentiary burdens in land occupation disputes.