Ownership Through Accessio

Our common law is based on Roman-Dutch law. But what does that mean and how relevant is it in this modern-day and age regarding business in South Africa? Let me answer that question by looking at the legal concept of accessio.

Written By of Cowan-Harper-Madikizela Attorneys

Accessio is a concept recognized in our common law, which is directly derived from the ancient Roman property law, that decided the process whereby a movable thing (the accessory thing) is combined with another thing (either movable or immovable) through a natural or, more commonly, an artificial process, (inaedificatio).

The accessory thing loses its independence and becomes a component of another object (the principal thing). Ownership of the accessory is lost as it loses its identity in consequence of the combination and the owner of the principal thing will thus become the owner of the accessory thing.

Tests and Case Law

Various tests have been employed to determine which of the two individual things have been joined together is the principal thing. These include the thing, with the highest value or bulk, without which the accessory cannot exist, which belongs to the person on whose account the things are joined, which is adorned by the accessory and which gives the final entity its identity, form, name or function.

The application of the principle of accession renders all accessory things attached to land ‘immovable’. Therefore, the owner of the land is also the owner of all items permanently attached to it, for instance, the structure of a house.

In real estate transactions, commercial or otherwise, this principle may lead to disharmony between the contracting parties, especially where the sale agreement does not specifically deal with the assets, which in the past, were attached to the buildings on the stand.

Insofar as the permanent attachment of a movable object to land relates, the Appeal Court has set forth three guiding factors in the case of MacDonald v Radin and The Potchefstroom Dairies and Industries Co Ltd 1915 AD 454:-

  • The nature and purpose of the attachment of the movable thing (determined objectively);
  • The manner and degree of the attachment (determined objectively). If the accessory thing loses its own identity and becomes an integral part of the principal thing or if the attachment is so secure that separation would involve substantial injury either to the accessory thing or the principal thing, the accessory thing would be regarded as immovable; and
  • The intention of the owner of the attachment (determined subjectively).

In Potchefstroom Dairies, the court applied the three criteria in a manner that is now known as the traditional approach. The court first considered whether attachment of the movable asset to the immovable asset occurred by looking at the nature and purpose of the attachment plus the manner and degree of attachment. Only if the considerations of the first two criteria produce an inconclusive result, then the stated subjective intention of the owner of the movable asset will be decisive.

The court in the Potchefstroom Dairies – case explained:-

“… the importance of the first two factors is self-evident from the very nature of the enquiry. But the importance of intention is for practical purposes greater still; for in many instances it is the determining element. Yet it is sometimes settled by the mere nature of the annexation. The article may be actually incorporated in the realty or the attachment may be so secure that separation would involve substantial injury either to the immovable or its accessory. In such cases, the intention as to permanency would be beyond dispute”.

Since the Potchefstroom Dairies case, our courts over the years have adopted the traditional approach, but in later decisions, the court developed the view that the subjective intention was the most important factor even if, based on the objective criteria, accession had taken place. 

In Melcorp SA (Proprietary Limited) v Joint Municipal Pension Fund (TVL) [1980] 1 All SA 498 (W), the court had to decide whether an elevator formed an integral part of a building wherein it was installed. The court started by saying that:

“… it would be a proper and necessary inference that the person who installed the lifts intended them to form a permanent part of the structure and consequently that they acceded to it”. 

However, the court did not stop its enquiry there and proceeded to consider the subjective intention of the owner of the lift. This the court found to be contained in the terms of the agreement between the parties, from which the court found that it was not intended by the installer that the lift will accede to the building. On that basis, the court ruled that accessio did not take place. This may seem strange but it is why agreements must be properly drafted by skilled legal practitioners.

In Konstanz Properties (Pty) Ltd v Wm Spilhaus en Kie (WP) Bpk 1996 (3) SA 273 (A), the Appeal Court held that the "new" approach was that the subjective intention with which the attachment was made (with the emphasis on whether the intention had been that the attachment should be permanent) was decisive – the nature of the movable attached and the manner of its attachment was, as a matter of degree, merely indicative of the intention with which it was attached.

In Awaiz At 110 Drakensburg CC v Chevron South Africa (Pty) Ltd 2011 JDR 1205 (GNP), it was found that petrol pumps and the underground tanks, installed at a filling station, did not become the property of the owner of the immovable property, through the process of accession or accessio. The court ruled that from, amongst other things, documents and letters plus through the actions of the owner of the movable assets, it was apparent that the intention of the owner of the movable assets, at the time of the installation, was not for the movable assets to become permanently affixed to the property.

However, in Opperman v Stanley and Another 2010 JDR 1529 (GNP), the court was faced with the following facts:-

  • The owner of the immovable property leased the property, a farm, to a tenant who in turn installed a weighbridge and augers on the farm;
  • The relevant terms of the written lease agreement were that any improvements made by the tenant to the farm, which were of a fixed nature, will become part of the farm and the tenant will have no claim against the landlord regarding the improvements.

It was argued for the Landlord, that the terms of the lease agreement, clearly show the intention of the Landlord and Tenant that any attachment to the farm will become part of the farm.

For the Tenant, it was argued that to determine whether an improvement to the farm meant that the attached movable property will become part of the farm, the court first had to determine if the improvement was of a fixed nature.

The court confirmed that the legal principle of whether movable assets have become immovable through annexation by a human agency depends upon the circumstances of each case.

However, the court here expanded the known principles of the nature of the particular article, degree, and manner of annexation, and intention of the person annexing it by including, surprisingly, a fourth element and determined that the principle of simple justice between man and man must also be considered.

The court followed the traditional approach and ruled that the improvements were of a nature that can be removed without damaging or disturbing the property, that the removal would not cause irreparable damage to the improvements, and can be utilized at another location. Lastly, the court was swayed by the fact that the tenant paid for all the improvements.

Conclusion

Property transactions relating to land in itself are complex and in most instances of high value. Throw into the mix the legal principle of accessio and it becomes apparent that proper sound legal advice will be invaluable.

Henry Korsten

Henry Korsten
Partner in Commercial, Litigation and Property

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