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[2014] ZAGPJHC 352
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Sheriff of the High Court, Johannesburg East v Chetty and Others; InRe: Firstrand Bank Limited T/A FNB Home Loans (Formerly First National Bank of Southern Africa Limited v Chetty and Another (2009/3673) [2014] ZAGPJHC 352 (27 March 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 2009/3673
DATE:
27 NOVEMBER 2014
In
the matter between:
THE
SHERIFF OF THE HIGH COURT,
JOHANNESBURG
EAST
............................................................
Applicant
And
CHETTY:
NAYANDRAN
..................................................
First
Respondent
CHETTY:
LYNETTE MUNSAMI
.................................
Second
Respondent
CHOPDAT:
HABEEBAH
...............................................
Third
Respondent
FIRSTRAND
BANK LIMITED (trading inter alia as
FNB
HOME LOANS) (formerly FIRST NATIONAL BANK
Of
SOUTHERN AFRICA LIMITED)
............................
Fourth
Respondent
IN
RE:
FIRSTRAND
BANK LIMITED (trading inter alia as
FNB
HOME LOANS (formerly FIRST NATIONAL BANK
OF
SOUTHERN AFRICA LIMITED)
And
CHETTY:
NAYANDRAN
................................................
First
Defendant
CHETTY:
LYNETTE MUNSAMI
................................
Second
Defendant
J
U D G M E N T
MBONGWE,
AJ
[1]
The applicant, who is the Sheriff and officer of this Court, launched
thisapplication in terms of the provisions of Rule 46
(11) of the
Rules of the Court and seeks an order cancelling a sale in execution
of an immovable propertythat was concluded on
the 23rd January 2014
between him and the third respondent. He also seeks ancillary relief,
inter alia, an order authorising himto
retain the deposit of R46
100.00 paid by the third respondent for the purpose of recouping
costs incurred on an attorney and own
client scale aswell as for the
settlement of amounts that may be due to other parties consequent to
the cancellation of the sale.
[2]
This application comes before this Court unopposed owing to the
thirdrespondent’s failure to serve and file an answering
affidavit subsequent to his service and filing of a notice of
opposition on the 23rd May 2014. The applicanthas cited three other
respondents: the first and second respondents, who are the erstwhile
owners of the property concerned and judgement debtors,and
the fourth
respondent, the bank in whose favour a mortgage bond over the
property was registered in 2007 and the judgement creditor.
There are
nocosts sought against the first, second and fourth respondents. It
is alleged that the fourth respondent waived its
right to service of
this application on it.
[3]Prior
to considering the merits of this application, I deem it necessary,
in the light of the circumstances of this case, to
reiterate the
purpose and intention of the provisions of Rule 46(11). These are to
expedite the sale of attached immovable property
primarily for the
benefit of the judgement creditor and other interested parties. While
it is not the purpose of this rule, an
expeditious sale of attached
immovable property may incidentally curtail a continued growth of
the financial burden already faced
by the judgement debtor in
respect of the property.
[4]In
considering an application in terms of Rule 46(11), the Court is
reliant on the report by the Sheriff. Consequently, it is
imperative
that the Sheriff discloses all relevant facts in the founding
affidavit particularly where, as is thecase here, orders
for the
cancellation of prior sales had been granted. In this regard it is
noted that more often than not the Sheriff, amongst
the prayers
sought, seeks an order authorising him to retain the deposit that had
been paid by the purchaser for the purposes already
stated above. The
Court will naturally be reluctant to grant any subsequent application
in terms of Rule 46(11) unless the Sheriff
:
4.1
has declared in the founding affidavit that he had served the
previous cancellation order on the respondent affected thereby
and
attached proof of such service;
4.2
has declared and attached all relevant proof, including a taxed bill
of costs, of the costs he had deducted from the deposit
he had
previously retained, where the sale concerned had occurred more than
twelve months prior to the one sought to be cancelled
or where
another sale had been concluded prior to the lapse of the period of
twelve months;
4.3
has attached proof of payment of any balance due to the previous
respondent (purchaser). It follows that an application for
an order
cancelling a sale of immovable property in terms of Rule 46(11) will
not be granted unless the Sheriff can show that he
is not keeping
more than one deposit that had been paid in respect of the same
property.
[5].Although
in respect of the previous applications in this case the Court had
granted only orders of cancellation of the sales
in execution, but
remained silent on the prayers for the retention by the applicant of
the deposit he had received, copies of
those orders should have been
served on the parties affected thereby for them to appreciate the
process and be able to follow
up on the balance of the deposits they
had paid to the Sheriff.
[6]
Subsequent to the fourth respondent obtaining a default judgment
against the first and second respondents in June 2010 for the
payment
of the total balance due on the property in the sum of R1 463 044.82
and an order declaring the property described as Portion
1 of Erf 280
Lombardy East Township, Registration Division I.R, The Province of
Gauteng measuring 2024m2 and held under Deed of
Transfer T104560/2007
specially executable, the applicant eventually attached the property
on the 15 February 2011.
[7]
The applicant has alleged that he had published the notices of sale
in execution of the immovable property by public auction
scheduled
for the 25th January 2014 in both the Government Gazette and the
Citizen Newspaper (Paragraph 11 of the founding affidavit),
but no
proof of such publications is attached to the founding affidavit. The
property was sold to the third respondent on the 23rd
January 2014.
The relevant conditions of sale now sought to be cancelled were
signed by the third respondent on the 23rd January
2014 and by the
applicant seemingly on the 3rd January 2014.
Further,
the allegations in paragraphs 10 and 11 of the founding affidavit are
misleading for creating a false impression that
the sale to the
third respondent was the first since the property was attached on
the 15th February 2011. Documentation in the
court file, which
include previous cancellation
orders,
show that this particular property had been sold at least thrice
since its said attachment and prior to it being sold to
the third
respondent as follows:
7.1
sold to a Lebea V.T on the 4th November 2011. There is no document in
the file showing what the purchase price was nor the amount
of the
deposit that was paid. However, the fact that this particular sale
was cancelled by an order of this Court on the 13th December
2011
suggests that a valid agreement of sale had been concluded and the
required 10% deposit and commission paid ;
7.2
sold to Ingolex Proprietary Limited on the 19th July 2012 for the
amount of R630 000.00 and a deposit of R63 000.00 and the
Sheriff’s
commission paid. This sale was cancelled by an order of this Court on
7 December 2012 on application by the Sheriff;
7.3
sold to Ismail Dawood Jassat and Muhammad Chothia on the 11th April
2013 for R630 000.00. A deposit of R63 000.00 and the applicant’s
commission was paid (Paragraphs 13 and 14 of the then founding
affidavit in support of the application for an order for the
cancellation
of the said sale). In addition to seeking an order for
the cancellation of that sale, an order was sought for the applicant
to
retain the deposit for the purpose already stated earlier in this
judgment. There is neither a document showing that this application
was ever set down and heard nor a Court Order in the file relating to
the outcome of the application in this particular instance.
[8]
It is noted that the original court file got lost at some stage and
could not be traced and that the present file is a duplicate
reconstructed by the applicant’s attorneys. However, the loss
of that file and contents is of no consequence in the present
application and to the sales referred to in the preceding paragraph
as they occurred after the duplicate file had been opened.
[9]
Of further and primary concern to this Court is the absence in the
court file of any proof that bills of costs were taxed in
respect of
the previous applications and cancellation orders. This is despite
the Sheriff’s prayers in those applications
that he be
authorised to keep each deposit paid for at least twelve months or
until a subsequent sale of the property. The cancellation
orders in
the file were granted longer than twelve months ago and there had
been subsequent sales of the property. It is, consequently,
uncertain
whether the Sheriff has ever accounted fully to the relevant
respondents for the deposits he had retained. I find that
this
situation cannot be allowed to persist and ought to be eradicated for
it opens the Rule 46(11) procedure to abuse.For this
reason I direct
that a copy of this judgment be served on the Board of Sheriffs.
[10]
In the present application the property was sold to the third
respondent on the 23rd January 2014 for the sum of R461 000.00.
A
deposit of R46 100.00 together with the Applicant’s commission
was paid on the same date (Paragraph 13 and 14 of the founding
affidavit). The balance of the purchase price in the amount of R414
900.00 was paid by the third respondent on the 26th February
2014
(Paragraph 16).
[11]
The applicant’s ground for seeking cancellation of the sale
agreement is the third respondent’s failure to pay
the
estimated amount of R142 612.00 due to the Municipality as well as
the transfer costs of R13 604.00 in terms of the conditions
of sale.
The applicant further seeks an order authorising him to retain the
deposit of R46 100.00 paid from which to recoup his
costs on an
attorney and own client scale, inter alia. It is curious that the
applicant is silent on how he intends to deal with
the balance of the
purchase price in the sum of R414 900.00.
[12]
With regard to payment of the Municipal balance estimated at R142
612.00, I do not believe that the Sheriff has done his best
to
comply with his obligations in terms of the conditions of sale as he
alleges. Stating an estimated amount in clause 4.8.1 is,
in my view,
not sufficient particularly when regard is had to the provisions of
Section 118(3)
of the
Local Government Municipal Systems Act 32 of
2000
in terms of which the third respondent becomes liable to pay
only the debt due to the Municipality which was incurred during the
period of two years prior to the date the request for a clearance
certificate is made. The estimation by the Sheriff falls short
of
meeting the provisions of the said section. It is, in my view, the
duty of the Sheriff or judgment creditor to request a clearance
certificate from which the exact amount owing appears for inclusion
in the conditions of sale as required. The importance of establishing
the debt to the Municipality and the period during which it was
incurred was as recently as the 8th September 2014 reiterated in
the
judgment of the Gauteng Division of the High Court in PERREGRINE
JOSEPH MITCHELL v CITY OF TSHWANE METROPOLITAN MUNICIPAL
AUTHORITY,
CASE NO. 48313/2013 (unreported). In the result, I find that the
estimated balance due to the Municipality renders the
provisions of
clause 4.8.1 of the conditions of sale invalid. Thus this application
stands to fail.
[13]
It is also important in this judgment to state that the alleged yet
unconfirmed waiver by the fourth respondent of the right
to be served
with this application constitutes non-compliance with the rules
especially as the fourth respondent is a major role
player in this
case.
[14]
Consequent to the findings in this judgment, the following orders are
made:
1.
The application is dismissed.
2.
The applicant is ordered to serve a copy of this judgment on the
respondents and, in respect of the third respondent, to also
serve
proof of the exact amount due to the municipality and call upon the
third respondent to settle such amount and transfer costs
within 30
days from the date of service on him of this judgment which date
shall also serve as the date on which the conditions
of sale became
effective for purposes of determining any breach of the conditions
of sale.
3.
The applicant is ordered to submit to the Registrar of this Court an
affidavit with relevant proof relating to the deposits held
by him in
respect of the sales in execution concluded on the 4th of November
2011, 19 July 2012 and 11 April 2013.
4.
It is ordered that a copy of this judgment be served on the Board of
Sheriffs.
5.
The applicant is ordered to pay the costs of this application.
M.
MBONGWE, AJ
ACTING
JUDGE OF THE HIGH COURT OF SOUTH
AFRICA,
GAUTENG LOCAL DIVISION, JOHANNESBURG
APPEARANCES
Counsel
for the Applicant : Adv. M. De Oliveira
Attorneys
for the Applicant : Van Hulsteyns Attorneys, Johannesburg
Date
of hearing : 22nd September 2014
Date
of judgment : 27th November 2014