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[2018] ZAWCHC 141
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Burger and Another v Edenglo Holdings (Pty) Ltd and Others (6534/18) [2018] ZAWCHC 141 (4 October 2018)
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT)
CASE
NO: 6534/18
In
the matter between:
DIRK
BURGER
1
st
Applicant
NADIA
BURGER
2
nd
Applicant
and
EDENGLO
HOLDINGS (PTY) LTD
1
st
Respondent
LEONIE
DEMPERS
2
nd
Respondent
MINERVA
MERISSA BAUGAARD
3
rd
Respondent
IAN
WILLIAM JOHN BAUGAARD
4
th
Respondent
FIRST
NATIONAL BANK LIMITED
5
th
Respondent
REGISTRAR
OF DEEDS, CAPE TOWN
6
th
Respondent
WONDERFUL
CHOICE INVESTMENTS
7
th
Respondent
GERT
DE WET N.O.
8
th
Respondent
GLADYS
NKATEKO NGOBENI N.O.
9
th
Respondent
JUDGMENT
delivered this 4
th
day of October 2018
NDITA,
J
:
[1]
This an application to set aside the transfer of certain immovable
property, effected
pursuant to agreements and/or transfers alleged to
be fraudulent and/or invalid, and null and void. More
particularly, the
relief sought by the Applicants is couched in the
following terms:
“
1.
That the sale and subsequent transfer of the immovable property,
known as Erf […],
Brackenfell, situated at […] K.
Street, Protea Heights, Brackenfell, Western Cape (“the
property”) from the
Applicants to Seventh Respondent, and all
subsequent agreements and transfers relating to the property be
declared fraudulent and/or
invalid and, null and void.
2.
That the sale and subsequent transfer of the property from the
Applicants to
the Seventh Respondent, and all subsequent agreements
and transfers relating to the property be set aside.
3.
That the Sixth Respondent be authorized and directed to register the
property
in the name of the Applicants,
4.
That any party opposing the relief sought be ordered to pay the costs
of the
application.”
The
Application is unopposed by all the Respondents but the Third and
Fourth Respondents. The Fifth Respondent filed a notice
to
oppose the application, but failed to file the opposing papers, and
at the hearing of this matter, there was no appearance for
it. The
matter proceeded on the basis that it was opposed only by the Third
and Fourth Respondents (“the Respondents”).
The
Factual Background
[2]
The factual background underpinning this application is largely
uncontested, and as
can be discerned from the affidavit of the First
Applicant, Mr Dirk Burger, may be summarised thus: The Applicants,
who are married
to each other, purchased Erf […], Brackenfell
in 2002 in order to build their own family home. To this end, a
bond
in favour of SA Homeloans was registered over the property and
they built the house as planned. In 2014 the First Applicant,
who at the time was employed by the South African National Defence
Force (“SANDAF”) experienced financial difficulties,
and
the Applicants could no longer afford to pay the bond instalments.
According to the Applicants, as a result of their
failure to
make regular payments, legal action was instituted against them, and
the Second Applicant felt the pressure more because
she was residing
at the property, whilst the First Applicant was placed at the border
in Mpumalanga.
[3]
The Applicants aver that the Second Applicant came across an
advertisement by the
First Respondent, Edenglo Holdings (Pty) Ltd
(“Edenglo”), which stated that the latter assists
individuals experiencing
financial hardship, and who could not afford
their bond repayments, to save their immovable property from
execution. They
responded to the advert and were advised by Ms.
Leonie Dempers, the Second Respondent (“Dempers”), that
Edenglo would
facilitate the sale of the property to an investor.
The terms of the Edenglo scheme, as explained to them by
Dempers, were
that ‘
for all practical purposes’
,
they would remain the owners of the property and would remain in
possession or occupation of the property. This was so because
in terms of the scheme, they would be permitted to rent the property
for a period of seven years, whereafter they had a right to
buy it
back from the investor. Dempers further informed them that the
purchase price for the property would, after certain
deductions, be
paid into a trust account for investment purposes. However, a
portion of the capital amount would be made
available to the
Applicants at the end of the seven year period, to enable them to buy
back their own property. According
to the First Applicant,
Dempers assured them that they would be permitted to buy back the
property after 7 years, for an amount
not exceeding that of the
outstanding bond at the time of transfer of the property to the
investor.
[4]
The Applicants further allege that after the first meeting with
Dempers, she advised
them that she had secured an investor, Wonderful
Choice Enterprise (Pty) Ltd (“Wonderful Choice”), the
Seventh Respondent.
Wonderful Choice would purchase the
property for an amount of R1 400 000, 00 whilst the Second
Applicant remained
in occupation. It was agreed that the
Applicants would pay a subsidised lease in the amount of R3500.00 per
month to Edenglo,
who would in turn, pay the lease over to Wonderful
Choice. In terms of the agreement, an amount of R400 000.00
from
the purchase price would subsidise the Applicants’ monthly
rental instalments for a period of seven years. The aforesaid
amount would be payable to Wonderful Choice by what seems to be its
investment arm, Wonderful Choice Investments. According
to
Clause 5.1 of the lease agreement signed by the Second Applicant, but
for the subsidy of R400 000, 00 the monthly rental
amount would
have been a sum of R5595.00 for each month for seven years. Instead
of the aforesaid amount, they had to pay
an amount of R3500.
[5]
Pursuant to the sale agreement, the Applicants were required by the
conveyancing attorney,
MD Mitchell Inc., to sign an affidavit
confirming that Edenglo would receive the proceeds of the sale of the
property and administer
them on their behalf. It is important
to refer to the entire affidavit. It reads thus:
“
1.
We, the undersigned, hereby confirm under oath that:
. . .
hereby authorize and instruct MD
Mitchell Inc. to pay the following disbursements from the proceeds of
the purchase price: professional
fees/agents, all legal costs, bond
cancellation costs, consultant fee to obtain clearance figures from
the Municipality, all rates,
taxes, levies, and charges owing to any
Local Authority or Body Corporate, Home Owners Association,
electrical compliance certificate,
FICA Fees up to date registration
of transfer.
2.
We confirm that according to the Sale Agreement an amount of R3500
minus the
city council and water accounts will be paid to us on date
of the successful registration in the Cape Town Deeds Office.
3.
We acknowledge/confirm that the balance of the proceeds of the
purchase price
is to be paid to:
EDENGLO HOLDINGS [PROPRIETARY
LIMITED
Who will administrate the
proceeds on our behalf. We hereby confirm/acknowledge that all
details were carefully discussed
with us and that we understand that
we will not receive any proceeds from the profit of the sale of our
property after the successful
registration in the Deeds Office.
3.
We acknowledge/confirm that we are aware of the fact that the deposit
in the
amount of R400 000.00 [four hundred thousand rand], which
is payable by the purchaser, will be credited to my lease agreement,
after registration. The deposit amount is therefore utilized to
subsidise the
lease amount of R3500.00
per month for 7 years as from date of registration in the purchaser’s
name. We are aware that
the monthly rental on the property
would have been higher if it was not subsidised by the deposit
above.”
[6]
According to the Applicants, at the time of the signing of the
agreement they were
happy to depose to the above affidavit, as it was
never their intention sell the property ‘
in the ordinary
sense of the word’.
They were satisfied with the fact
that the property would be registered in the name of the investor for
a limited time, subject
to their right to remain in possession.
Furthermore they believed that they would receive no financial
benefit from the sale
of the property, as the truest purpose of the
scheme was to rescue their home, as opposed to selling it. In
addition, the
Applicants aver that Dempers had advised that she
would, from the purchase price, pay off some of their debt, with the
balance
to be invested as earlier alluded to. The aforegoing as
well as desperate attempt to save their property, caused them to
agree to sell their property, which still had a bond of R400 000.00
registered over it.
[7]
The Applicants allege that after the property had been sold, they
duly paid their
monthly rent to Edenglo as stipulated in the
agreement. Wonderful Choice paid the R400 000.00 deposit
allocated as rental
and obtained a bond for the balance of the
purchase price from First National Bank Limited (“FNB”),
the Fifth Respondent,
in the amount of R1 000 000. 00.
[8]
On 7 October 2015, the Applicants received a letter from Venn &
Muller attorneys,
who advised them that Edenglo had failed to make
payment of the monthly rental instalments to Wonderful Choice, and
that such failure
resulted in the latter failing to effect the bond
payments. The Applicants were requested to tender all further
rental payments
directly to the First National Bank (“FNB”),
the Fifth Respondent. It does not appear from the papers that
any
payments were tendered to FNB. The papers reveal that
Edenglo did not pay the monthly rentals to Wonderful Choice. Because
Wonderful Choice did not have the funds to service the bond, it was
liquidated and the property was sold by the joint liquidators
(the
Eighth and Ninth Respondents) to the Third and Fourth Respondent.
[9]
According to the Applicants, during May 2017, they discovered that
the Edenglo scheme
was a scam, and that Edenglo and Dempers were
being investigated by the Hawks for fraud. The Applicants state
that at the
auction of the property they informed the Respondents
that they were fraudulently dispossessed of the property, and that
they intended
to institute legal proceedings to set aside the
fraudulent transactions and get their property back.
[10]
It is undisputed that the Applicants do not know what happened to the
balance of the purchase
price paid by Wonderful Choice, as well as
the once off rental payment in the sum of R400 000.00. All
they know is that
the scheme was fraudulent, in that it resulted in
them losing their home without receiving any real benefit or payment.
Furthermore,
had they known that that would be the case, they
would not have agreed to the transfer of the property to Wonderful
Choice.
The
Answering Affidavit (Third and Fourth Respondents)
[11]
As earlier pointed out, the application is opposed by the Third and
Fourth Respondents. The Respondents
confirm that the property in
question was judicially attached and sold to them by the Eighth and
Ninth Respondents (the joint liquidators
of the Wonderful Choice) on
22 August 2016. Registration and transfer passed on to them on
9 November 2016. It is common
cause that the Respondents
financed a portion of the purchase price by means of a mortgage bond
registered in favour of FNB for
the sum of R1 080 000.00.
It must be stated from the outset that the Respondents
understandably concede that they
are unable to refute any of the
allegations made by the Applicants relating to the sale of the
property, as they were not party
to the agreement. Their basis
for opposing the application is premised on the following factors:
1.
The Applicants adduced no evidence to establish that either Edenglo
or Wonderful
Choice lacked the intention to honour their obligations
towards the Applicants at the time the latter sold and transferred
the
property to Wonderful Choice.
2.
Even if the intentions of Edenglo and Wonderful Choice are found not
to have
been honourable, the transaction between the Applicants and
Wonderful Choice is voidable, and as such the Respondent’s
acquired
good title to the property.
3.
The Respondents allege that the Applicants, on their own version,
stated that
they discovered that the Edenglo scheme was a scam, yet
they took no steps to cancel the agreement and only launched this
application
a year later, that not being a reasonable time.
Furthermore, by delaying to launch the present application, the
Applicants
elected to uphold the sale of their property to Wonderful
Choice.
[12]
According to the Respondents, the present application is also not
bona fide,
as its main purpose is to delay the eviction of the
Applicants from the property. This, according to their version,
is particularly
so because on 1 November 2017, when the Respondents’
eviction application served for the first time before Samela J, the
Applicants, through an order obtained by agreement between the
parties, were afforded an opportunity to launch an application to
set
aside the sale of the property to Wonderful Choice and the matter was
postponed to 24 November 2017. They failed to do
so. On
24 November 2017, Davis J, afforded them a further indulgence and
ordered the application be postponed to 29 January
2018, and that the
Applicants should, by 29 January 2018, institute proceedings for the
setting aside of the transfer of their
property before 22 January
2018, failing which the Respondents would be entitled to proceed with
the application on an unopposed
basis. On 1 February 2018
Holderness AJ, postponed the eviction application to 15 May 2018 and
the Applicants in
casu,
having failed to file an answering
affidavit, were ordered to do so in accordance with the Rules of
Court. When they again
failed to serve and file an answering
affidavit, the Respondents launched a Chamber Book application for an
order compelling the
Applicants to deliver their answering papers in
the eviction application, and the order was granted on 19 April 2018.
On
15 May 2018, Sher J, granted an order in terms of which the
Applicants were to vacate the property by 28 September 2018, on
condition
that the present application should be dismissed.
[13]
The Respondents deny that the Applicants did not intend to sell their
property to Wonderful Choice.
Similarly, so allege the
Respondents, the Applicants, on their own version, did obtain a
benefit from the contract because
they avoided a foreclosure by the
bondholder, certain of their debts would be paid off and they would
continue to occupy the property
on a subsidised basis.
[14]
The Respondents further deny that the property was sold to them on
auction. As earlier
stated, it was by private treaty.
Accordingly, they deny that the Applicants had informed them
that they had been fraudulently
deprived of their property at the
auction.
[15]
The Applicants did not file a replying affidavit and as such the
matter must be determined on
the basis of the founding and opposing
affidavits as well as relevant annexures.
Analysis
[16]
It is well to recall that the Applicants base their case on the
allegation that the contract
they entered into with Edenglo and
Wonderful Choice, as facilitated by Dempers, was a fraudulent scheme,
which rendered the agreement
void. During argument, the
Applicants raised for the first time the fact that the purpose of the
Edenglo scheme is against
public policy and therefore ineffectual. I
revert to this issue later in this judgment.
[17]
With regard to the fraud allegations, the Applicants do not allege
that they were induced to
enter into the contract by a
misrepresentation or that Edenglo and Wonderful Choice lacked the
intention to honour their obligations
towards the Applicants at the
time when they sold and transferred the property. One
appreciates that fraud may always be
inferred or presumed from the
circumstances or conditions of the contracting parties, but in the
matter at hand I am constrained
to so find. The Applicants
emphasise that they did not intend to lose ownership of the property.
The contract of sale
between the Applicants and Wonderful
Choice has not been attached to these papers. However, it is
clear from the founding
affidavit that the Applicants had no
illusions about the type of contract they entered into. The
terms were clear: that they
would rent their home and some of their
debts would be settled from the proceeds of the sale, and after seven
years, they would
repurchase the property. It seems to me that
they thought that the real intention behind the sale and the
anticipated resale
was to allow the Applicants to retain possession
of the property. This is understandable, given that the
Applicants, by their
own admission, had fallen into hard times and
could no longer secure finance credit. It therefore cannot be
said that there
was any dishonesty or subterfuge about the
transaction between the parties. I am fortified in my view by
the dictum in S
v Friedman Motors (Pty) Ltd and Another
1972
(1) SA 76
(T) at 80G to H:
“
. . .If two people, instead of
making a contract for a loan of money by one of them to the other,
genuinely agree to achieve a similar
result through the sale and
repurchase of a chattel, there is no room for an application of the
maxim
plus valet quod agitur quam quod simulate concipitur
.
The transaction is intended to be one of sale and repurchase,
and that, at common law, is what it is.”
[18]
Counsel for the Applicants placed reliance on two cases from this
division, for the contention
that this court must find that the
Edenglo scheme was fraudulent. What follows in this judgment is
the analysis of the reasons
advanced by the court in each of the
authorities relied upon.
Mottel
and Others v Altmar Properties and Others
(19749/2012)
[2013] ZAWCHC 115
(20 June 2013):
With
regard to fraudulent misrepresentation, Savage AJ, (as she then was)
found that the applicants in this matter responded to
an
advertisement to consolidate their debts and not to sell their homes,
yet they were taken to Skei’s attorneys to sign
agreements
permanently selling their properties to the Hagans. The Hagans
in turn failed to disclose that they had been paid
to induce them to
engage in the scheme. The court found that it is highly
improbable that the Applicants would have signed
the agreement if the
above facts had been disclosed to them.
Morley
v Lambrechts ( A 526/2013)
[2014] ZAWCHC 124
(21 August 2014):
In
the
Morley
matter Binns-Ward J, writing for the full bench,
found that the Respondent did not fully appreciate that the effect of
the tenor
of the deeds of contract that she executed was the
alienation of her property and that had she known, she would never
have signed
the agreement, because her intention was to pledge the
property as security for a loan that she understood she was advancing
to
her son.
[19]
It is clear from the aforegoing that insofar as fraudulent
misrepresentation is concerned, the
reliance on the two matters above
is not helpful to the Applicants, as the facts are clearly
distinguishable. It is my judgment
that it is difficult on the
facts in
casu
to come to the conclusion that the Edenglo
scheme was fraudulent. Whether it is against public policy is
another question.
[20]
I have earlier indicated that the Applicants also argued that the
contract is against public
policy. Mr Newton, who represented
the Respondents, submitted that the Applicants are not permitted to
raise, for the first
time, in argument the fact that they also rely
on considerations of public policy to have the agreements declared
ineffective.
Mr Newton correctly stressed that it is trite that
in motion proceedings the affidavits constitute pleadings and the
evidence,
as the Respondents, they have the right to know what case
they have to meet and to respond thereto. Mr Du Preez, who
appeared
for the Applicants, on the other hand, stressed that the
court has a duty consider the legality or illegality of a contract
against
the
boni mores.
It is so that in this matter,
the Applicants have not raised the point that the contract/s are
contrary to public policy
or against good morals. This court
must therefore determine whether it is open to it to consider the
issue. In my view,
it would be remiss of this court to
disregard the impact of the contract/s on public policy, simply
because it was not raised in
these papers. In
Morley, supra,
Binns-Ward J reaffirmed the duty of the court to
mero motu
raise the illegality of the contract, as was set out in
Ryland v
Edros
1997 (2) SA 690
(C) at 710 A-B, as follows:
“
. . . I say this because of the
fact that the plaintiff has not contended that the contract was
illegal and a Court’s duty
to invoke
mero motu
the
illegality of the contract only exists in my view in cases where the
enforcement of a contract presently unenforceable because
is contrary
to public policy or
contra bonos mores
is sought.”
Similarly,
in
Yannakou v Apollo Club
1974 (1) SA 614
(A), at 623 G-H, the
court said the following:
“
And if his defence is
illegality, which does not appear
ex facie
the transaction
sued on but arises from its surrounding circumstances, such
illegality and the circumstances founding it must be
pleaded. It
is true that it is the duty of the court to take the point of
illegality
mero motu,
even if the defendant does not plead or
raise it; but it can and will only do so if the illegality appears
ex
facie
the transaction or from the evidence before it, and, in the
latter event, if it is also satisfied that all the necessary and
relevant
facts are before it.”
[21]
It is my judgment that it would be a travesty of justice if this
court were, in the circumstances
prevailing in the matter at hand, to
fail to consider the issue of the legality of the agreements. It
matters not that it
was raised by the Applicants during argument, as
this court is, in any event, enjoined to
mero motu
raise it.
As such, I now proceed to consider whether the contract/s
between the parties were contrary to public policy.
Is
the contract contrary to public policy?
[22]
It is now settled law that courts are empowered to declare contracts,
or contractual terms, entered
into freely and voluntarily,
unenforceable if they are found to be against public policy. The
approach to be adopted in an
enquiry of this nature is set out in
Eastwood v Shepstone
1902 TS 294
, at 302, where the court
stated that:
“
. . .this Court has the power
to treat as void and to refuse in any way to recognise contracts and
transactions, which are against
public policy or contrary to good
morals. It is a power not be hastily or rashly exercised; but
when once it is clear that
any arrangement is against public policy,
the Court would be wanting in its duty if it hesitated to declare
such an arrangement
void. What we have to look to is the
tendency of the proposed transaction, not its actually proved
result.”
This
principle is restated in
Sasfin (Pty) Ltd v Beukes
1989 (1) SA
(A), at 9B-C, as follows:
“
No
court should therefore shrink from the duty of declaring a contract
contrary to public policy when the occasion so demands. The
power to declare contracts contrary to public policy should, however,
be exercised sparingly and only in the clearest of cases,
lest
uncertainty as to the validity of contracts result from an arbitrary
and indiscriminate use of the power. One must be
careful not to
conclude that a contract is contrary to public policy merely because
its terms (or some of them) offend one’s
individual sense of
propriety and fairness. ”
Finally,
in
Barkhuizen v Napier
[2007] ZACC 5
;
2007 (5) SA 323
CC, at 333-334 , the
court explained that whether or not a term in a contract is contrary
to public policy, must be determined
by having regard to the Bill of
Rights and the values that underpin our constitutional democracy as
expressed in the Constitution.
It said:
“
[29] . .
.Thus a term in contract that is inimical to the values enshrined in
our Constitution is contrary to
public policy and is, therefore,
unenforceable.
[30] In
my view the proper approach to the constitutional challenges to
contractual terms is to determine
whether the term challenged is
contrary to public policy as evidenced by the constitutional values,
in particular, those found
in the Bill of Rights. This approach
leaves space for the doctrine of
pacta sunt servanda
to
operate, but at the same time allows courts to decline to enforce
contractual terms that are in conflict with the constitutional
values
even though the parties may have consented to them. . .”
At
para 73 it continued:
“
[73] Public
policy imports the notions of fairness, justice and reasonableness.
Public policy would preclude
the enforcement of a contractual
term if its enforcement would be unjust or unfair. Public
policy, it should be recalled,
‘is the general sense of justice
of the community, the boni mores, manifested in public opinion’.
. .”
(Footnote omitted.)
[23]
The facts of the matter at hand exhibit features which, when
cumulatively considered, show a
probability that unconscionable,
immoral or illegal conduct will result from the implementation of the
provisions of the contract
according to their tenor. (See
Juglal NO and Another v Shoprite Checkers (Pty) Ltd t/a OK
Franchise Division
2004 (5) SA 248
(SCA) at 258 para 12.)
[24]
Although I have found that the contracts do not appear to be
fraudulent, their intrinsic unconscionableness
shows that they are
against public policy. The facts establish that the Applicants
contracted with the main intention of
saving their home from
foreclosure. Furthermore, it is undisputed that the Applicants
were in a vulnerable and unenviable
financial position, severely
compromised by their inability to secure further credit. Certain
features of the agreements
clearly show unconscientious exploitation
of the applicant’s dire financial circumstances. This I
say because, first,
it is inconceivable how the Applicants accepted
the terms outlined in the affidavit wherein they authorised MD
Mitchell Inc., to
distribute the proceeds of the purchase price
without the amounts being included. Therein, the Applicants
agreed to disbursements
that do not make sense as no amounts are
reflected, neither is there an indication of how each debt shall be
proved. These
range from professional fees/agents commission,
all legal costs, bond cancellation costs, consultant fee to obtain
clearance figures
from the Municipality, taxes, levies as well as
FICA fees. The terms outlined above are clearly oppressive to
the borrowers,
as they would not be able to determine the
authenticity of the actual amounts paid out of the proceeds of the
sale of their home.
Furthermore, the terms of the lease
agreement are clear that should the Applicants breach the terms, the
agreement would
be cancelled and they would remain without a roof
over their heads, notwithstanding the fact that an amount of
R400 000.00
had already been secured as pre-paid rental.
Second, it is not apparent from these papers that the
Applicants were alive
to the fact that their failure to pay rent was
inextricably linked to Wonderful Choice’s servicing of its
bond. This
knowledge is pivotal, as their defaulting on the
monthly rental would lead to the very result the Applicants sought to
avoid from
the outset, i.e. losing their home. Third, it is
very unlikely on the facts in
casu,
that the Applicants would
be able to secure a bond, after seven years, to repurchase their
home, given that they are already are
on record as having defaulted
on their bond repayments. A conclusion that the real nature, or
rather the underhand nature,
of the agreements has been cleverly
concealed, is inescapable. This is compounded by the fact that
even the lease agreement
also does not reflect the name of the
lessor. Neither does it reflect the date on which the
transaction was entered into.
It is also telling that the First
and Second Respondents have not opposed this application. In my
view, based on what
I have alluded to above, the Applicants could not
have intended to transfer the property in these circumstances. I
therefore
declare the terms of the scheme and the pursuant agreements
between the Applicants and the First and Second Respondents as being
contrary to public policy, and the contracts void
ab initio
.
[25]
It will be recalled that the Respondents allege that the transaction
between the Applicants and
Wonderful Choice is voidable and as such,
based on the abstract, as opposed to causal theory of transfer, the
Respondents acquired
good title to the property. I have found
that the Applicants established on these papers that they did not
intend the permanent
transfer of ownership of their property to
Wonderful Choice. I deem it unnecessary therefore to consider
the voidability
of the contract, given that I have already made a
finding to the effect that there is a defect in the agreements of
sale and lease
and that they both are
void ab initio.
[26]
I now turn to consider the question of costs.
Costs
[27]
It remains to be said that the Third and Fourth Respondents bemoaned
the fact that the Applicants
failed to take timeous action to
vindicate their property. Indeed it is so that the Applicants
were advised by Venn &
Muller attorneys as early as 7 October
2015 that Edenglo failed to make payments of the monthly rental to
Wonderful Choice.
It does not appear that the Applicants, once
they had obtained that knowledge, took any steps to claim the
property. Similarly,
when they discovered that the Edenglo
scheme was a scam, they did nothing. It is only when the Third
and Fourth Respondents
brought eviction proceedings that the present
application was brought. The Applicants have not taken the
court into their
confidence, as they have failed to advance tangible
reasons why they delayed taking the necessary action, thereby,
according to
the Third and Fourth Respondents, acquiescing to the
terms of the agreement that eventually resulted in their losing the
property.
It will be recalled that Sher J, had already issued
an eviction order against the Applicants, which was stayed pending
the
determination of this matter. The Applicants were, prior to
the issuing of the eviction order, afforded, through court orders,
two opportunities to pursue the present application and they failed.
Not only that, they also failed to file a replying affidavit,
notwithstanding the fact that the Third and Fourth Respondents had
specifically addressed their failure to bring the present application
timeously. Furthermore, the practice note and setting down of
the matter was done by the Respondents. Although they have
made out a
case for the declaration of invalidity of the agreements, the manner
in which they conducted themselves by delaying
the proceedings leaves
much to be desired. This is particularly so because the delay
must have given the Third and Fourth
Respondents the impression over
the years that their title to the property is unassailable. Whereas
costs normally follow
the result, I am of the view that in the
present matter, each party must pay its own costs.
[28]
With regard to wasted costs relating to the postponements on 13
October 2017, 1 November 2017,
24 November 2017, 29 January 2018 and
15 May 2018, the parties did not address same in their Heads of
Argument, neither did they
call for a determination relating to the
aforesaid dates. It would therefore be negligent to make orders
without affording
the parties an opportunity to address the court on
whether or not they are still pursuing those costs.
[29]
In the light of the findings I have made, the following order will
issue:
1.
It is declared that the transaction constituted by the deed of sale
and lease
executed by the Applicants and the Second and/ or Seventh
Respondents on an unknown date is contrary to public policy.
2.
It is further declared that the sale and transfer of the immovable
property,
known as Erf […], Brackenfell, situated at […]
K Street, Protea Heights, Brackenfell, Western Cape from the
Applicants
to Wonderful Choice Investments (Pty) Ltd, and the
subsequent transfer to Minerva Merissa Baugaard and Ian William
Baugaard (the
Third and Fourth Respondents) is hereby cancelled.
3.
The Registrar of Deeds is directed to give effect to this
declaration, as contemplated
in
section 6
of the
Deeds Registries Act
47 of 1937
.
4.
Each party is ordered to pay its own costs.
NDITA,
J