Isedor Skog N.O. & Others v Koos Agullus & Others

The Rein Trust (the Trust) purchased a farm in 2010 from a previous owner. Several farm workers and their families resided in cottages on the farm. The occupiers were former employees or family members of employees either of the Trust or its predecessor in title. After the Trust took ownership, employment relationships with the occupiers ended on 24 June 2011, when they were ordered to vacate the farm. They refused to leave. In 2013, the Trust approached the Magistrates' Court, Wellington, seeking eviction under ESTA. The magistrate dismissed the application in February 2017, finding disputes of fact and failure to prove compliance with s 8(1)(3) of ESTA. The Trust did not appeal. After the magistrate's judgment, the Trust issued further notices in 2018, including a notice considering termination of rights of residence and calling for representations (none were received). The Trust then issued termination notices and a notice to vacate within 30 days. None of the occupiers vacated. In June 2019, the Trust approached the Land Claims Court (LCC) for eviction. The Trust alleged the occupiers' unacceptable conduct had caused an irretrievable breakdown of the relationship, including: non-payment of rent since 2011, improper waste disposal, unsanitary conditions, damage to property, keeping dogs, allowing rowdy visitors, vandalism, and fire risks. The occupiers denied these allegations generally but did not specifically refute many material averments. The LCC dismissed the application, finding the Trust had not identified specific individuals guilty of misconduct and that it was not just and equitable to grant a mass eviction. The Trust appealed with leave. The occupiers cross-appealed on the issue of res judicata.

• Whether the termination of the occupiers' right of residence was lawful under s 8 of ESTA
• Whether the termination of the right of residence was just and equitable, having regard to s 8(1) factors
• Whether the occupiers committed a fundamental breach of the relationship under s 10(1)(c) of ESTA
• Whether it was just and equitable to grant an eviction order under ss 9 and 10/11 of ESTA
• Whether the availability of alternative accommodation should preclude eviction
• Whether the doctrine of res judicata precluded the LCC from considering the eviction application due to the earlier magistrate's court judgment
• Whether the LCC erred in its application of the Plascon-Evans principle regarding disputes of fact in motion proceedings
• The role of municipalities in providing alternative accommodation under ESTA and s 26(3) of the Constitution

The appeal succeeded. The cross-appeal was dismissed. The order of the Land Claims Court was set aside. An eviction order was granted against all occupier respondents except the 11th and 12th respondents (who had passed away). The first to tenth and thirteenth to twenty-sixth respondents were ordered to vacate the farm by 31 August 2023, with the sheriff authorized to evict them by 15 September 2023 if they failed to vacate. The Drakenstein Municipality (27th respondent) was ordered to provide emergency housing suitable for human habitation with access to basic services to the affected occupiers by 31 July 2023. No order as to costs was made in either instance (LCC or SCA).

The binding legal principles established are: (1) Under ESTA s 8, termination of a right of residence must be on a lawful ground and just and equitable, considering procedural fairness and substantive factors. (2) Under ESTA s 10(1)(c), a fundamental breach of the relationship justifying eviction exists where the occupier's conduct has rendered it practically impossible to restore the relationship due to lack of mutual trust, assessed by considering the history of the relationship, seriousness of the conduct, and its effect on the relationship. (3) In motion proceedings, bald denials in the face of detailed and substantiated allegations (including photographic evidence) do not raise genuine disputes of fact and may be rejected under an exception to the Plascon-Evans principle where the denial is not real, genuine or in good faith. (4) Res judicata requires that the same issue of fact or law was finally determined in the earlier judgment; dismissal of an application due to disputes of fact without adjudication on the merits does not constitute a final determination for res judicata purposes. (5) Events and conduct occurring after an earlier judgment can form the basis of a new eviction application and are not barred by res judicata. (6) Municipalities have a constitutional and statutory duty under s 26(3) of the Constitution and ESTA to provide suitable alternative emergency accommodation to occupiers facing eviction, and eviction orders should be made conditional on such provision where occupiers will otherwise be rendered homeless. (7) An eviction order may be just and equitable under ESTA even where there is an irretrievable breakdown of the relationship, significant hardship to the landowner, uninhabitable conditions, and provision of alternative accommodation, notwithstanding the occupiers' vulnerability and long occupation.

The Court made several non-binding observations: (1) It expressed sympathy for the occupiers' plight, acknowledging they had considered the farm their home for many years, but emphasized this could not override the rights of the landowner where the relationship was irretrievably broken. (2) The Court noted it would be inhumane to sanction continued long-term occupation of dilapidated, uninhabitable dwellings with asbestos roofing and collapsing walls. (3) The Court observed that requiring the Trust to renovate the cottages and bear those costs, in addition to already incurred security and damage costs, would impose unfair additional hardship. (4) The Court noted that the requirement of 'the same persons' for res judicata may not be confined to strict identity of parties or privies, and may extend to situations where there is sufficient commonality of interest and the person had a fair opportunity to participate, but did not decide this issue definitively. (5) The Court emphasized that courts should be consistent in not awarding costs on appeal in ESTA matters absent special circumstances, and that indigent occupiers should not be mulcted with costs. (6) The Court observed that the magistrate's failure to attach actual signed employment contracts and lease agreements was a procedural deficiency in the earlier application, but this did not preclude a fresh application based on new grounds. (7) The Court noted approvingly that a probation officer's recommendation for mediation was unrealistic where there was a clear history of mistrust and a deteriorating relationship with no interest from occupiers in mending it.

This case is significant for clarifying the application of ESTA in eviction matters, particularly: (1) The interpretation of s 8 and s 10(1)(c) regarding termination of rights of residence based on fundamental breach of the social relationship between landowner and occupiers. (2) The approach to disputes of fact in motion proceedings under the Plascon-Evans principle, confirming that bald denials in the face of detailed, substantiated allegations do not create genuine disputes of fact. (3) The requirements for successfully invoking the defence of res judicata, emphasizing that the same issue must have been finally determined in the earlier judgment—mere dismissal on procedural grounds or due to unresolved factual disputes does not satisfy this requirement. (4) The constitutional and statutory duty of municipalities to provide alternative emergency accommodation to evicted occupiers under s 26(3) of the Constitution and ESTA, even where budgetary and land availability constraints exist. (5) The balancing of interests between landowners and vulnerable occupiers, emphasizing that eviction must be just and equitable but that irretrievable breakdown of trust, hardship to the landowner, and uninhabitable conditions can justify eviction where alternative accommodation is provided. The judgment underscores that courts must avoid mechanical application of legal principles and must consider the substantive fairness and humanity of eviction orders, while also respecting property rights and the impossibility of restoring irreparably broken relationships.