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[2018] ZAWCHC 193
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Williams and Another v Standard Bank of South Africa Ltd and Another (18088/2015) [2018] ZAWCHC 193; 2022 (6) SA 629 (WCC) (3 May 2018)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
CASE
NO: 18088/2015
In
the matter between:
CHARLES
WILLIAMS
First Applicant
ROSETTA
ADELE
WILLIAMS
Second Applicant
and
THE
STANDARD BANK OF SOUTH AFRICA LTD
First Respondent
SHERIFF
OF THE HIGH COURT, KUILSRIVER NORTH
Second Respondent
JUDGMENT
DELIVERED ON 3 MAY 2018
DAVIS,
AJ
1.
The question to be decided in this case
is whether an execution creditor who obtained a court order entitling
it to execute against
a judgment debtor's residential immovable
property
before
22
December 2017 is obliged to comply with the provisions of Rule 46A of
the Uniform Rules of Court ("the Rules"), which
came into
effect on that date. In other words, does Rule 46A have retrospective
effect?
2.
The applicants are the owners of the
immovable property situated at [....] D[....] Street, Kraaifontein
("the property"),
which is their primary residence. The
first respondent ("the bank") holds a mortgage bond over
the property. On 22 May
2017 this Court granted summary judgment
against the applicants in favour of the bank for:
2.1.
payment of the amount of R 1 951 190.89
and costs of suit;
2.2.
an order declaring the property
specially executable;
2.3.
an
order directing that no sale in execution of the property could take
place on a date earlier than 6 months from the date of the
court
order, but authorising the bank to issue a writ of execution and the
sheriff to attach the property in the interim.
[1]
3.
I shall refer to as the order granted by
Burger AJ on 22 May 2017 in the context of summary judgment
proceedings as "the order".
4.
By virtue of the terms of the order, the
bank could not sell the property in execution before 22 November
2017. On 6 November 2017
the Registrar issued a writ of execution in
respect of the property. On 5 February 2018 the bank's attorneys
prepared a notice
of sale in execution in respect of the property in
which the sale was arranged for 28 March 2018 and it was stated that
the property
would be sold without reserve to the highest bidder.
5.
On 28 February 2018 the second
respondent ("the sheriff') served on the applicants the
conditions of sale in execution in respect
of the property ("the
conditions of sale"). It is common cause that the conditions of
sale did not contain a reserve
price.
6.
On 23 March 2018 the applicants launched
an urgent application for an interdict preventing the respondents
from proceeding with
the sale in execution which was scheduled to
take place at 10h00 on 28 March 2018. The application was set down
for hearing on
27 March 2018 and, due to the number of urgent
applications on the roll for that day, argument commenced late in the
day at approximately
17h00.
7.
Mr Zimmermann, who appeared for the
applicants, contended that the conditions of sale, which were
prepared and served after Rule
46A came into operation, did not
comply with the new rule because they stipulated that the property
shall be sold without reserve
to the highest bidder, and the Court
had not been approached to exercise its discretion in terms of Rule
46A regarding the setting
of a reserve price.
8.
Mr Jonker, who appeared on behalf of the
bank, argued a) that the bank had acquired a vested right to sell the
property without
a reserve price in terms of the order, which right
was not affected by the introduction of Rule 46A, and b) that the
applicants
had failed to approach the court in terms of Rules
46(8)(d), 46A(8) or 46A(9)(a) to request the Court to set a reserve
price or
impose other appropriate conditions of sale.
9.
As regards Mr Jonker's first contention,
namely that the bank had acquired a vested right to sell the property
in execution without
a reserve price, Mr Zimmerman countered with the
submission that the bank only had a vested right to sell the property
in execution,
but not in the procedure regulating the sale in
execution. He argued that Rule 46A is purely procedural, and that its
provisions
apply prospectively from 22 December 2017, even where the
order authorising execution was granted before that date.
10.
Having heard these competing arguments
the answer was not readily apparent and I felt that the matter
warranted further consideration.
I found myself constrained to grant
an urgent interdict as prayed, not because I had decided the matter
in favour of the applicants,
but merely to prevent the injustice
which would result if the sale in execution went ahead and I
subsequently found that the conditions
of sale were indeed
non-compliant with the Rules.
11.
I therefore indicated to the parties
that I would grant an interdict to preserve the
status
quo,
and would prepare a written
judgment dealing with the issue at hand, which would form the basis
for declaratory relief and the determination
of costs. Mr Jonker
assured me that such a judgment would by no means be moot, inasmuch
as the interdictory relief sought was confined
to the sale in
execution scheduled for 28 March 2018, and the bank still needed to
know whether it was entitled to sell the property
in execution in
terms of the order without taking any further steps in terms of Rule
46A.
THE
AMENDMENT TO RULE 46 AND THE INTRODUCTION OF RULE 46A
12.
The
Rules Board for Courts of Law amended the existing Rule 46 and
introduced Rule 46A in terms of Government Notice No. R. 1272
dated
17 November 2017 ("the notice").
[2]
The notice is silent as to whether Rule 46A is to operate
retrospectively in the sense of applying to pending matters.
13.
Rule
46A introduces new requirements regulating execution against
residential immovable property. In terms of the new rule an execution
creditor seeking to execute against the resrdential immovable
property of a judgment debtor is obliged to apply to Court, on notice
to the judgment debtor and any other affected parties, for an order
declaring the property executable.
[3]
14.
It
is incumbent upon the execution creditor to persuade the Court, on a
consideration of all relevant factors, that execution against
the
property is warranted.
[4]
15.
When
considering such an application, the Court must consider whether
there are alternative means by which the judgment debtor may
satisfy
the judgment debt other than execution,
[5]
and may only grant an order authorising execution against the primary
residence of a judgment debtor if there are no other satisfactory
means of satisfying the judgment debt.
[6]
16.
When
authorising execution against a primary residence in terms of Rule
46A, the Court is empowered
inter
alia
to
order the inclusion of appropriate conditions in the conditions of
sale,
[7]
to set a reserve price
for the sale having regard to the factors listed in Rule
46A(9)(b)
[8]
, and generally to
make any appropriate order.
[9]
17.
Rule
46A affords the judgment debtor, and any other affected party, the
opportunity to oppose the application to declare the property
executable, or to make submissions which are relevant to the making
of an appropriate order, for instance in relation to the setting
of a
reserve price.
[10]
18.
Rule
46A confers a discretion on the Court to determine whether or not it
would be appropriate to authorise execution against residential
property, which discretion is to be exercised judicially having
regard to the factors set out in the rule. It seems to me that
the
fundamental task of the Court seized with an application in terms of
Rule 46A is to ensure that execution against the primary
residence of
the judgment debtor would not be disproportionate in all the
circumstances of the case - hence the requirement that
execution may
only be authorised when there is no other satisfactory way to satisfy
the judgment debt.
[11]
19.
It seems to me that the Court is
required, in the exercise of its discretion under Rule 46A, to strike
a just and equitable balance
between the rights and interests of the
execution creditor, the judgment debtor and any other affected
parties, such as the local
authority in the case of a rateable
property or the body corporate in a sectional title scheme.
RELEVANT
LEGAL PRINCIPLES
20.
In
National
Iranian Tanker
Co
v
MV Pericles
GC
[12]
Corbett CJ penned the following pithy summary of the law relating to
the retrospective effect of legislation:
"There
is at common law
a
prima
facie rule of construction that
a
statute (including
a
particular provision in
a
statute) should not be interpreted
as
having retrospective effect unless
there is an express provision to that effect or that result
is
unavoidable on the language used.
A
statute is retrospective in effect if it takes away or impairs
a
vested right acquired under
existing laws or creates
a
new obligation or imposes
a
new duty or attaches
a
new disability in regard to
events already past
. (This
definition appears to merge two canons of interpretation: the
presumption against retrospectivity and the presumption against
interference with vested rights. This, however, is not of great
moment,
as
both
canons lead in the same direction: see Cape Town Municipality v F
Robb
& Co
Ltd
1966 (4) SA 345
(C) at 350F - 351D.)
There
is an exception to this rule in the case of
a
statute
which
is
purely
procedural and operates prospectively on all matters coming before
the Court after the passing of the statute, though even
here it is
the intention of the Legislature which is paramount. Moreover,
a
provision
which is procedural in form may in essence affect the substantive
rights of persons."
[13]
[Emphasis
added]
21.
Thus
statutes which affect substantive rights are presumed not to have
retrospective effect, but statutes which deal with matters
of
procedure are treated differently, since
"no
person has
a
vested
right in any particular course of procedure, but only
a
right
to prosecute of defend
a
suit
according to the rules for the conduct of an action for the time
being prescribed.
"
[14]
Where a new law effects procedural changes it is presumed that the
law will apply to every case subsequently tried, regardless
of when
the case commenced or cause of action arose.
[15]
22.
However,
as Kentridge AJ pointed out in
S
v Mhlungu and Others ("Mhlungu"),
[16]
it
is not always easy to decide whether a new law is purely procedural
or whether it also affects substantive rights. As Lord Brightman
observed in
Yew
Bon Tew v Kenderaan Bas Mara,
[17]
procedural statues may do far more than regulate the course of
proceedings and may impact on substantive aspects of the case. He
suggested that, rather than attempting to label a new provision as
substantive or purely procedural, one should simply ask whether
or
not it would impair existing rights and obligations if applied
retrospectively in a particular case.
[18]
Lord Brightman's remarks in this regard were referred to with
approval by Kentridge AJ in
S
v Mhlungu.
[19]
23.
And
even where it is clear that one is dealing with a statute which
introduces procedural changes, one must bear in mind the distinction
drawn by Olivier JA in
Unitrans
Passenger (Pty) Ltd t/a Greyhound Coach Lines v Chairman, National
Transport Commission, and Others; Transnet Ltd (Autonet
Division) v
Chairman, National Transport Commission, and Others (“Unitrans”)
[20]
between
the case where the statute amending existing procedures comes into
effect
b
efore
the procedure has been initiated, and the case where the amending
statute comes into effect
after
the procedure has already been initiated and is pending.
24.
In
the first situation, the new procedure usually applies to any action
taken after the date on which the amending legislation takes
effect,
unless a contrary intention appears from the legislation. In the
second situation, where the amending statute took effect
after
the
procedure was initiated, the rule is that the existing (old)
procedure remains intact, unless a contrary intention appears from
the amending legislation.
[21]
25.
In
Unitrans
(supra)
at para [23] Olivier JA,
dealing with the question of whether fairness and equity should be
considered in deciding whether legislation
amending procedure is
applicable to pending applications or actions, made the following
observation which is particularly relevant
in this case:
"Of
course, there may be cases where an amending statute introduces new
procedural provisions which may, on
a
proper interpretation, leave
intact
the steps that have already been taken and operate prospectively
only. But that would not be the position where prospective
operation
would render abortive the steps taken in the past
-
unless
such was the clear intention of the legislator. To apply the statute
to the pending application in the present case would
extinguish there
and then the ability to proceed with the application.
It
would nullify the steps already taken by lnterkaap.
"
[Emphasis added]
26.
Finally,
the principle that legislation will only affect future matters and
will not take away existing rights, or impose new duties
or
obligations in respect of past facts, is founded on the rule of law.
It therefore follows that if a court is left in any doubt
as to the
retrospective effect of a provision, the presumption against
retrospectivity would not be rebutted.
[22]
EVALUATION
27.
Applying these principles to the present
case, it seems to me that the determination of the issue does not
depend on the characterisation
of Rule 46A as procedural but rather
on the answers to the following questions:
27.1.
Firstly, would Rule 46A, if applied to
the bank's case, have the effect of:
27.1.1.
impairing the bank's vested rights;
and/or
27.1.2.
imposing a new obligation or duty on the
bank; and/or
27.1.3.
nullifying the procedural steps already
taken by the bank?
27.2.
Secondly, did the bank initiate
execution proceedings prior to the commencement of Rule 46A?
28.
As a starting point, one must ask what
the bank's vested rights were before Rule 46A came into effect on 22
December 2017. In terms
of the mortgage bond the bank had a
contractual right to seek an order declaring the property executable
in the event of default
by the applicants. This contractual right was
enforced by means of the order, which authorised the bank to sell the
property in
execution after 6 months from the date of the order, and
to immediately issue a writ of execution and attach the property in
the
interim. The 6 month period referred to in the order expired at
midnight on 22 November 2017, and the bank therefore had a vested
right on 23 November 2017 to sell the property in execution.
29.
As
at 23 November 2017 Rule 46(12) in its un-amended form stipulated
that the sale in execution would be without reserve and that
the
property would be sold to the highest bidder. Thus the bank was
entitled in terms of the procedure then applicable to sell
the
property without a reserve price. But this does not mean that the
bank had a vested right to sell the property without a reserve
price,
for no person has any vested right in a particular course of
procedure.
[23]
30.
One must also ask, however, whether Rule
46A, if applied to the bank's case, would have the effect of imposing
additional obligations
or duties on the bank, or rendering nugatory
the procedural steps already taken by it. In these regards the clear
answer, I think,
is "yes".
31.
If
Rule 46A were held to apply in this case the bank, having already
been authorised in terms of the order to sell the property
in
execution, would be forced to bring a further application for
authorisation to sell the property in execution. Not only would
this
render nugatory the previous procedural steps taken by the bank to
obtain leave to execute against the property, but the bank
would also
be forced to meet the more onerous requirements of Rule 46A,
including the production of additional documentation
[24]
and persuading the Court that there is no other satisfactory means of
satisfying the judgment debt.
[25]
32.
The
application of Rule 46A in this case would also mean that the bank is
subject to the possible imposition of a reserve price,
and to delays
in execution in the event that any reserve price set is not achieved
at the sale and the matter has to be reconsidered
by the Court.
[26]
These are impairments or limitations on the bank's right (hitherto
untrammelled) to sell the property in execution.
33.
Turning to the question whether the bank
initiated steps to execute against the property prior to 22 December
2017 so that execution
proceedings could be said to be pending when
Rule 46A commenced, the answer, in my view, is also clearly "yes".
34.
Execution is the process for enforcing
judgments. It commences with the issue of a writ of execution in the
form prescribed by the
Rules. The bank's writ of execution in respect
of the property was duly issued by the Registrar on 6 November 2017.
It therefore
follows, in my view, that the bank initiated execution
proceedings in terms of the order prior to the commencement of Rule
46A,
and that the execution proceedings initiated by the bank were
already pending when Rule 46A came into operation. As I have already
indicated, the application of Rule 46A to the bank's case in these
circumstances would have the effect of undoing the procedural
steps
already taken by the Bank in connection with execution, including the
issue of the writ of execution.
35.
The answers to the questions posed above
indicate that Rule 46A does not apply to execution proceedings which
are pending in terms
of prior execution orders at the time when Rule
46A came into effect.
36.
Moreover, there is no indication
whatsoever in the notice that Rule 46A is intended to have
retroactive effect. One can assume that
the Rule Board for Courts of
Law is familiar with the presumptions against interference with
existing rights and the rule that
old procedural rules continue to
apply in respect of matters which are the subject of pending legal
proceedings. Had it been intended
that Rule 46A would apply
retroactively to pending cases, this would have been clearly
expressed in the notice.
37.
To sum up: I consider that Rule 46A is
not purely procedural in nature and that, if applied retroactively to
the bank's case, it
would have the effect of impairing the bank's
untrammelled right to sell in execution by imposing new duties and
burdens on the
bank. It would also have the effect of undoing all the
procedural steps already taken by the bank in regard to an execution
process
initiated under the old rule. The injustice and
impracticality of applying Rule 46A to such a case is obvious. Given
that there
is no indication that the provision was intended to apply
to pending execution proceedings, I consider that the presumptions
against
retrospectivity and interference with existing rights have
not been rebutted.
38.
I am therefore of the view that Rule 46A
does not apply to execution proceedings which commenced and were
pending in terms of prior
execution orders before Rule 46A came into
operation on 22 December 2017.
CONCLUSION
39.
In the light of the conclusion which I
have reached, it is not necessary for me to deal with the alternative
submissions advanced
by Mr Jonker regarding the applicants' failure
to approach the Court for relief in terms of Rules 46(8)(d), 46A(8)
or 46A(9)(a.)
40.
In the result the bank is entitled to an
appropriate declaratory order, and the applicants must bear the costs
of this application.
41.
I therefore make the following order:
1.
It is declared that:
1.1.
The amended Rule 46 and the new Rule 46A
introduced in terms of Government Notice No. R. 1272 dated 17
November 2017 ("the
amendments") do not apply in respect of
the execution proceedings initiated by the first respondent in terms
of the Order
of this Court granted under case number 18088/15 on 22
May 2017 and the writ of execution issued in terms thereof on 6
November
2017 ("the execution proceedings").
1.2.
The first and second respondents are
authorised to proceed with the sale in execution of Erf [....]
Kraaifontein, in the City of
Cape Town, Division Paarl, Western Cape,
situate at [....] D[....] Street, Kraaifontein ("the property")
in terms of
the first respondent's notice of sale in execution dated
5 February 2018 ("the notice of sale") and the conditions
of
sale in execution of immovable property delivered to the
applicants on 28 February 2018 ("the conditions of sale").
2.
The applicants are ordered to bear the
first respondent's costs of suit on the party and party scale.
DM
DAVIS
Acting
Judge of the High Court
[1]
An order granting leave to execute against residential immovable
property but suspending the sale in execution for a period of
six
months is commonly referred to in this division as a "Rogers
Order'', in honour of Rogers J who introduced the salutary
practice.
[2]
Published on 17 November 2017 in Government Gazette Number 41257.
[3]
Rule 46A(3)(b) states that:
…
.
"Every
notice of application to declare residential immovable properly
executable shall be
-
(b)
on notice to the judgment debtor and to any other patty who may be
affected by the
sale in execution, including the entities referred
to in Rule 46(5)(a)
[preferent creditors, local authority, body
corporate):
Provided that the court may order service on any
other patty it considers necessary."
[4]
Rule 46A(2)(b) provides that:
"A
court shall not authorise execution against immovable properly which
is the primary residence of
a
judgment debtor unless the
court. having considered all relevant factors, considers that
execution against such property is warranted."
[5]
Rule 46A(2)(a)(ii).
[6]
Rule 46A(8)(d).
[7]
Rule 46A(8)(a).
[8]
Rule 46A(8)(e).
[9]
Rule 46A(8)(i).
[10]
Rule 46A(6)(a).
[11]
See
Jaftha
v Schoeman and Others; Van Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005
(2) SA 140
(CC) at para
[59]
where Mokgoro J stated that
"[l]f
there is no other reasonable way by which the debt may be satisfied,
an order authorising the sale in execution would
ordinarily be
appropriate unless the ordering
of
that sale in the
circumstances
of
the case would be grossly disproportionate.”
See,
too,
Gundwana v Steko Developments and Others
2011 (3) SA 608
(CC) at para [54] where it was stated that:
"It
must be accepted that execution in itself is not an odious thing. It
is part and parcel of normal economic life. It is
only when there is
disproportionality between the means used in the execution process
to
exact payment
of
the judgment debt, compared
to
other available means to attain the same purpose. that alarm
bells should start ringing. If there are no other proportionate
means
to attain the same end, execution may not be avoided."
[12]
1995 (1) SA 475 (A).
[13]
At 483H - 484B.
[14]
Per Lord Brightman in
Yew
Bon Tew v Kenderaan Bas Mara
[1983]
1AC 553 (PC) ([1982]
3 All ER 833)
at 836, as quoted with approval
in
Minister
of Public Works v Haffejee NO
[1996] ZASCA 17
;
1996
(3) SA 745
(A) at 752.
[15]
S
v
Mhlungu and Others
[1995] ZACC 4
;
1995
(3) SA 867
(CC) at para
[66]
.
[16]
[1995] ZACC 4
;
1995 (3) SA 867
(CC) at para
[66]
.
[17]
[1983] 1AC 553 (PC) ([1982]3 All ER 833) at 836 All ER.
[18]
At 838 All ER.
[19]
Supra
at
para [66].
[20]
1999 (4) SA 1
SCA at para [16].
[21]
Unitrans
(supra)
at
paras [17] - [19], referring to
Bell
v Voorsitter van die Rasklassifikasieraad en Andere
1968
(2) SA 678
(A) in regard to the second type of case.
[22]
Kaknis
v Absa Bank Ltd and Another2017
(4)
SA 17 (SCA) at para [39].
[23]
Yew Bon
Tew v Kenderaan Bas Mara (supra)
at
836 (All ER), referred to with approval in
Minister
of Public Works v Haffejee NO
[1996] ZASCA 17
;
1996
(3) SA 745
(A) at 752.
[24]
Rule 46A(5).
[25]
Rule 46A(8)(a).
[26]
Rule 46A(9)(c) and (d).