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[2014] ZAGPJHC 144
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Papas N.O. v Motsere Trading CC and Others (46011/2012) [2014] ZAGPJHC 144 (6 June 2014)
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REPUBLIC
OF SOUTH AFRICA
IN THE GAUTENG
HIGH COURT
LOCAL DIVISION,
JOHANNESBURG
CASE
NO: 46011/2012
DATE:
6 JUNE 2014
NOT
REPORTABLE
OF
INTEREST TO OTHER JUDGES
In
the matter between
CONSTANTINOS
PAPAS
NO
..........................................................................................
APPLICANT
and
MOTSERE TRADING
CC
...............................................................................
FIRST
RESPONDENT
TEMIS BUSINESS
ENTERPRISES
CC
....................................................
SECOND
RESPONDENT
DLUKULA RONALD
NTOMBELA
..............................................................
THIRD
RESPONDENT
HLONGWA ATTORNEYS
& CONVEYANCERS
...................................
FOURTH
RESPONDENT
THE REGISTRAR OF
DEEDS, JOHANNESBURG
....................................
FIFTH
RESPONDENT
Ownership
of immovable property - application for a declarator that deceased is
lawful owner of immovable property - only first
respondent opposed
application in challenging the deceased estate’s title - owner
of property (now deceased)concluded an
Abandonment Agreement with the
City of Johannesburg (COJ) - in terms thereof deceased abandoned
property to the COJ in exchange
for set-off of his arrear
indebtedness in respect of property municipal rates and taxes -
deceased died subsequently and property
vesting in deceased’s
estate - property fraudulently transferred from deceased to first
respondent and from first to second
respondent -agreement analysed
and interpreted - principles of abandonment examined and re-stated -
agreement not amounting to
an abandonment – deceased estate
therefore declared the lawful owner of the property - costs of
application - fraudulent
conduct by attorneys and involvement of
Registrar of Deeds in fraudulent transfers - no explanation tendered
by either - costs
ordered against them as well as against the
unsuccessful first respondent
J
U D G M E N T
VAN
OOSTEN J:
[1]
This is an application brought
by the applicant, in his capacity as the executor in the deceased
estate Michael Papas (Papas), for
a declarator that the deceased
estate is the owner of a certain immovable property. Only the second
respondent (Temis) opposed
the relief sought. The fifth respondent,
although not having entered the fray has submitted a report to this
court, to which I
will revert later in the judgment.
[2]
The issue in the application concerns the ownership of an immovable
property, described as Erf […], Johannesburg (the
property).
It is common cause that Michael Papas (the deceased) was the
registered owner of the property. On 24 January 2006 the
deceased
entered into a written agreement with the City of Johannesburg (the
COJ) styled, Abandonment Agreement. The deceased was
in arrears with
payment of taxes and municipal service fees in respect of the
property, in the sum of R3m. In terms of the agreement
the deceased
‘abandoned’ the property in favour of the COJ, in
exchange for a set-off of the indebtedness in respect
of taxes and
service fees (the agreement). The deceased died on 25 June 2008 and
Papas was duly appointed the executor in the deceased
estate which
was vested with all the assets of the deceased including the
property. In July 2012 Papas discovered that the property
had
unbeknown to him, been sold to another party. Upon investigation it
became apparent, and this is common cause, that the property
had been
transferred on 27 June 2012 from the deceased to the first respondent
and simultaneously therewith from the first respondent
to Temis. Both
transfers were fraudulent involving the first, third, fourth and
fifth respondents. Temis is an innocent party having
purchased the
property for a purchase consideration of R1m. Against this background
Papas seeks a declarator that the estate is
the lawful owner of the
property and for an order setting aside the fraudulent transfers of
the property. For the sake of completeness
I need to add that an
order was granted by Spilg J on 18 December 2013, in terms of part A
of the notice of motion, in effect preserving
the property pending
finalisation of this application, which is part B of the notice of
motion.
[3]
The basis of opposition to the application by Temis is that the
applicant does not have the requisite
locus standi
to
vindicate the property. Temis does not assert ownership of the
property but simply contends that the deceased in concluding
the
agreement, unilaterally abandoned the property to the COJ. Some vague
reference was made in the papers to the alleged abandonment
being
bilateral but this was, wisely I should add, not pursued before me.
Estoppel, although raised in the papers, was likewise
not persisted
in. The sole issue I am accordingly required to determine is whether
the deceased in fact abandoned the property
when the agreement was
concluded.
[4]
An abandonment of property by the owner thereof, with the intention
to relinquish ownership, results in the loss of ownership
by
derelicto.
The abandoned property becomes
res nullius
and is open to acquisition by another (see
Reck v Mills en ‘n
ander
1990 (1) SA 751
(A) 757C-D;
Wille’s Principles of
South African Law
9
th
ed 490/1; CG van der Merwe
Sakereg
2
nd
ed 377
).
For abandonment there
must be an intention by the owner to abandon the property (see
Meintjes NO v Coetzer and others
2010 (5) SA 186
(SCA) [16]).
Whether a clear intention of abandonment exists is a question of fact
to be proved in each case (cf
Salvage Association of London v SA
Salvage Syndicate
1906 SC 169
at 171;
Goldstein & Co (Pty)
Ltd v Gerber
1979 (4) SA 930
(A) 936/7). The act relied on for
evidencing the deceased’s alleged intention to abandon in the
present matter is the conclusion
of the agreement. It is accordingly
necessary to consider and interpret the relevant provisions of the
agreement.
[5]
The recitals in the preface to the conditions in the agreement record
that the ‘seller’ (the deceased) is indebted
to the
‘purchaser’ (the COJ) in the sum of approximately R3m, in
respect of arrear rates and municipal service fees;
that ‘the
seller’ has agreed to abandon the property to ‘the
purchaser’ in lieu of ‘the purchaser’s’
claim; that the parties have agreed to ‘set-off any purchase
consideration against the arrear amounts due to the purchaser’
and ‘the purchaser wishes to take transfer of the property on
the basis aforesaid’. The ‘abandonment’ of
the
property and the
quid pro quo
in respect thereof, are provided
for as follows:
‘
2.
ABANDONMENT
The SELLER hereby abandons to the
PURCHASER who hereby accepts the property on the terms and conditions
set out herein.
3.
ABONDONMENT CONSIDERATION
3.1 The purchase price for the
property shall not be paid by the PURCHASER but shall, and
immediately prior to registration, be
set-off against the PURCHASER’S
claim against the SELLER in respect of arrear rates and municipal
service fees in connection
with the property.
3.2 In addition to the aforesaid,
registration will constitute a full and final settlement of all
claims by the PURCHASER against
the SELLER in respect of arrear rates
and municipal service fees up to date of registration in connection
with the property.
3.3
It is specifically recorded that the PURCHASER reserves all its
rights to recover any amounts in respect of the aforesaid arrear
rates and municipal service fees from any other source from which it
may recover such amounts.’
Finally,
as to possession and risk concerning the property, the agreement
provides:
‘
5.
POSSESSION AND RISK
Upon
signature of this agreement:
5.1
All the benefits and risks of ownership including the right of
possession of the property shall pass to the PURCHASER;
5.2
The PURCHASER shall be entitled to any rents accruing from the
property.’
[6]
The words indicating abandonment, one the one hand, and a purchase
and sale on the other, are used interchangeably and in themselves
are
not conclusive of any particular meaning in interpreting the
agreement. Counsel for Temis contended that the provisions of
clauses
and 2 and 5, read together, unequivocally show an intention by the
deceased to abandon the property. I am unable to agree.
The use of
the word ‘abandon’ in clause 2 is of no moment: it must
be read in the context of the agreement as a whole.
Nor do the
provisions of clause 5 support counsel’s contention: the
benefits and risks mentioned in the clause are merely
incidental to
ownership which an owner is entitled to alienate without thereby
relinquishing ownership. As correctly pointed out
by counsel for
Papas, ownership of immovable property, in any event, is transferred
only and therefore vests upon registration
in terms of s 6 of the
Deeds Registries Act, 47 of 1937 (the Act).
[7] The terms and
conditions of the agreement, in my view, are clear. It does not
provide for an abandonment of the property by
the deceased. The word
abandon is used merely to convey the notion of the deceased
surrendering the property to the COJ in exchange
for a set-off of his
indebtedness which constitutes the
quid pro quo
. Abandonment
in the face of a
quid pro quo
is plainly legally untenable.
Until the final registration of the property in the name of the COJ
has occurred, the deceased remains
the owner thereof: as much is to
be inferred from the express provision in clause 3.1 quoted above,
providing for the set-off to
take place ‘immediately prior to
registration’. Pending registration of transfer the parties are
in a contractual relationship
in respect of which the usual
contractual remedies in the event of a breach of contract apply.
Counsel for Papas has referred me
to the article by Prof JC Sonnekus
(
TSAR
2004-4, at 747) where the legal nature and effect of
contracts, such as the agreement we are here concerned with, are
dealt with.
The conclusion with which I am in agreement, reads as
follows:
‘
In
die lig van die voorgaande is dit duidelik dat dit in belang van
beide partye sou wees om ‘n uitdruklike ooreenkoms te
bereik
waarkragtens die plaaslike owerheid onderneem om die grondeienaar
kwyt te skeld van alle aanspreeklikheid vir enige verskuldigde
bedrae
wat verband hou met die tersake perseel mits die grondeienaar die
eiendom aan die plaaslike owerheid oordra. Die kern van
sodanige
ooreenkoms sit eintlik reeds in kiem in die formulering benut deur
die plaaslike owerheid in die hierbo aangehaalde formulering
as daar
sprake is dat die owerheid “will write off the outstanding
balance”. Die implikasie is dat die owerheid
quasi
die perseel by die grondeienaar “koop” teen die
ooreengekome bedrag wat die skuldoorsaak uitmaak van die vordering
wat aan die wortel van die litigasie lê, maar dat die partye
van die verskuldigde bedrag die eiendomsreg op die perseel aan
die
owerheid oorgedra word. Omdat ‘n “normale”
afgeleide en geen oorspronklike wyse van regsverkryging nie ter
sprake is, sou dit egter ook ‘n uitdruklike afspraak
veronderstel dat die owerheid die nodige “klaringsbewys”
sonder verdere omhaal sal uitreik ten einde die oordrag in sy eie
naam te kan registreer. Die owerheid kan daarna oor die perseel
as
regmatige eienaar beskik en kan byvoorbeeld besluit om dit aan te
wend vir hersoneerde benutting as informele of minder formele
dorpstigting of ‘n behuisingskema waarmee die behuisingsnood in
die omgewing aangespreek sal word en waarmee terselfdertyd
die huidig
negatiewe persepsie oor die omgewing verander kan word deur aan die
regmatige nuwe okkupeerders ‘n sin van betrokkenheid
by die
nuwe behuisingskema en buurt te kweek. Sodoende word die
primêre verantwoordelikhede van die plaaslike owerheid
jeens
die behoeftiges ten beste gedien en is die voormalige grondeienaar
terselfdertyd die meulsteen wat die perseel vir hom geraak
het,
kwyt.’
[8]
For all these reasons I conclude that Temis has failed to discharge
the onus to prove an abandonment of the property by the
deceased
(
Meintjes
para [16]). It follows that the application must
succeed.
[9]
It remains to deal with the costs of this application. Counsel for
Papas submitted that Temis was opportunistic in opposing
the relief
sought by Papas as it in any event did not assert ownership, and that
its opposition has not advanced the matter in
any way. For these
reasons counsel asked for a punitive costs order against Temis. I am
not satisfied that a punitive costs order
is justified. It is true
that Temis in the present application could not in effect achieve any
positive result. On the other hand
all aspects concerning the
property, in particular such entitlement as Temis may have in regard
damages it may have suffered, have
not yet been dealt with. Temis
after all is an innocent purchaser of the property. I am accordingly
not inclined at this stage
to come to any final conclusions as far as
those aspects are concerned. It follows that the normal costs as
between party and party
ought to apply.
[10]
Finally, I am called upon to comment on the conduct of the third,
fourth and fifth respondents concerning their involvement
in the
fraudulent transfers I have alluded to. The third respondent is an
attorney and conveyancer as well as a commissioner of
oaths and the
fourth respondent a firm of attorneys and conveyancers. Their
involvement in the transfers arises from the fact that
they were not
in possession the original Deed of Transfer in the name of the
deceased, which was a requirement for effecting the
transfers. An
application in terms of regulation 68(1) promulgated under the Act,
was accordingly submitted. The preparation clause
thereof was signed
by the third respondent on behalf of the fourth respondent. An
affidavit purportedly deposed to by the owner,
the deceased, was
filed, declaring
inter alia
that the original deed had
actually been lost or destroyed. It purports to have been
commissioned by the third respondent on 15
May 2012, which was almost
four years after the deceased had died. The deceased’s
signature to the affidavit was clearly
forged. The document
accordingly was forged for the purpose of effecting the transfers.
Full particulars of the third respondent’s
fraudulent conduct
are set out in the founding affidavit in this application which was
duly served on the third and fourth respondents.
Neither of them has
filed any response to the application, although a costs order is
sought in the notice of motion against all
the respondents. The
conduct of the third and fourth respondents not only deserves the
censure of this court which is to be reflected
in the costs order I
propose to make, but also needs to be referred to the Law Society for
investigation and possible disciplinary
steps.
[11]
This brings me to the fifth respondent. Allegations concerning
untoward conduct by officials employed in the office of the
Registrar
of Deeds are made in this application. The transfers were effected in
the face of a caveat, dated 30 May 2012, in terms
of which ‘the
property should not be transferred without the written consent of the
City of Johannesburg’. In addition
hereto the power of attorney
lodged with the Registrar of Deeds was patently defective in numerous
aspects. All these defects having
been brought to the attention of
the Registrar of Deeds in a letter by the attorneys acting for the
COJ, dated 4 October 2014,
elicited nothing but the lame response
that the Registrar of Deeds had no authority to note an interdict
other than a court order.
The Registrar of Deeds filed a report in
this matter but none of the serious allegations made against it, are
dealt with. This
conduct is plainly unacceptable and deserves the
censure of this court to be reflected in the costs order that I
propose to make.
Finally, the employment of two counsel by the
applicant for the hearing of this matter was clearly warranted.
[12]
In the result I make the following order:
1.
It is declared that the
estate of the late Michael Papas (Estate Number […]) is the
lawful owner of the immovable property
described as Erf […],
Johannesburg Township, Registration Division IR, Province of Gauteng
(‘the property’).
2.
The transfer of the
property to the first respondent and the subsequent transfer of the
property to the second respondent is cancelled
and set aside.
3.
The fifth respondent is
directed to take all such steps and do all such things and make all
such endorsements as may be required
to give effect to paragraphs 1
and 2 of this order.
4.
The first, second,
third and fourth respondents (and anybody in the fourth respondent’s
employ) are interdicted and restrained
from selling or purporting to
sell, transfer or otherwise alienate the property to any third party
or encumbering or dealing in
any way with the property.
5.
The second respondent,
the third respondent and the fifth respondent are ordered jointly and
severally, the one paying the other
to be absolved, to pay the costs
of this application, including:
5.1The costs
reserved on 18 December 2013; and
5.2
The costs consequent
upon the employment of two counsel, where so employed.
6.
A copy of this judgment
must forthwith be sent to the Law Society for the Northern Provinces
in Pretoria for the purpose of an investigation
to be conducted into
the conduct of the third and/or fourth respondents as set out in this
judgment.
_________________________
FHD
VAN OOSTEN
JUDGE
OF THE HIGH COURT
COUNSEL
FOR APPLICANT: ADV SJ DU PLESSIS SC
ADV
AW PULLINGER
ATTORNEYS
FOR APPLICANT: MOODIE & ROBERTSON
COUNSEL
FOR SECOND RESPONDENT: ADV EL THERON
SECOND
RESPONDENT’S ATTORNEYS: ROSSOUWS LESLIE INC
DATE
OF HEARING: 28 MAY 2014
DATE
OF JUDGMENT:6 JUNE 2014