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[2020] ZAWCHC 107
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Nedbank Limited v Bestbier and Others (12654/18) [2020] ZAWCHC 107 (17 September 2020)

SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No
. 12654/18
In
the matter between:
NEDBANK
LIMITED
Plaintiff
and
PETRUS
JOHANNES
BESTBIER
First Defendant
(identity
number: [...])
(both
in his personal capacity and in his
representative
capacity as Trustee of
the
Goede Hoop Trust, IT1333/94)
HANLIE
BESTBIER
N.O.
Second Defendant
CAREL
BRINK BESTBIER
N.O.
Third Defendant
FRANS
STEFANUS BOTES
N.O.
Fourth Defendant
and
HENDRIK
MARIUS
SCHOLTZ
Intervening Party
JUDGMENT
DELIVERED ELECTRONICALY ON 17 SEPTEMBER 2020
KUSEVITSKY,
J
Introduction
[1]
This is an application for a money judgment, together with an order
declaring a property, which belongs to a trust and which
operates as
a commercial wine farm and cellar in the Stellenbosch area of the
Western Cape (“the Farm”), to be specially
executable.
[2]
The Defendants are the trustees of the Goede Hoop Trust (“the
Trust”). The Trust is the registered owner of the
farm known as
Goede Hoop. The Defendants do not dispute that they are indebted to
the Plaintiff. In fact, they entered into a settlement
agreement with
the Plaintiff where they expressly consented to the farm being
declared executable and undertook to pay the Plaintiff,
failing which
the Defendants consented to judgment, including an order declaring
the farm executable in the event that they were
unable to sell the
farm timeously.
[3]
The Defendants failed to make
payment in terms of their undertaking in the settlement agreement;
failed to sell the farm and refused
to honour their consent to have
the property declared executable. Instead, the Defendants
inter
alia
now contend, that the
farm is the primary residence of the First and Second Defendant’s,
and is also home to twelve other
families who permanently work and
reside on the farm. As a result, the Defendants contend, that the
Plaintiff has failed to comply
with the prescripts of Rule 46A read
with Practice Directive 33
[1]
,
which non-compliance they say is fatal to the Plaintiff’s
application.
Background
[4]
The Trust conducts a winery business on Goede Hoop.  Over the
years, the Defendants obtained substantial financial assistance
from
the Plaintiff in the form of an overdraft facility and loans, which
were secured by way of nine mortgage bonds registered
over the farm.
[5]
Defendants failed to comply with their repayment obligations and the
Plaintiff consequently called up the balance of the amounts
owing to
it. Plaintiff issued summons against the Trust and the First
Defendant in his personal capacity, for the amounts of R
5 529 477.36
together with interest at a rate of 12.50% per annum and R
3 034 966.88 together with interest
at a rate of 11% per
annum, together with costs. The Plaintiff also sought an order that
Portion 2 (a portion of portion 1) of
the Farm [...], No.[...],
Division Stellenbosch, Western Cape Province, be declared specially
executable and that the property
be sold in execution at a reserve
price of not less than R 21 000 000.00.
[6]
The Defendants entered appearances to defend, which was met with an
application for summary judgment. The Defendants opposed
the
application on various grounds. According to the Defendants, the
application was initially set down on 11 September 2018 when
it was
postponed for hearing on 13 September 2018.
[7]
On the eve of the application
however, this matter, together with other matters concerning money
judgments and executions, were
postponed pending the decision in the
matter of
ABSA Bank v
Mokebe
[2]
.The summary judgment application was subsequently postponed to 21
February 2019.
[8]
On 21 February 2019, the Plaintiff and the Defendants reached a
settlement agreement, which is the agreement upon which the
present
application for default judgment is based (“the settlement
agreement”). The settlement agreement was reduced
to writing
and signed by the parties on 29 March 2019.
[9]
It is common cause that the
Defendants failed to adhere to the settlement agreement. On 30
September 2019, the Plaintiff launched
this application for default
judgment in terms of Rule 31(1)(c) of the Rules of Court
[3]
,
based on the settlement agreement. They also seek to have the farm
declared specially executable. It is this matter that is now
before
me for adjudication.
[4]
[10]
In pursuance of its application, the Plaintiff accepts that in
applications to have immovable property declared executable,
a
plaintiff must comply with this court’s practice direction 33A
when the property is or appears to be, a defendant’s
primary
home. They argue however that the provisions of Practice Directive
33A are not applicable to this application, because
the property is a
commercial wine farm which belongs to the Trust.
[11]
They further contend that the municipal valuation of the farm is
approximately R21 million and on the Defendants’ version,
the
market value thereof is about R40 million under normal marketing
conditions; and worth R35 million on a “
fire sale
”.
It is also apparent that the Trust owns movable equipment, which
comprises machinery and stock in trade, amounting to approximately
R5
million.
[12]
In the opposing affidavit, Ms Bestbier on behalf of the Defendants
and who is also the daughter of the First and Second Defendants,

indicated that the farm was initially purchased by her great
grand-father in 1929 and stated that their family have been residing

at and running a farming enterprise on Goede Hoop ever since. Her
mother and father have resided in the main house since 1992 and
there
are twelve smaller cottages where the farm’s permanent workers
and their families reside, many of whom have been working
and living
on the farm for nearly as long as her family. She states that in view
of the fact that the First and Second Defendants
have resided on the
property for over 25 years, they have no alternative residence.
[13]
Plaintiff however contends that
this belated argument is contrived, given the fact that the
Defendants were at all times legally
represented by Ms Bestbier, in
her capacity as attorney of record for the Defendants, during the
settlement negotiations leading
up to the settlement agreement.
According to the Plaintiff, the Defendants were apprised of their
rights in terms of the provisions
of Section 26(1) of the
Constitution, 1996
[5]
and consented to the property being declared executable in the event
of them defaulting the terms of the Settlement agreement.
They
further argue that given the farm’s actual valuation of between
R35 million and R40 million and the reserve price which
is set at R21
million, that there would be more than enough residue left after the
debt owed to the Plaintiff has been extinguished,
to purchase
alternative accommodation.
Is
Rule 46A applicable?
[14]
Rule 46A of the Uniform Rules of Court reads as follows:
“
46A Execution against
residential immovable property
(1)
This rule applies whenever an execution
creditor seeks to execute
against the residential immovable property of a judgment debtor
.
(2)
(a) A court considering an application under this rule must —
(i)
establish whether the immovable property which the execution creditor
intends to execute against is the primary residence of
the judgment
debtor; and
(ii)
consider alternative means by the judgment debtor of satisfying the
judgment debt, other than execution against the judgment
debtor’s
primary residence.
(b)
A court shall not authorise execution
against
immovable property 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.
(c)
...
(3)
Every notice
of application to
declare
residential immovable property executable
shall be —
(a)
substantially in
accordance with Form 2A of Schedule 1;
(b)
on notice to the
judgment debtor and to any other party who may be affected by the
sale in execution, including the entities referred
to in rule
46(5)(a): Provided that the court may order service on any other
party it considers necessary;
(c)
supported by affidavit
which shall set out the reasons for the application and the grounds
on which it is based; and
(d)
served by the sheriff on
the judgment debtor personally: Provided that the court may order
service in any other manner.
(4)
(a) The applicant shall in the notice of application —
(i)
state the date on which the application is to be heard;
(ii)
inform every respondent cited therein that if the respondent intends
to oppose the application or make submissions to the court,
the
respondent must do so on affidavit within 10 days of service of the
application and appear in court on the date on which the
application
is to be heard;
(iii)
appoint a physical address within 15 kilometres of the office of the
registrar at which the applicant will accept service
of all documents
in these proceedings; and
(iv)
state the applicant’s postal, facsimile or electronic mail
address where available.
(b)
...
(5)
Every application shall be supported by the following documents,
where applicable, evidencing:
(a)
the market value of the immovable property;
(b)
the local authority valuation of the immovable property;
(c)
the amounts owing on mortgage bonds registered over the immovable
property;
(d)
the amount owing to the local authority as rates and other dues;
(e)
the amounts owing to a body corporate as levies; and
(f)
any other factor which may be necessary to enable the court to give
effect to subrule (8):
Provided
that the court may call for any other document which it considers
necessary.”
(“my
emphasis”)
[15]
The provisions of Practice Directive 33A deals with “
Foreclosure
(and executions when property is, or appears to be, the defendant’s
primary home
.)” It goes on to add that “
This
Directive must be read
in conjunction with
the
amended rule 46A (which amendment came into operation on 22 December
2017
). (‘my emphasis”). On a proper construction, it
is therefore clear that the two directives are conjoined and that the

corollary position would be, that this directive would not be
triggered if Rule 46A is not applicable.
[16]
Plaintiff argues that the aim
of Rule 46A, which has it genesis in
Jafta
[6]
,
is a safeguard for people who need it the most. In this instance,
they argued that the farm operates in the business of a wine
farm
with distilleries.  The people on the farm are necessary for the
operations of the farm. They further questioned what
would have
happened to the workers if the Trust
had
sold the farm, as they had intended to. They argue that the
Defendants belated reliance on Rule 46A is an abuse of process and
an
attempt to escape liability of an admitted debt. They merely ask that
the settlement agreement be enforced as there are adequate

legislative safeguards in place for the occupants of the farm.
[17]
The Defendants on the other hand argue that irrespective of the
status of the Defendants, there should still be judicial oversight
in
all cases where property serves to be declared executable, including
that belonging to trusts. They further argued that in terms
of the
settlement agreement, it seemed as though the Trust waivered its
right to Rule 46A. They say that if there was a waiver,
such waiver
could only be applicable to the parties of the waiver, which are the
trustees – and could not be extended to
the workers. Although
they conceded that it was a commercial enterprise, the rights of the
occupants of the property could not
be trumped by the waiver. There
still had to be judicial oversight.
[18]
In terms of the commentary of
Rule 46A
[7]
under the definition section of ‘
residential
immovable property’
,
Rule 46A does not apply when an execution creditor seeks to execute
against immovable property of a judgment debtor that does
not perform
the function of a form of dwelling or shelter for humans (e.g.
commercial immovable property) or that is occupied by
juristic
persons or legal entities, other than humans (e.g. trusts) for use
other than a dwelling. In the event of an execution
creditor seeking
to execute against such immovable property, Rule 46 applies.
[19]
There is however a qualification. If immovable property is merely
nominally
registered in the name of a legal person or trust,
but used as a dwelling by the shareholder (s) or the trustees/trust
beneficiaries,
the property falls within the ambit of rule 46A in the
event that the legal person or the trustees in their official
capacity are
the judgment debtors and the judgment creditor wants to
execute against the property.
[20]
Recent judgments handed down on
this point have been conflicting in their approach. I will deal with
some of these in due course.
In some cases, courts have found that
Rule 46A were not applicable to trusts, whilst others have found that
it was. In as much
as this could possibly be construed as a
lucuna
in the application of Rule 46A, this anomaly could easily be
rectified if one were to adopt the approach that is used in the
National
Credit Act
[8]
(“the NCA”), to determine whether or not a trust is a
juristic person for purposes of Rule 46A.  I propose this,

mindful of the role of the Rules Board in restating existing law and
regulating procedure that applies to that law
[9]
,
but also given the call by the National Credit Regulator for the
harmonization between Rule 46A and certain provisions of the
NCA.
[10]
One of the main aims of the NCA is to primarily protect the consumer,
who in some, if not most cases are the marginalised people
who have
historically been the most economically vulnerable, predisposed to
unethical money lenders. The genesis of Rule 46A has
the same tenor.
The NCA defines ‘consumers’ to include all natural
persons and some juristic persons were generally
excluded from the
ambit of the NCA. The NCA however recognized that in certain
instances, parties entered into small or intermediate
agreements
where the consumer was a trust. In terms of the NCA, a trust may in
some instances, in terms of the definition of ‘
juristic
person’
, be regarded
as a juristic person and in other instances, as a natural person.
[11]
[21]
A distinction is made between
types of agreements entered into where the consumer is a juristic
person such as a trust. Thus where
a trust has two or less trustees,
it is considered (for purposes of the NCA) as a natural person. Where
the asset value or annual
turnover equals or exceeds R 1 million and
there are more than two trustees, it is considered a large juristic
person and the NCA
does not apply. Furthermore, the constitutionality
of this exclusion was confirmed.
[12]
The Constitutional court in
Paulsen
and Another v Slip Knot Investments 777 (Pty) Ltd
[13]
also held that section 4(1)(a)(i) of the NCA (which exempts
agreements with juristic persons with an asset value or annual
turnover
above the threshold from the ambit of the NCA.) “
evinces
a conscious legislative choice not to protect this type of consumer
under the Act
.”
[14]
[22]
There is no doubt that such a
distinction and clear parameters of exclusion as to when juristic
persons are deemed a ‘natural
person’ for purposes of
debt enforcement in the NCA, creates certainty amongst contracting
parties and ultimately judgment
and execution creditors when these
types of agreements require enforcement. Parties know whether the NCA
would be applicable, as
there are various other procedural
formalities which flow from such applicability, such as compliance
with section 129 and the
like, which entails certain procedures to be
adopted prior to debt enforcement.
[15]
.
In my view, the same considerations applicable to trusts in the NCA
could apply to rule 46A. I can see no reason why such an approach

could not be incorporated and adopted into Rule 46A when assessing
whether or not a trust would bring itself within the realm of
rule
46A.This would also bring it in line in instances where there is a
nominal registration of a
primary
residence
in the vehicle of a trust. This would certainly create certainty
amongst practitioners and judgment creditors alike. It would also,
in
my view, give effect to the purpose of Rule 46A and the very essence
of the protection mechanisms that it seeks to enforce.
[23]
In
casu
, the Goede Hoop Trust has four trustees and a movable
asset value, on its own version of R5 million. The value of the farm
as a
going concern is in excess of R 30 million. On the above
construction, it would therefore not be considered a ‘natural
person’
and be afforded the protections that is reserved
exclusively for ‘natural persons’. The immovable property
of the Trust,
as a juristic entity and in its capacity as judgment
debtor, would be dealt with in terms of Rule 46.  Rule 46A and
consequently
Practice Directive 33A, would therefore find no
application.
[24]
Even if the above approach does
not find favour, I am not persuaded that Rule 46 A and Practice
Directive 33A applies in this instance.
As the present position
stands, it cannot be doubted that Rule 46A is aimed at the protection
of individuals and the
residential
immovable property of a judgment debtor. Further indicators that this
is the case
[16]
is the reference to the judgments as contained in
Standard
Bank of South Africa v Saunderson and Others
[17]
,
Nedbank Ltd v Jessa and
Another
2012 (6) SA 166
(WCC)
and
Standard Bank of South
Africa v Dawood
[18]
. All refer to individuals as opposed to legal entities.
[25]
The Constitutional Court in
Jaftha v Schoeman and Others, Van
Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005 (2) SA 140
(CC) stated the
importance of the right of access to adequate housing, in the
following terms (in para [29]):
“
Section 26 must
be seen as making that decisive break from the past.  It
emphasises the importance of adequate housing and
in particular
security of tenure in our new constitutional democracy.  The
indignity suffered as a result of evictions from
homes, forced
removals and the relocation to land often wholly inadequate for
housing needs has to be replaced with a system in
which the state
must strive to provide access to adequate housing for all, and where
that exists, refrain from permitting people
to be removed unless it
can be justified.”
[26]
The protection that it seeks to
evince is clear. As I’ve indicated earlier, there are
distinguishing authorities on this point.
In
Investec
v Fraser & Ors NNO
[19]
,
an applicant sought an order declaring certain immovable property
owned by the Tricour Property Trust, to be declared specially

executable as a precursor to satisfying a money judgment granted
against the Trust, as surety in the amount of R 13 242 075.26
plus
interest and costs. The first respondent opposed the application
stating that she resided on the property with her two adult
children,
alleging that it was her primary residence and since the applicant
failed to comply with rule 46A of the Uniform Rules
of Court, that
the application was defective.
Lapan
AJ’s judgment in that matter dealt with primarily two issues.
The first was the reliance by the respondents (as in this
case) on
the decision of
Nedbank v The Trustees for the Time being of the
Mthunzi Mdaba Family Trust
, which found that a trust is not a
juristic person for purposes of Rule 46A. The court reasoned as
follows:
“
[47]
As the court held in
Saunderson
,
when judgment is given against a debtor and the debtor fails to
satisfy the judgment debt, the process for recovery of the judgment

debt is by execution against “
the
judgment debtor’s belongings
”.
Execution does not proceed against the belongings of a third party
who did not incur any liability for the judgment debt
in respect of
which execution is sought.
[48]
When rule 46(1)(a)(ii) was amended, pursuant to GN R 981 of 19
November 2010, with effect from 24 December 2010, the following

proviso was added -
“
where
the property sought to be attached is the primary residence of the
judgment debtor, no writ shall issue unless the court,
having
considered all the relevant circumstances, orders execution against
such property.
”
[49]
Following upon this amendment and the decision in
Gundwana,
on
11 April 2011, the full bench was constituted in
Folscher
to
determine,
inter
alia
,
what the “
relevant
circumstances
”
are that require consideration before issuing a warrant of execution
in terms of the amended rule 46(1)(a)(ii).”
[27]
The
court, in
Folscher
,
considered the meaning of the terms “
primary
residence
”
and “
judgment
debtor
”
in the amended rule.  Upon review of various dictionary
definitions, the court accepted the following definitions of
the term
“
primary
residence
”:
[20]
[50.1]
a person’s primary residence is the
dwelling
where
they usually live, typically a house or an apartment, and a person
can only have one primary residence at any given point
in time;
[50.2]
a “home” means the place where one lives; the fixed
residence of a family or household; a dwelling house…
the
physical structure within which one lives, such as a house or
apartment”; and
[50.3]
“housing” means “shelter” or “lodging”.
The
term “primary residence” was held to be the same concept
as “the home of a person” in the amended rule

46(1)(a)(ii).
The
court held that the term “judgment debtor” as understood,
for instance, in cases like
Saunderson,
refers to “
an
individual, a person
”
and,
importantly, the court concluded that:
“
It
is therefore the primary residence owned by a person that falls
within the purview of the rule.”
[53]
Relevant for present purposes, the court held that:
“
Immovable
property owned by a company
,
a close corporation or a trust, of which the member, shareholder or
beneficiary is the beneficial owner,
is
not protected by the amended
rule requiring judicial oversight by way of an order of court
authorising a writ of execution, even if the immovable property is

the shareholder’s, member’s or beneficiary’s only
residence.” (“my emphasis”)
[28]
The
court concluded that this
dictum
put
it beyond doubt that if the judgment debtor is not a natural person,
the constitutional considerations and protections are not
available
to such a judgment debtor and the right to access adequate housing in
section 26 of the Constitution is not implicated.
The court
found that in that case, the provisions of rule 46A are not
applicable as the property sought to be executed against,
is
registered in the name of the Trust and it is irrelevant that the
trustee and her children reside on the property and consider
it their
home.  The court further confirmed, that since the Trust, being
the judgment debtor, is not a natural person, the
constitutional
safeguards are not available to it where execution is sought against
its immovable property
[21]
.
[29]
The
court also criticized the anomaly that the effect of the
Mthunzi
judgment created
[22]
.
This
is so because although the property is registered in the name of the
trustee in his official capacity, consideration is given
to the
trustee’s personal circumstances should he/she happen to reside
on the trust’s property.  The court stated
that it is
illogical to grant a money judgment in a personal action against a
trust, as the judgment debtor, and then, upon seeking
to execute
against the trust’s belongings, in particular its immovable
property, to have regard to the personal circumstances
of the trustee
who resides on the property.  Such an interpretation conflates
the role of the trustee when acting in his personal
capacity with his
role as a representative of the trust.
[23]
[30]
The court also
reiterated that Rule 46A provisions encapsulate the protections
afforded to indigent persons in danger of losing
their homes and
which protections are necessary to give effect to section 26 of the
Constitution.
[31]
In
another recent decision,
Assetline
South Africa (Pty) Ltd v Manhattan Delux Properties (Pty) Ltd and
Others
[24]
,
a defence was raised by the respondents that Assetline, a company,
failed to comply with the requirements of Rule 46 and Rule
46A. In
the answering affidavit, Mr. Denenga, the deponent on behalf of
Manhattan, stated that to his knowledge, the property that
was sought
to be declared specially executable, was the primary home of one Mr.
Matienga. Keightley J stated that even if the property
was Mr.
Matienga’s primary home, it was not
his
property, it was the property of Manhattan, a juristic person.
[25]
Whilst the court did not pronounce on the legal position, it did find
that because the loan was advanced to Manhattan for purposes
of a
business venture – and not to provide funding to purchase the
property – that the Rule 46A defence was without
merit.
Notice
to ‘
any party who may be affected’
defence
[32]
The next
defence raised is that consideration should be given to the twelve
farm workers who live and work on the farm and that
notice should be
given to them. The Defendants contend that the fact that the property
is owned by a Trust does not matter. They
state that the trustees,
the trust beneficiary and the farm workers who
have resided on the farm for decades fall within the category of
‘affected persons’ envisioned by Rule 46A as well
as
Practice Directive 33A.  They relied on
Nedbank
v The Trustees for the time being of the Mthunzi Mdwaba family
Trust
[26]
which held that a trust is not a juristic person for purposes of the
Rule 46A enquiry.
The
court in para [10] of that judgment referred to the judgment of the
Supreme Court of appeal in
Land
and Agricultural Bank of South Africa v Parker,
[27]
where
the following was said:
“
Except
where statute provides otherwise, a trust is not a legal person. It
is an accumulation of assets and liabilities. These constitute
the
trust estate, which is a separate entity. But though separate, the
accumulation of rights and obligations comprising the trust
estate
does not have legal personality. It vests in the trustees, and must
be administered by them – and it is only through
the trustees,
specified as in the trust instrument, that the trust can act”
[28]
.
[33]
They argue that the
court in
Mthunzi
held that if immovable property is merely nominally held in the name
of a trust, but used as a dwelling by the trustee or trust

beneficiaries, the property falls within the ambit of Rule 46A, in
the event that the trustees in their official capacity are the

judgment debtors and the judgment creditor wants to execute against
the property. The property will still fall within the ambit
of Rule
46A even if the trustees in their official capacity are not the
judgment debtors.  The fact that the trustees in their
official
capacity are the judgment debtors only signifies commitment towards
payment of the debt by the trustee.
[29]
They further relied on
First
Rand v Mgedesi
2019 JDR 2252 (MN) where they stated that a similar view was adopted
where it was held that Rule 46A (3) requires a substantial

application which conforms with Form 2A of Schedule 1 to be served on
the tenant.
[34]
The
Defendants submit that on a proper construction of the judgments
dealing with judicial oversight, that where a creditor seeks
to
execute against residential property, that such oversight extends to
all persons who reside on the property as their primary
residence.
To suggest otherwise would be to negate the aim and purpose of such
protection, which is to protect the right
to adequate housing and
security of tenure.  In the present case it is not disputed that
persons other than two of the trustees
have the farm as their primary
residence, namely a beneficiary of the trust and a number of families
of farm workers who have resided
on the farm for decades. They
contend that in any event, it is apparent that the legislature when
it drafted Rule 46A, had provided
for service on other parties than
only the judgment debtor.
[30]
Rule 33A too envisages that parties other than the judgment debtor
may be affected
[31]
.
[35]
Rule 46A envisages notice to
‘
any other party
who may be affected by the
sale in execution’,
other than the judgment debtor.
In
FirstRand Bank Limited v Mgedesi and Another
[32]
,
Brauckmann AJ in the context of the question of joinder, was of the
view that an occupier has the sole interest of occupation.
That
interest is not related to the subject matter of the proceedings to
have immovable property declared specially executable.
[33]
In any event, an occupier enjoys separate, but comprehensive
legislative protection in the form of
inter
alia
the Prevention of
Illegal Eviction from Unlawful Occupation of Land Act 19 of 1998
commonly known as the PIE Act and the Extension
of Security of Tenure
Act 62 of 1997 (“ESTA”).
[36]
Brauckmann AJ further held that in any event, a tenant does not have
any rights that will be adversely affected that is not
already
properly protected in law. He stated that in the context of joinder,
the interest which an occupier may have in occupying
the property
does not constitute an interest requiring joinder.
[37]
I am of the view that
similarly, the occupiers of the farm in the form of the workers have
adequate legal protection afforded to
them under Section 26 of the
Constitution. Just as they do not have a legal interest requiring
joinder in proceedings relating
to executability, they do not have a
legal interest which would warrant their intervention at this stage
of the proceedings between
the Plaintiff and the Defendants. Thus the
argument that the Trust could not have bound the affected parties to
the Settlement
agreement, and thus waivered any rights that they
might have had, is misplaced. As is the common practice, in the event
that the
property is sold at auction, the new owners of the property
will be compelled to comply with the provisions of the PIE Act before

the occupiers may be evicted.  As stated in
Mgedesi
,
although a basic human right to have access to adequate housing is
protected in the Constitution, it does not provide the tenant
or
occupier in this case, with a direct and substantial interest in the
dispute between the parties. The
lis
between the Applicant and the First Respondent is simply to have the
property that the tenant occupies declared specially executable,
and
to sell the property at a sale in execution in order to enable the
Applicant to recover money due to it by the First Respondent.
[34]
[38]
I however respectfully disagree with that court’s reasoning
that because a sale in execution will, or may affect the
rights to
accommodation, that the tenant has or might have in terms of Section
26 of the Constitution, that such process must be
served on the
tenant or in this case, the occupier. In my view, the occupier, does
not,
at this stage
have a legal interest in the proceedings
which would warrant notice of the proceedings on them. This, in my
view would merely serve
to cause more delay in the finalisation of
the proceedings and to delay a judgment and the realization of a
plaintiff’s security
in order to satisfy the Defendants
indebtedness to it.
Judicial
oversight
[39]
It was further contended that the aim the
judicial oversight provided for in Rule 46A read with Practice
Directive 33A is aimed
at protecting a constitutional right.
This contention is of course correct.
The Constitution of
South Africa provides for justiciable socio-economic rights.
The right to access to adequate housing is
one of the rights
guaranteed in the Bill of Rights in section 26 of the Constitution.
[40]
As correctly stated, the Constitutional Court in
Jaftha v Schoeman
and Others, Van Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005 (2) SA 140
(CC)
stated the importance of the right of access to adequate housing, in
the following terms (in para [29]):
“
Section
26 must be seen as making that decisive break from the past.  It
emphasises the importance of adequate housing and
in particular
security of tenure in our new constitutional democracy.  The
indignity suffered as a result of evictions from
homes, forced
removals and the relocation to land often wholly inadequate for
housing needs has to be replaced with a system in
which the state
must strive to provide access to adequate housing for all, and where
that exists, refrain from permitting people
to be removed unless it
can be justified.”
[41]
Further reliance was sought in
ABSA
Bank v Mokebe
[35]
where the Johannesburg full court held that the right to adequate
housing is a fundamental human right enshrined in the Bill of
Rights
of our Constitution.
[36]
Consequently, orders to levy execution against property which are
primary residences are required to be in harmony with the

Constitution, which applies to all law.  The full court
confirmed the constitutional principle enshrined in section 172(1)(b)

of the Constitution, which empowers courts with a broad discretion
when deciding a constitutional matter within its power, to grant
just
and equitable relief.
[37]
[42]
The aforementioned dicta of the
Mokebe
case was confirmed in this division in
Standard
Bank of SA Ltd v Hendricks
[38]
where the full court remarked as follows (at para [1]):
“
Section
26(1) of the Constitution Act 108 of 1996 guarantees the right of
access to adequate housing, with the Constitutional Court  having

recognised in Jaftha v Schoeman and Others, Van Rooyen v Stoltz
and Others (Jaftha) that '(r)elative to homelessness, to have
a home
one calls one's own, even under the most basic circumstances, can be
a most empowering and dignifying human experience'.
Section 26(3) is
clear that no one is to be evicted from one's home 'without an order
of court made after considering all the relevant
circumstances’.”
[43]
What is apparent in these relied upon
cases, is that the protection that is afforded is the importance of
‘adequate housing’.
This means that judicial oversight is
for the protection of the most vulnerable in our society and where
the court’s ensure
that evicted persons are not left on the
side of the road without shelter. In my view, it could never have
been envisioned that
defendants who would have a surplus of
approximately R 15 million after the Trust debt has been expunged,
could claim that their
right to adequate housing has been infringed.
[44]
The
Defendants also relied on
Mkhize
v Umvoti Municipality and Others
[39]
where
the Supreme Court of appeal commented as follows in this regard:
“
[24]
We detect no ambiguity in the order in Jaftha. In that case and
later in Gundwana the Constitutional Court made
it clear
that in all cases of execution against immovable property judicial
oversight is required. Confusion was caused by
a multitude of
judgments seeking to come to terms with Jaftha. Determining
whether s 26(1) rights are implicated is a fact-based
enquiry.
In Gundwana Froneman J said the following:
"Some
preceding enquiry is necessary to determine whether the facts of a
particular matter are of the Jaftha-kind.''
...
[25]
...
[26] The
object of judicial oversight is to determine whether rights in terms
of s 26(1) of the Constitution are implicated.
In the main a number
of cases grappling with Jaftha sought to arrive at that determination
without accepting that judicial oversight
was required in every case.
How, it must be asked, can a determination be made as to whether s
26(1) rights are implicated, without
the requisite
judicial oversight? We are unable to understand the difficulty
of applying the principle that it is necessary
in every case to
subject the intended execution to judicial scrutiny to see whether s
26(1) rights are implicated. To not undertake
such an enquiry would
in fact render the procedure unconstitutional. Following that simple
principle would have avoided the confusion
caused by a number of
judgments.”
[45]
In
Hendricks
[40]
the full court stated that while the Constitution requires judicial
oversight over orders of execution made against immovable property

which is the primary residence of the judgment debtor, the manner and
extent to which this oversight has occurred has received
different
treatment in our courts.  This led to the promulgation
of Uniform Rule 46A, which came into effect on
22 December 2017.
[46]
This
however does not mean that a judgment creditor’s right should
be unduly curtailed by the claim of a Rule 46A defence.
In
Absa
v Mokebe
[41]
,
the court referred to the authors of Wille, who stated thus:
‘
The
right of the mortgagee or pledgee is to retain his hold over the
secured property until his debt is paid and, if the mortgagor
or
pledgor is in default, to have the property sold and obtain payment
of is debt out of the proceeds of sale.’
[47]
The Defendants argue that
judicial oversight is required in all instances where properties are
declared executable. In my view,
the issue of judicial oversight is
separate and distinct from the procedural requisite of complying with
Rule 46A and Practice
note 33. Rule 46A is only triggered when a
property is the primary residence of a debtor. The mere fact that
Rule 46A is not triggered
does not mean that there is  no
judicial oversight. Rule 46 deals with execution against immovable
property other than the
residential property of a judgment debtor.
In
Mkhize v Umvoti
Municipality and Others
[42]
,
Navsa and Snyders JA stated:
[24]
We detect no ambiguity in the order in
Jaftha.
In
that case and later in
Gundwana
the
Constitutional Court made it clear that in all cases of execution
against immovable property judicial oversight is required.
Confusion
was caused by a multitude of judgments seeking to come to terms
with
Jaftha
.
Determining whether s
26(1)
rights are implicated is a fact based enquiry. In
Gundwana
Froneman
J said the following:
‘
Some
preceding enquiry is necessary to determine whether the facts of a
particular matter are of the
Jaftha
-kind.
Only
once that enquiry has been undertaken can the question asked by
Wallis J, in the latter part of the quotation in para 23 above,
be
answered. The principle as described in our opening paragraph has
already clearly been established in
Jaftha
.’
[25]
It is clear from
Gundwana
that
insisting on judicial scrutiny in every case should hold no terrors.
The level of enquiry will vary from case to case and will
always
be dependent on the circumstances. As was pointed out
in
Gundwana
the
rule established in
Jaftha
‘
caution[s]
courts that in allowing execution against immovable property due
regard should be taken of the impact that this may have
on judgment
debtors who are poor and at risk of losing their homes’.
[26]
The object of judicial oversight is to determine whether rights in
terms of s 26(1) of the Constitution are implicated. In
the main a
number of cases grappling with
Jaftha
sought
to arrive at that determination without accepting that judicial
oversight was required in every case. How, it must be asked,
can a
determination be made as to whether s 26(1) rights are implicated,
without the requisite judicial oversight?. We are unable
to
understand the difficulty of applying the principle that it is
necessary in every case to subject the intended execution to
judicial
scrutiny to see whether s 26(1) rights are implicated. To not
undertake such an enquiry would in fact render the procedure

unconstitutional. Following that simple principle would have avoided
the confusion caused by a number of judgments.
[48]
It is clear that judicial oversight is required when all immovable
property is sought to be declared executable. The nature
of the
property and the nature of the debtor will ascertain whether or not
Rule 46A will be triggered. In this matter, it is clear
that the
facts peculiar in this instance are not akin to a ‘
Jafta
-kind’
scenario. It is also apparent that the First and Second Defendants
are also not poor or indigent that the risk of losing
their homes
situated on a commercial enterprise would render them homeless. To
impute such protection would make a mockery of the
very purpose that
guided the reasoning behind the
Gundwana
and
Jafta
judgments. Most certainly, the section 26(1) rights of the judgment
debtors would not be offended. This is because the protection

afforded in section 26(1), is the protection afforded to ones dignity
to have
adequate
housing and the States obligation to provide
such access to adequate housing.  Thus to suggest that a
person’s rights
in terms of section 26 will be infringed,
because he or she will no longer be able to live on property valued
at over R 40 million
is disingenuous and a flagrant disregard for the
protection of those that it is meant to serve. Furthermore, the use
of the employees
who reside on the farm as an excuse to escape
liability and the consequences of defaulting on several loans
advanced to the judgment
debtor  and the subsequent Settlement
agreement, is opportunistic and unfortunate. As I have stated
earlier, there are adequate
legislative protections available to
those who may be able to claim such a right, but it would be
premature to entertain these
considerations at this juncture in these
proceedings.
The
Settlement Agreement
[49]
Our courts have always
protected the integrity and sanctity of contract. In
Mohamed’s
Leisure Holdings (Pty) Ltd v Southern Sun Hotel Interests (Pty)
Ltd
[43]
,
the Supreme Court of Appeal reaffirmed the doctrine of
pacta
sunt servanda
and found
that it was impermissible to infuse principles of
Ubuntu
and good faith in matters of contract. In that case, it was a
material term of a lease agreement that should the respondent fail
to
pay the rental on due date, then the appellant would be entitled to
cancel the lease and retake possession of the property.
The court
a
quo
, although it had
accepted that the lessee had breached the agreement by failing to
make payment of the rental on due date, declined
to grant an eviction
order. The court reasoned that granting an eviction order would be
manifestly
unreasonable,
unfair and offend public policy. It concluded that the common law
principle,
pacta
servanda
sunt
,
should be developed by importing or infusing the principles of
ubuntu
and fairness in the law of contract.
[50]
In
Mohamed
the
court restated that the privy and sanctity of contract entails that
contractual obligations must be honoured when the parties
have
entered into the contractual agreement freely and voluntarily.
Self-autonomy or the ability to regulate one’s own affairs,

even to one’s detriment is the very essence of freedom and a
vital part of dignity.
[44]
[51]
In
Beadica 231 CC and Others v Trustees for the time being of the
Oregon Trust and Others
[2020] ZACC 13
, Theron J stated the
following:
“
[83] the first is
the principle that “[p]ublic policy demands that contracts
freely and consciously entered into must be honoured”.
This
Court has emphasised that the principle of
pacta
sunt
servanda
gives effect to the “central constitutional values of freedom
and dignity.” It has further recognised that
in
general
public policy requires that
contracting parties honour obligations that have been freely and
voluntarily undertaken.
Pacta sunt servanda
is
thus not a relic of our pre-constitutional common law. It continues
to play in the judicial control of contracts through the
instrument
of public policy, as it gives expression to central constitutional
values.
[84] Moreover,
contractual relations are the bedrock of economic activity and our
economic development is independent, to a large
extent, on the
willingness of parties to enter into contractual relationships.
If
parties are confident that contracts that they enter into will be
upheld, then they will be incentivised to contract with other
parties
for their mutual
gain
.
Without this confidence, the very motivation for social coordination
is diminished.
It is indeed crucial to
economic development that individuals should be able to trust that
all contracting parties will be bound
by obligations willing
assumed
”. (“my emphasis”)
[52]
The parties entered into a Settlement Agreement, freely and
voluntarily, wherein the judgement debt was admitted and an agreement

was made to declare the farm executable in the event of a default.
Public policy requires the Defendants to honour its obligations
that
have been agreed to with the Plaintiff.
[53]
As I have stated before, the defence raised by the Defendants that
they could not waiver the rights of the occupants when they
signed
the Settlement Agreement, is misguided.
[54]
The rights of the Plaintiff can never be ousted by the rights of
persons who have no legal interest in the matter; who are
not party
to the proceedings and more importantly, who enjoy comprehensive
legislative and constitutional protection in their own
right. It can
also never be so that the doctrine of notice should be extended to
persons who may claim personal rights, (where
no such legal rights
exists) to the detriment and prejudice of a judgment creditor.
Execution
against movables
[55]
It is trite that subject to rule 46(1)(a), no writ of execution
against the immovable property of any judgment debtor shall
be issued
unless a return has been made of any process issued against the
movable property of the judgment debtor from which it
appears that
the said person has insufficient movable property to satisfy
the writ.
[56]
According to the opposing affidavit, the Defendants are opposed to
having the movable assets attached and sold. They state
that the
movables, which consist of machinery and stock, both bulk and bottled
wine which is used in the operation of the winery
business, would
preclude the First Defendant from operating the business, which would
affect any possible investment in the business.
They also aver that
having recently valued the movable assets, stock and machinery, they
estimate the total value to be in the
region of R 5 million and this
means that even if Plaintiff were to be allowed to proceed with
execution against the movables,
the Trust’s indebtedness would
not be settled in its entirety and it will still require the sale of
the immovable property.
It would therefore not make commercial sense
for the Plaintiff to proceed against the movable property and
diminish the value of
the business as a going concern.
[57]
After a conspectus of the relevant facts, I am of the view that Rule
46A and Practice Directive 33A finds no application in
this matter. I
am also satisfied that on the evidence, this is not an instance where
the ‘primary residence’ of the
First and Second
Defendants is ‘nominally’ registered in the name of the
Trust, as for all intents and purposes, the
Trust and its property,
is a well-oiled commercial enterprise. I am also satisfied that no
section 26 rights will be infringed
upon the granting of this order.
The Plaintiff is entitled to its judgment and to have the property
declared specially executable.
[58]
I accordingly make the following order:
1.
Default judgment is granted in terms of
Rule 31(1)(c):
1.1 Against the First, Second Third
and the Fourth Defendants, in their representative capacities as
Trustees of the De Goede Hoop
Trust, IT1333/94 and against the First
Defendant in his personal capacity, the one paying the other to be
absolved for:
1.1.1
Payment of the amount of R5 529 477.36
plus interest at 12.50% per annum, calculated daily and capitalised
monthly from
1 September 2019 to date of payment, both days
inclusive;
1.1.2
Payment of the amount of R3 034 966.88
plus interest at 11% per annum, calculated daily and capitalised
monthly from 1
September 2019 to date of final payment, both days
inclusive;
1.1.3
Payment of costs on attorney and client
scale taxed or agreed.
1.2 Against First, Second, Third and
Fourth Defendants in their representative capacities as Trustees of
the Goede Hoop Trust. IT1333/1994:
1.2.1 That Portion 2 (a portion of
portion 1) of the Farm [...] Nr. [...], Division Stellenbosch,
Western Cape Province, held by
Deed of Transfer Number T49155/1996
(‘the property’) bonded to the Plaintiff under bond
numbers B44576/1996; B52086/1998,
B50589/2001, B62331/2004,
B60779/2008, B28099/2009, B29250/2013, B3479/2014 and B9582/2017 be
declared specially executable;
1.2.2 That the property be sold in
execution at a reserve price not less than R21 000 000;
1.2.3 Payment of costs on an attorney
and client scale as taxed or agreed.
KUSEVITSKY, J
JUDGE
OF THE WESTERN CAPE HIGH COURT
Counsel
for Appellant/Plaintiff: Advocate CW Kruger
Instructed
by Van Der Spuy Attorneys
Counsel
for Respondents/Defendants: Advocate Jan Hendrik Roux SC
Instructed
by Thomson Wilks Attorneys
[1]
Consolidated
Practice Notes, Western Cape High Court, Cape Town
[2]
2018 (6) SA 492 (GJ)
[3]
“
31
Judgment on confession and by default and rescission of judgments
(1)
(a)  …
(b) …
(c)  Such
confession shall then be furnished to the plaintiff, whereupon the
plaintiff may apply in writing through the registrar
to a judge for
judgment according to such confession.
[4]
I was
advised that the issue regarding the Intervening Applicant has been
resolved. The matter was also further delayed because
of the
COVID-19 pandemic which delayed the hearing of the matter.
[5]
Which accords to everyone the right to have access to
adequate
housing and Sections 26(3) in terms of which no person  may be
evicted from his/her residence without a court order. (“My

emphasis”)
[6]
Jaftha v Schoeman and Others, Van Rooyen v Stoltz and Others 2005
(2) SA 140 (CC)
[7]
Erasmus,
Superior
Court Practice, Volume 2, D1-632Q
[8]
Act 35 of
2005
[9]
United
reflective Converters (Pty) Ltd v Levine
1988 (4) SA 460
(W) at
463F-G
[10]
Standard
Bank v Hendricks
2019 (2) SA 620
at 641F-G
[11]
See section
1. A juristic person for purposes of the Act, includes a
partnership, association or other body of persons, corporate
or
unincorporated, or a trust if
(a)
there are three or more individual
trustees, or
(b)
the trustee itself is a juristic person,
but
does not include a
stokvel
.
[12]
The
constitutionality of the exclusion of juristic persons from the
ambit of the National Credit Act was challenged in
Standard
Bank of South Africa Ltd v Hunkydory Investments 194 (Pty) Ltd
2010
(1) SA 627
(C)
and
Standard
Bank of South Africa Ltd v Hunkydory 188 (Pty) Ltd
2010 (1) SA 634
(WCC)
on the basis that the distinction between juristic persons and
natural persons in the NCA violates the right to juristic persons
to
equality. Both the Supreme Court of Appeal and Constitutional Court
refused the Defendants leave to appeal, having concluded
that the
matter bears no prospect of success.
[13]
[2015] ZACC
5
[14]
At para 37
[15]
and
compliance with Practice Directive 33 of the Western Cape Practice
Directions
[16]
And this
list is not exhaustive
[17]
2006 (2) SA 264 (SCA) (2006 (9) BCLR 1022; [2006] 2 All SA 382
[18]
2012 (6) SA
166 (WCC)
[19]
ZAGPJHC/
Case
No. 33437/2019
[20]
Investec v
Fraser supra at para 50
[21]
See Fraser at para 55
[22]
In
Mtunzi
,
the court held that the legal
persona
of the judgment debtor was of no significance and that the trustees
in their official capacity did not have to be judgment debtors
for
Rule 46 A to be applicable
[23]
Fraser at
para 65
[24]
(30996/19)
[2020] ZAGPJHC 97 (10 May 2020)
[25]
Para 14
[26]
2019 JDR
1398 (GP)
[27]
[2004] 4 ALL SA 261 (SCA)
[28]
at [10]; See also Commissioner for Inland Revenue v MacNellies’s
Estate
1961 (3) SA 833
(A) 840D-H; Commissioner for Inland Revenue v
Friedman NO
[1992] ZASCA 190
;
1993 (1) SA 353
(A) 370E-I
[29]
At [18]
[30]
See for instance Rule 46A(3)b
[31]
See for instance Rule 33A affidavit, paras 4.21 and 4.24
[32]
Case No.
727/2016
[33]
At para 12
[34]
Mgedesi
para 16
[35]
See footnote 1
[36]
Section 26 of the Constitution: ‘
Housing
(1) Everyone has the right to have
access to adequate housing.
(2) The state must take reasonable
legislative and other measures, within its available resources, to
achieve the progressive
realisation of this right.
(3) No one may be evicted from their
home, or have their home demolished, without an order of court made
after considering all
the relevant circumstances. No legislation may
permit arbitrary evictions’
[37]
Mokebe, supra, para 31
[38]
2019(2) SA 620 (WCC)
[39]
2012 (1) SA 1
(SCA) paragraphs 24-26
[40]
Supra, at para [2]
[41]
2018 (6) SA
492
at para 1
[42]
supra at
paras 24-26
[43]
(183/17)
[2017] ZASCA 176
(1 December 2017)
[44]
See Mohamed’s Leisure Holding at paras 23 and 25