About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2016
>>
[2016] ZAWCHC 202
|
|
De Vos v Adams and Others (3133/2015) [2016] ZAWCHC 202 (6 December 2016)
IN THE HIGH COURT
OF SOUTH AFRICA
(
WESTERN CAPE
DIVISION, CAPE TOWN
)
CASE
NUMBER
: 3133/2015
DATE
:
6 DECEMBER 2016
In
the matter between:
VERONICA
LORRAINE DE
VOS
Applicant
and
LINDSAY
GRAEME
ADAMS
1
st
Respondent
ABSA
BANK
LIMITED
2
nd
Respondent
JACOBA
M DU
PLESSIS
3
rd
Respondent
ANDRE
MULLER
4
th
Respondent
REGISTRAR
OF DEEDS, CAPE
TOWN
5
th
Respondent
JUDGMENT
DAVIS,
J
:
INTRODUCTION:
During
2003 the applicant (“De Vos”) and her late husband, who
were married in community of property, purchased a property
known as
Erf 1704, Blue Downs (“the property”) in terms of a
written deed of sale. On 6 June 2003 the property
was
transferred in the joint names of De Vos and her late husband.
During June 2008 first respondent (“Adams”)
was
approached by one Francis Rose regarding what was referred to in the
papers “as an investment proposal”.
2
Adams
provided the terms and conditions of the investment proposal in
papers which are before this Court. Without going into
a
detailed description thereof, it appears that Rose had a number of
clients. Adams was advised that the De Vos’s were
two of
these clients. Rose claimed that they were in financial
difficulty and that Adams’ intervention was required
in terms
of the scheme which Rose had developed in order to mitigate the
financial difficulties that his clients encountered.
Adams
sets out in his papers the following: in or about 2001, 2002 he met
Rose at Perm / Old Mutual Bank in Plumstead where he was
offered
services as a financial advisor and he became a client of Rose.
Through the course of the business dealings he was
contacted by Rose
who advised him that he had taken up employment at Bond Bashada in
Cape Town.
In
2008 Rose contacted him again and advised him that he wished to
arrange a meeting in respect of an investment proposal.
This
meeting took place during June 2008 at offices situated at the
Convention Centre in Cape Town. Rose advised Adams of
an
investment scheme which involved a number of Rose’s clients
which included the De Vos’s. Rose told Adams that
his
clients were willing to transfer their properties into Adams’
name for a period of 9 months to a year to allow them to
“find
their feet financially”.
3
The
clients would fund the costs involved in the transfers. Adams
was advised, according to his version, that after 9 months
to a year
the properties would be transferred back to his clients at their
cost. Adams was told that he would be compensated
for his
efforts and that the client would make payment of some 10% on the
value of the property together with a further discretionary
payment
when the property was transferred back into their names.
Adams
was advised by Rose that the investment scheme was legitimate and
that an attorney would oversee the entire process.
Adams met
Rose at the offices of Du Plessis and Partners (the third respondent)
where he was handed a bundle of documents by attorney
Du Plessis and
requested to sign and various indicated processes.
Adams
handed over a copy of his identity document and utility bills as
requested by attorney Du Plessis. Adams noted that
there were
signatures on the documents which he believed to be those of the De
Vos’s. He signed the documents on his
view because he
believed that the sellers were willing participants in the scheme as
advised by Rose and Du Plessis.
4
The
property was transferred into the name of Adams, a mortgage bond was
duly registered with second respondent in the amount of
R342 000.00
which was paid to the bond registration attorneys on 29 December
2008. According to Adams he received none of
the proceeds
thereof. No payments were made in terms of the mortgage
loan agreement and eventually it appears that
the property was sold
in execution of the mortgage debt. To this point I shall return
later.
In
her application before this Court De Vos, in her personal capacity,
seeks an order setting aside the sale in execution of the
property
declaring that she, together with her late husband, were the owners
of the property, that the subsequent transfer to fourth
respondent
pursuant to the sale in execution was to be declared null and void
and the Registrar of Deeds be directed to amend the
records
accordingly.
The
dispute which confronts this Court with respect to the relief sought
by the applicant turns on a series of arguments which had
been raised
by the fourth respondent. It was the fourth respondent who had
bought the property on 8 April 2014 at a sale
in execution held by
the Sheriff of the High Court pursuant to the order declaring the
property executable in the matter of Absa
Bank (“second
respondent”) and Adams.
5
There
is no dispute that fourth respondent was a bone fide purchaser of the
property, that fourth respondent had no knowledge of
any claims by
the applicant at the time of transfer of the property into the name
of applicant. For these reasons the fourth
respondent has
approached this Court in opposition to the relief sought by the
applicant based essentially on two grounds namely
objections which
relate to the application of the
rei
vindicatio
and
a defence of prescription. The other respondents abide the
decision of the Court.
Mr
Du Preez, who appeared on behalf of the fourth respondent, submitted
that immovable property validly sold in execution of judicial
sale
cannot, as a general rule, after registration of the property, be
vindicated in terms of the
rei
vindicatio
from a
bona
fide
purchaser. He referred, for
example, to the judgment in
Oriental
Products (Pty) Limited v Pegma 178 Investment Trading CC
2011 (2) SA 508
(SCA) in which Shongwe, JA held at para 12:
6
“
It
is trite that our law has adopted the abstract system of transfer as
opposed to the casual system of transfer. Under the
casual
system of transfer a valid cause (
iusta
causa
) giving rise to the transfer is a
sine qua non
for the transfer of ownership. In other words if the cause is
invalid e.g. non-compliance with former requirements the transfer
ownership will be void ... under the abstract system the most
important point is that there is no need for a formerly valid
transaction
provided that the parties are ad idem regarding the
passing of ownership.”
See
however the majority judgment of Harms DP at (illegible).
The
issue benefit from further elucidation in Solberger and Schoeman, the
Law of Property (5
th
Edition) 261:
“
Property
sold in judicial sales cannot after delivery in the case of movables
or registration in the case of immovable be vindicated
from a
bona
fide
purchaser. Even when an
article is sold by mistake as belonging to a judgment debtor, the
true owner cannot vindicate it
from a
bona
fide
purchaser. Though Matthaeus
states that he or she can do so on refunding the purchase price to
the purchaser. The section
70 of the Magistrate’s Court
Act provides that a sale in execution by the Sheriff of the Court
will not in the case of movable
things after delivery thereof or in
the case of immovable things after registration or transfer, be
liable to be impeached as against
the purchaser in good faith and
without notice of any defect.”
7
Turning
specifically to the
rei vindicatio
it is clear that there are
three requirements which the owner must prove on a balance of
probabilities, in order to succeed with
the particular action.
Firstly, the applicant must show his or her ownership in the
property. In the case of immovable
property it is sufficient as
a rule to show the title in the land is registered in his or her
name. Secondly, the property
must exist, be clearly
identifiable and must not have been destroyed or consumed.
Thirdly, the defendant must be in possession
or detention of the
property at the moment that the action is instituted.
Significant
the authority show that the view that the
rei vindicatio
can
be instituted against a person who alienated property fraudulently
(conscious of the owner’s claim is unacceptable since
it is
ignores the boundaries between the
rei vindicito
and the
acgio
ad exhibendum
. See Wille’s,
Principles of South
African Law
(9
th
Ed) at 540.
In
the present case a fourth respondent’s states:
8
“
I
bought the immovable property on 8 April 2014 in the sale in
execution held by the Sheriff of the High Court pursuant to an order
declaring the property executable in the matter of Absa Bank Limited
and Mr L G Adams ... the judgment obtained by Absa Bank
under
case number: 13613/2010 has not been rescinded and no application of
rescission has been launched and accordingly the order
declaring the
property executable and the execution sale stands unchallenged.”
Applicant
can show that ownership of the property certainly vested in her in
this sense that if the entire transaction was a fraud
(as appears to
be common cause), ownership may well still vest. See also Harms DP in
Oriental Products
at paras 26-27. Secondly, the
property is identifiable. The difficulty as Mr Du Preez
submitted correctly is
that the applicant is still in possession of
the property and the vindicatory action does not appear to be
available to a person
who is in possession of the property.
Mr
Du Preez submitted that the abstract theory of transfer works in this
case against the applicant. As Brand, JA said in
Legato
McKenna v Sheo
2010 (1) SA 35
(SCA) at
para 22:
9
“
In
accordance with the abstract theory the requirements for the passing
of ownership are two-fold namely delivery – which
in the case
of immovable property is affected by registration of transfer in the
Deeds Office – coupled with a so-called
real agreement or
“
saaklike ooreenkoms
”.
Essential elements of the real agreement or an intention on the part
of the transfer to transfer ownership and the
intention in the
transferee to become the owner of the property .. broadly stated the
principles applicable to agreements in general
also apply to real
agreements. Although the abstract theory does not require a
valid underlying contract e.g. sale, ownership
will not pass –
despite registration of the transfer – if there is a defect in
the real agreement.”
This matter has less to
do with the (illegible) theory of transfer and with the non
fulfilment of all the requirements for the …
This
therefore brings us to the second point which is raised, namely that
of prescription. The crisp question arises whether
the
applicant can apply for the cancellation of the transfer of the
immovable property and the simultaneous registration of the
property
back into his name.
10
According
to Mr Du Preez thi would have been possible but for prescription.
Indeed the analysis set out above supports this
conclusion.
Prescription is applicable in this case. It is correct that in
Absa Bank Limited v Keet
[2015] 4 All SA 1
(SCA) the Supreme
Court of Appeal held that a vindicatory claim because it was a claim
based on ownership of a thing cannot be
described as a debt as
envisaged by the Prescription Act. In this case if, as I have
held, there is no vindicatory action
because of the inability of the
applicant to meet all the requirements thereof.
The
question of prescription thus becomes critical to the resolution of
the case and as to whether in fact any of the relief sought
by the
applicant can be granted in this matter.
Applicant
contends that on the available evidence, the applicant only became
aware of the fraud during 2014 and not earlier.
The fact that
she received a municipal account to which I shall make reference
presently, did not warrant a conclusion that she
was aware of the
fact that her property was transferred. She never took part in
action disposing of property so she had no
reason to even consider
the possibility that the immovable property was no longer registered
in her name.
11
The
applicant makes it clear that she always accepted that the incorrect
description of the first respondent’s name on the
municipal
accounts must have been a mistake. According to the applicant
she only was possessed of all the facts during 2014
when her attorney
of record presented her with the product of an investigation.
Therefore, according to Mr Montzinger, who
appeared on behalf of the
applicant, the applicant was only possessed of all the facts from
which the debt arose during 2014.
By
contrast, Mr Du Preez contested this particular version relying, for
example, on
Rens v Standard Bank of South Africa and Others
[2015] ZAECPHEC 12 (17 March 2015) at para 12:
“
On
the facts before me the applicant knew of the fraud in 2008.
Someone else ... had become the owner of the property which
he had
inherited. This occurred because the seventh respondent who had
no entitlement to the property had sold it.
There was no legal
basis on which the seventh respondent could have lawfully concluded
an agreement of sale of the property since
she was not the owner of
the property nor a beneficiary of the will and nor was she the
surviving spouse as she had misrepresented
to the Master. The
letter of authority was attached to the agreement of sale. The
applicant therefore became aware
of the fraud and the identity of the
debtor and the facts from which the debt arose at the end of 2008.
The fact that applicant
visited the office of the sixth respondent to
find out what was happening with the matter does not assist her.
She ought
to have enforced her claim much sooner. It is
improbable that she did not know of her rights or she is naive in the
extreme
in which case such knowledge can be imputed to her.”
12
THE
LAW
The
relevant section of the Prescription Act, namely section 12 reads
thus:
“
When
prescription begins to run:
(1)
Subject to the provisions of subsections
(2), (3) and (4) prescription shall commence to run as soon as a debt
is due.
(2)
If the debtor wilfully prevents the
creditor from coming to know of the existence of the debt,
prescription shall not commence to
run until the creditor becomes
aware of the existence of the debt.
The
debt shall not be deemed to be due until the creditor has knowledge
of the identity of the debtor and of the facts from which
the debt
arises, provided that a creditor shall be deemed to have such
knowledge if he could have acquired it by exercising reasonable
care.”
13
Mr
Du Preez submitted that a simple visit to an attorney would have
enabled the applicant to enforce her rights against Adams and
or the
attorney (third respondent) who acted for Rose. There could be
no logical explanation for the property to be transferred,
on the
applicant’s own version, and hence she has shown an
unreasonable reluctance to take action resulted in the prescription
of the claim.
This
dispute requires a more detailed account of applicant’s
explanation which appears in the founding affidavit:
“
During
December 2009 I received a municipal account from the City of Cape
Town which reflected the details of the immovable property
were
addressed to a certain Mr L G Adams. I later learned that Mr L
G Adams is the same person as the first respondent as
cited in this
application .. I was certain that the City had made a mistake as I
have heard on numerous occasions in the news and/or
from other
residents that these kinds of mistakes are not uncommon and that the
City of Cape Town sometimes guilty of such honest
mistakes. I
did not make much of it and accepted that it was just a mistake.
Phillip de Vos, (her brother-in-law),
did however
14
attend
the City Municipal Offices on my behalf in an effort to determine why
my municipal account was in the name of the first respondent.
The municipality could be of no assistance to Phillip and referred
him to the Deeds Office (sic). Phillip then attended to
the
Deeds Office and was advised that the property had been transferred
on 22 December 2008 in the name of first respondent.
This was
extremely surprising news as I had never been involved in the
transfer of my property to the first respondent. The
transfer
of the immovable property to the name of the first respondent also
seemed to be a mistake and I did not understand what
it meant or what
to do with the information. In my mind I was however satisfied
that neither my late husband nor me has ever
sold the property and
that it must be a mistake. Phillip also determined the second
respondent has registered a mortgage
bond over the property
simultaneously with the registration of the transfer of the immovable
property into the name of first respondent.
Phillip then
attended various branches of the second respondent as well as its
head office in an attempt to determine how it came
to be that my
property was transferred out of our name without our knowledge and
consent. Phillip has received little or
no assistance from the
second respondent ...
15
I
pause to mention that I have never met or spoken to the first
respondent, I did not have any idea what he looks like and is in
no
way related to him. The first respondent has also never at any
stage occupied the property. Phillip also made use
of the
assistance of a certain Mr Shakier Lewin of African Consumers
Solutions in an attempt to get to the bottom of what we all
believed
up until that stage to have been a mistake. Lewis addressed at
least two letters to the second respondent during
August 2012.
The letters addressed to the second respondent at least seemed to
have stayed the sale of execution at the time.
I am not
currently in possession of these letters at the time I am deposing to
this affidavit ... What is significant though is
the attorneys of the
second respondent Fourie, Basson, Veldtman Attorneys only responded
to these letters during on 6 January 2014
(sic) .. it was therefore
apparent that as late as January 2014 the second respondent according
to the investigation could not
find any irregularities in the process
of the transfer of the property to the first respondent.”
Applicant
concludes:
“
It
was only during the course of 2014 after all the information gathered
my attorney of record it became apparent to me that I have
been the
victim of a clear fraud.”
16
By
contrast fourth respondent says:
“
Applicant
became aware that the property was transferred to a third party L G
in 2009 ... it is important to note that notwithstanding
the fact
that applicant has known since approximately 2009 that the immovable
property has been transferred in the name of L G
Adams, she certainly
did nothing about the situation. The applicant has waited for
approximately 6 years to challenge the
transfer of the immovable
property in question into the name of L G Adams. At no cost to
the applicant she would have been
able to report the alleged fraud to
the SAPS which she has for more than approximately 6 years failed to
do.”
Lawsa,
Volume 21, paragraph 125, (illegible) that the proviso of the section
12(3) of the Prescription Act (to which I have made
reference)
provides that a creditor will be deemed to have knowledge of the
identity of the debtor and of the facts from which
the debt arose if
he or she could have acquired it by exercising reasonable care. The
author then says it is essential for
a debtor to allege and proof
that the creditor had or ought to have had the requisite knowledge on
the particular date if such
a debtor wishes to proceed in proving in
a particular case the date on which he or she contends prescription
began to run.
Fourth respondent alleges that the applicant had
knowledge from 2009 when she received the municipal account.
17
For
some 5 years thereafter little happened in respect of the possession
of the property. There was no interference with the
enjoyment
of her property, no communication of any kind was granted to the
applicant insofar as developments of transfer were concerned
and it
was only in 2014, according to her version, that she clearly gained
the knowledge that she had been the subject of a fraud.
The
question therefore arises to what is meant by the test of reasonable
care. I have serious doubts that the test for reasonable
care
in these circumstances, which can be attributed to an elderly
pensioner living in Eerste River, is the same as that based
on a man
or woman driving a BMW on Bishop’s Court roads.
18
I
have to take cognisance of the fact that we live in a diverse society
with litigants having very different knowledge of the law.
I also
need to take account of how alien legal and bureaucratic procedures
are for the vast majority of the population in our country.
Of
course, the applicant could, in 2009, have pursued further
enquiries. But it does appear that whilst enquiries were
pursued
they amounted to naught and no disturbance of the possession
of the property put her on her guard. In my view, it was only
in 2014 that it can confidently be said that applicant finally came
to be possessed of the requisite knowledge, to enable her to
deal
with the problem.
This
is a difficult case because the fourth respondent was a
bona fide
possessor and he, too, is a victim of the same fraud which has
engulfed applicant.
I
do not consider however that fourth respondent is without a remedy.
Although third respondent deposed to an affidavit, she
made no
appearance in this Court. If the balance of the papers are read
as a whole, it appears to be common cause amongst
all the other
parties (including Mr Adams who was either extremely naive or
alternatively part of the fraud) that Mr Rose and third
respondent
were involved in a fraudulent scheme which gave rise, inter alia, to
the facts from which this particular application
is predicated.
19
It
is clear from the version as alleged, that Rose and the third
respondent contrived to dispossess innocent people of their property
for financial advantages which was to be gained by either or both of
Rose and third respondent and/or Adams. I am sending
a copy of
this judgment to the Law Society of the Western Cape for immediate
action to be taken as to enquire into the role of
third respondent in
this case. I am also referring this case to the National
Director of Public Prosecutions with the view
that a proper
investigation take place into what appears to be a fraudulent
scheme. In my view on these facts, fourth respondent
has a
substantial claim which it can lodge against third respondent if
these averments are proved.
For
the following reasons the order which is made is the following:
THE
SALE IN EXECUTION OF THE PROPERTY KNOWN AS ERF 1704, BLUE DOWNS, IN
THE CITY OF CAPE TOWN, DIVISION STELLENBOSCH, WESTERN
CAPE PROVINCE,
SITUATED AT 40 PAROW STREET, MALIBU VILLAGE, EERSTE RIVER (THE
IMMOVABLE PROPERTY) PREVIOUSLY HELD UNDER THE TITLE
DEED NUMBER:
T81368/08 ...(INDISTINCT) SOLD IN EXECUTION ON 8 APRIL 2014 IN
KUILSRIVIER IS SET ASIDE AND ALL SUBSEQUENT SALES
OF THE PROPERTY
THEREAFTER IS DECLARED TO BE NULL AND VOID.
20
THE
APPLICANT AND THE LATE CECIL CHARLES DE VOS ARE DECLARED TO BE THE
RIGHTFUL OWNERS OF THE IMMOVABLE PROPERTY DESCRIBED AS
ERF 1704,
BLUE DOWNS, IN THE CITY OF CAPE TOWN, DIVISION STELLENBOSCH, WESTERN
CAPE PROVINCE, SITUATED AT 40 PAROW STREET, MALIBU
VILLAGE, EERSTE
RIVER.
THE TRANSFER OF
THE SAID PROPERTY FROM THE APPLICANT AND THE LATE CECIL CHARLES DE
VOS TO THE FIRST RESPONDENT THEREAFTER THE
FOURTH RESPONDENT AND
REGISTERED BY FIFTH RESPONDENT DECLARED NULL AND VOID AND SET ASIDE.
FIFTH RESPONDENT
IS DIRECTED TO MEND THE RECORDS OF THE DEEDS REGISTRY TO GIVE EFFECT
TO THE ORDERS IN PARAGRAPH 2 AND 3 ABOVE
AND PARTICULAR FOR THE
RECORDS IN THE DEEDS REGISTRY TO REFLECT THE APPLICANT AND THE LATE
CECIL CHARLES DE VOS AS THE OWNERS
OF ONE UNDIVIDED HALF SHARE EACH
OF THE SAID IMMOVABLE PROPERTY AND EXPUNGING FROM THE RECORDS AT THE
DEEDS REGISTRY ANY REFERENCE
OF THE FIRST AND FOURTH RESPONDENTS AS
REGISTERED OWNERS OF THE SAID IMMOVABLE PROPERTY AS WELL AS THE
CANCELLATION OF THE MORTGAGE
BOND REGISTERED IN FAVOUR OF THE SECOND
RESPONDENT.
21
IN MY VIEW IN THE
LIGHT OF THE DEVELOPMENT IN THE CASE AND THE NON-OPPOSITION, THIRD
RESPONDENT IS DIRECTED TO PAY THE COSTS FOR
THIS APPLICATION.
__________________
DAVIS, J
FOR
THE APPLICANT
: ADV A MONTZINGER
INSTRUCTED
BY
: RILEY INCORPORATED
FOR
THE FIRST RESPONDENT
:
ADV M GARCES
INSTRUCTED
BY
: PARKER ATTORNEYS
FOR
THE SECOND RESPONDENT
: ADV. L WESSELS
INSTRUCTED
BY
: FOURIE BASSON &
VELDTMAN
FOR
THE FOURTH RESPONDENT
: ADV. T DU PREEZ
INSTRUCTED
BY
: FPS ATTORNEYS
DATE
OF HEARINGS
: 01 DECEMBER 2016
DATE OF
JUDGMENT
: 06 DECEMBER 2016