High Court rule securing farmers' interests in South Africa

When it comes to securing farmer's interests, judicial oversight ensured by the South African High Court's Uniform Rule 46A acts as a safeguard against arbitrary security enforcement by a lender

With Rule 46A applicable, lenders now need to consider the use and characteristics of the property rather than just ownership structure. Agricultural lending thus comes with lots of associated factors when mixed-use character and on-site residential accommodation are involved. On the lender's part, these circumstances calls for appropriate engagement with affected parties.

Trust-owned properties too fall under the purview of Rule 46A, requiring consideration of the possibilities or outcomes of juristic ownership. In cases where even though the property may apparently seem commercial, Rule 46A can apply if it includes residential occupation.

There have been cases, however, when Rule 46A fell short of application. In the case of Bestbier and Others versus Nedbank Limited which involved dispute over an immovable property owned by the Goede Hoop Trust, neither the trustees nor the farmworkers could benefit from the protection of the rule – the trustees because they had consented to judgment and were not at risk of homelessness, and the farmworkers because their tenure was independently protected by the Extension of Security of Tenure Act 62 of 1997. The property operated as a wine farm while also housing trustees and farmworkers with families.