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[2015] ZAGPJHC 287
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Maine v Mosebo and Others (46283/13) [2015] ZAGPJHC 287 (13 August 2015)
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REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO: 46283/13
DATE: 13 AUGUST 2015
In the matter between:
MAINE TEBOGO
GOODMAN
..............................................................................................
Applicant
And
RICHARD TLABI
MOSEBO
.....................................................................................
First
Respondent
SINDISWA
MTHOMBENI
.....................................................................................
Second
Respondent
TONY ABRAM DUBE and NOMBAGO ELSIE
DUBE
........................................
Third
Respondent
CITY OF
JOHANNESBURG
..................................................................................
Fourth
Respondent
CASE SUMMARY: Application for
Eviction.
Applicant alleging he is the owner of
the premises; purchased at sale in execution. Third Respondents
previous owners of the property.
Property “sold” to First
and Second Respondent pursuant to illegal transaction [Brusson
Scheme]. No intention on part
of Third Respondents to sell the
property. No intention on part of First and Second Respondents to
purchase the property. First
and Second Respondents defaulting on
bond repayments. Bank obtaining judgment against the First and Second
Respondents; property
sold in execution. Bank aware that transaction
tainted by unlawful Brusson scheme. Despite such knowledge,
instructing sheriff
to sell. No rights could pass to Applicant as
First and Second Respondents had no lawful rights to transfer.
Applicant and Bank
alleging Third Respondents had waived their rights
for failing to set aside sale. Original transaction void ab initio;
therefore
entire transaction unenforceable. Waiver not applicable.
Rescission by Third Respondents of judgment against First and Second
Respondent.
Such right exists. Third Respondent joining Bank and
other interested parties. Order for joinder and retransfer of
property to
Third Respondent granted. Bank ordered to show cause why
it should not be jointly and severally liable for costs.
J U D G M E N T
WEINER, J:
[1] The applicant applies for the
eviction of the third respondent (the Dubes) in terms of the
Prevention of Illegal Eviction from
and Unlawful Occupation of Land
Act 19 of 1998 (the PIE Act).
[2] The third respondent was initially
cited as “the occupants of Erf 8……, D………
Extension
2, Johannesburg”. Mr Dube delivered an answering
affidavit as the third respondent (together with his wife). The
first and
second respondents do not oppose the relief. They do not,
and have never, resided at the property. They will be referred to as
“the investors”.
FORMALITIES
[3] The applicant complied with
section 4(1) and 4(2) of the PIE Act. The applicant submits that it
is the registered owner of
the property situate at Erf 8…….,
D……. Extension 2, Johannesburg situate at 8……..
M…..
Street, D…….. Extension 2 (the property).
[4] The property was registered in the
applicant’s name on the 10th July 2013.
[5] The applicant describes the Dubes
as unlawful occupiers as defined in the PIE Act which provides:
“’Unlawful occupier’
means a person who occupies land without the express or tacit consent
of the owner or person
in charge or without any other right in law to
occupy such land, excluding a person who is an occupier in terms of
Extension of Security of Tenure Act 1997
and excluding a person whose
informal right to land, but for the provisions of this Act, would be
protected by the provisions of
the Interim Protection of Informal
Rights Act 1996.”
.
[6] It is common cause that the
applicant became the registered owner of the property by virtue of a
sale in execution and that
the property was sold without any lease.
[7] The applicant’s attorneys
requested in a letter of demand that the Dubes vacate the premises
and such letter was served
by the Sheriff on the 21st November 2013.
THE ISSUES IN DISPUTE
[8] The applicant contends that the
respondent’s attempts at raising a dispute are ill-conceived
and that there is no bona
factual dispute in relation to the
applicant’s ownership of the property.
[9] The Dubes, on the other hand,
contend that their rights as owner were terminated fraudulently; that
a sale to the investors
was fraudulent; the mortgage bond was invalid
and therefore the sale in execution was invalid, and transfer could
not have taken
place to the applicant.
THE DUBES INVOLVEMENT IN THE BRUSSON
SCHEME
[10] It is common cause that the Dubes
were victims of the so-called “Brusson scheme”. Mr Dube
states that he, on or
about and during 2006, approached Brusson
Finance (Pty) Ltd (Brusson) as his rates and taxes were in arrears in
the sum of approximately
R38 000,00. He attended at the offices of
Brusson, in order to obtain a loan and signed various documents,
which he believed expressed
his intention. However, due to Brusson’s
misrepresentation, the documents he signed had the effect of
transferring the property
to the investors by virtue of an illicit
scheme. Through the scheme, the employees of Brusson deceived the
Dubes into signing documents
purporting to transfer the property to
the investors. The Dubes had been specifically misled by Brusson
into believing that the
documents were formalities in the conclusion
of a loan agreement. The applicant, although having no direct
knowledge of these
events, does not dispute same.
[11] Dube made certain payments to
Brusson.
[12] He was contacted in about May
2010 and informed that he had to make payments directly to the
investors. Certain payments were
made to them as well. He was
contacted in June 2010 by one of the investors and informed that he
(the investor) now owned the property.
[13] Much of the factual evidence
relating to the Brusson scheme is common cause and has been dealt
with in numerous judgments
in this and other divisions of the High
Court. Chohan AJ in the matter of Moore and Another v The Sheriff of
the District of Vereeniging
and Another Case No 22082/2013 handed
down on the 26th September 2014 in the Gauteng Local Division
summarised the previous cases
dealing with this scheme.
[14] Reference was made by Chohan AJ to
the following cases:
14.1 Ditshego and Two Others v Brusson
Finance (Pty) Ltd Case no 5144/09 unreported judgment 2013 JDR 2440
FB;
14.2 Mabuso v Nedbank Ltd and Another
Case No 67456/10 Delivered on 24 June 2014 GNP;
14.3 Absa Bank v Boshoff [2012]
ZAECPEHC 58;
14.4 Jacobs v Nedbank unreported
judgment 2012JDR 1873 GNP;
14.5 RealOboho Innocentia Leshoro v
Nedbank and Another
[2014] ZAFSHC 89
;
14.6 Radebe v Nedbank and Others
unreported judgment of Nicolls J handed down on 25 September 2014 .
[15] From all of these judgments the
following emerges:
15.1 The applicants fell into financial
difficulties and were looking to secure a loan which they could not
obtain through a registered
financial institution.
15.2 The applicants apparently saw an
advertisement by Brusson that they would advance monies to the
applicants with certain security.
15.3 The applicants concluded
agreements believing that they were concluding a loan agreement when
in fact the agreements obliged
them to transfer the immovable
property to a Brusson investor, who in turn concluded agreements to
resell that property back to
the applicant in instalments.
15.4 The Brusson investors would
utilise the immovable property as security in order to obtain finance
from a registered financial
institution and a mortgage bond would be
registered over the immovable property.
15.5 The Brusson investors invariably
defaulted on their payments to the financial institution. Proceedings
were instituted by the
Banks to reclaim the amounts advanced and
orders were sought declaring the properties, that had been secured by
the mortgage bonds,
executable.
[16] In the various judgments to which
Chohan AJ refers there are different approaches that have been taken
in relation to the bank’s
rights. In some of the judgments,
the underlying loan agreements were held to be enforceable whilst in
others the mortgage bonds
were set aside. Chohan AJ found that the
loan agreement between the financial institution and the Brusson
investor was the “pivotal
element of the scheme”.
Accordingly there was a direct link between the loan agreement and
the registration of the mortgage
bond. This is, in my view, correct.
[17] In the majority of the matters
relating to the Brusson scheme, the applicants claimed that they did
not intend to transfer
ownership of the immovable property to the
investor or anyone else. In the absence of such intent, the property
would, in the normal
course of events, be restored into the name of
the applicant. See Legotor McKenna Inc v Lea
2010 (1) SA 35
(SCA) at
para [22] where it was held that “in the absence of any
intention to transfer ownership, a material requirement
of the now
established and well-recognised abstract theory of transfer of
immovable property, would be lacking”.
[18] It is common cause that the
Brusson scheme and the agreements concluded in terms thereof
contained peculiar features which
suggested that the agreements
comprised a loan against the immovable property being tendered as
security. See Ditshego supra at
paras [9] to [14]. Jordaan J in
Ditshego found that the only reasonable conclusion to be drawn
therefrom was that the real intention
was that the applicants
obtained a loan from Brusson against the security of their property.
He found further that the agreements
were simulated transactions
(para [28]). Both Jordaan J in Ditshego and Chohan AJ in Moore found
that the loan agreement and the
mortgage bond were inextricably
linked and comprised a single interrelated scheme even though the
bank was unaware of the Brusson
scheme.
[19] The investors who were an integral
part of the Brusson scheme would similarly not have had any intention
to acquire ownership
of the immovable property from the applicants
and accordingly, in both cases (and others,) it was held that there
was no consensus
in relation to the transfer of ownership in respect
of the immovable property.
[20] Chohan JA went on to find that the
applicants would be entitled to a declaration that the memorandum of
agreement signed between
them and Brusson and the offer to purchase
and sale agreement signed between the investors and the owner were
invalid, unlawful
and of no force and effect and thus liable to be
set aside.
[21] In relation to the validity of the
mortgage bond, reference was made to Nedbank v Mendelow
2013 (6) SA
130
(SCA) where Lewis JA held:
“Where there is no real intention
to transfer ownership on the part of the owner or one of the owners,
then a purported registration
of transfer (and likewise the
registration of any other real right such as a mortgage bond) has no
effect.” (at 135 para
[13])
Lewis JA further held that, if the
underlying agreement was tainted by fraud or had been obtained by
some other means that vitiates
consent such as duress or undue
influence, ownership does not pass (para [14]). Accordingly it was
held that the bond registered
over the property was not valid.
[22] The applicant relies upon the fact
that all of the authorities above only dealt with the investors and
the previous owner under
the Brusson scheme. In the present case,
there is a bona fide third party and according to the applicant’s
argument, this
must affect the position insofar as the validity of
the sale to the applicant is concerned.
[23]However, this ignores the fact that
as appears from all of the authorities stated above, if there was no
intention on behalf
of the Dubes to transfer the property to the
investors, then that transfer and sale are invalid and the investors
had no rights
to transfer to the applicant herein.
[24] Several cases have also been
decided in relation to QuarterMark Investments (Pty) Ltd
(QuarterMark) which was a scheme similar
to the Brusson scheme. In
QuarterMark Investments v Mkwanasi and Another
2014 (3) SA 96
(SCA)
Theron AJ found that as Mrs Mkwanasi has been fraudulently induced to
sign a sale agreement although she had no intention
to transfer
ownership of her property to QuarterMark, she was entitled to rescind
that agreement. Accordingly the SCA confirmed
that where the
underlying transaction was tainted by fraud, ownership would not pass
despite the registration of transfer and in
those circumstances a
party may proceed by way of a rei vindicatio for the return of the
immovable property.
[25] The applicant states that it is
not alleged that he at any time was party to or had knowledge of the
alleged Brusson scheme
or the fraud. Accordingly the applicant
contends that where ownership has passed to a bona fide third party
the victim of fraud
cannot vindicate the property from such instant
third party. See Dalrymple, Frank and Feinstein v Friedman and
Another (2)
1954 (2) SA 649
(W) at 664 and Basil Read Sun Homes (Pty)
Ltd v Nedperm Bank Ltd
[1998] ZASCA 97
;
1999 (1) SA 831
(SCA). In Dalrymple, Frank
and Feinstein v Friedman supra it was held:
“Where as in that case there was
no consent on the part of the owner to the passing of the property to
the person who obtained
it by fraud. The transaction is void ab
initio and the ownership of the property remains in the person
defrauded. But if the owner
consents to the passing of the property
although his consent was obtained by means of fraudulent
misrepresentation the transaction
is voidable only. In such case
ownership passes to the fraudulent party. In this regard …
where the fraud is such that
the transaction is void ab initio
ownership of the property fraudulently taken or obtained remains in
the owner who had had been
vindicated in the hands of an innocent
third party. Where the transaction is voidable only an innocent third
party can acquire
good title.”
[26] It is common cause that Nedbank
had knowledge of the Brusson scheme from at least the 25th of
November 2010 when a letter was
written to their erstwhile attorneys
Lowndes explaining the Dubes’ situation and requesting a stay
of the summary judgment
action against the investors. Despite this
and letters sent again to Lowndes and directly to Nedbank informing
them of the Dubes
position vis a vis the Brusson scheme, Nedbank
proceeded to obtain default judgment against the investors on the
25th January 2011(
when the caveats were still in place) and
proceeded thereafter to issue the writ of execution and proceed with
the sale in execution
after the caveats were lifted in February 2013.
[27] In this regard the judgment of
Knox NO v Mofokeng and Others
2013 (4) SA 46
(GSJ) is pertinent. It
held as follows:
“Where there was no judgment, or
where the judgment was void ab initio, or where the essential
statutory formalities pertaining
to the sale of an immovable property
had not been complied with, the immovable property in question can in
principle be vindicated
even from a bona fide purchaser who had taken
transfer of the property. The reason for [this] second rule is that
where the sale
in execution was invalid, the sheriff had no authority
to conduct the sale and to transfer the property to the purchaser.
The result
is not only that the underlying sale agreement concluded
at the sale in execution is invalid, but also that the real agreement
is defective, since the sheriff does not have authority to transfer
the property to the purchaser. The sheriff only has such authority
where a valid sale in execution had taken place.” (at para
[18])
[28] It is clear that at the time the
sale in execution took place both the creditor and the Sheriff were
aware that the sale of
the property to the investors was an invalid
sale and that no rights could arise therefrom. The Sheriff therefore
had no authority
to conduct the sale or to transfer the property to
the applicant. Despite this, they continued with the sale in
execution and any
damages which may be suffered by the present
applicant herein lie, in my view, at the foot of Nedbank and the
Sheriff.
[29] The sale in execution was a
nullity because the investors were not the owners of the property and
the judgment declaring the
property specially executable was void ab
initio because it depended on the sale and mortgage bond being valid.
It is not alleged that the Dubes at any
time consented to the transfer of their property. Accordingly, in the
present case, the
sale and subsequent transfer to the applicant are
void ab initio.
ESTOPPEL
[30] Whilst the applicants accept in
principle that the Brusson scheme was unlawful and that therefore all
transactions following
therefrom are void ab initio and of no force
and effect for the reasons set out above, the applicant argues that
the Dubes have,
in effect, waived their rights and are estopped from
claiming re-transfer of the property. They rely on Oriental Products
(Pty)
Ltd v Pegma 178 Investments Trading CC and Others
2011 (2) SA
508
(SCA) at [23]:
“In the context of this case, the
appellant is entitled to retransfer of the property but for the fact
that it cannot assert
its right of ownership because of estoppel.
Hence the applicant loses its ownership of the property.”
[31] The applicant relies on this
dictum and points to the fact that the Dubes must have known from
June 2010 that the property
had been transferred to the investors but
failed to take any steps in relation thereto. It is common cause that
the Dubes have
been represented by the LRC since approximately
November 2010. The applicant contends that the Dubes did not take any
steps to
set aside the registration of transfer of the property nor
to rescind the judgment until the application for eviction was
served.
CHRONOLOGY OF EVENTS
[32] In order to assess whether or not
the Dubes are estopped from asserting their rights of ownership, an
analysis of the chronology
events is required.
1. In 2005 the Dubes took transfer of
the property.
2. At the end of 2006, the Dubes
approached Brusson for the loan.
3. In September 2007, the Dubes
attended Brusson’s offices to sign documents.
4. In October 2007, the Dubes received
a loan pursuant to the agreement with Brusson.
5. On 19 June 2008 the investors took
transfer of the property unbeknown to the Dubes and pursuant to an
illicit transaction.
6. In May 2010, Mr Dube received a call
from Brusson telling him to keep his payments to Brusson on hold
until further notice.
7. In June 2010, Mr Dube received a
call from one of the investors advising Dube that he was the owner of
the property.
8. In August 2010, the Dubes were
referred to the LRC.
9. On the 30th August 2010, caveats
were imposed on all of the properties affected by the Brusson scheme.
Thus, no proceedings could
be launched in relation to any of these
properties, including the property in question.
10. Despite this, on 13 October 2010
the Dubes received a summons addressed to the investors seeking an
order for payment plus an
order seeking execution of the property.
11. In November 2010, the Dubes
attended at the office of the LRC who confirmed that they were
victims of the Brusson scheme.
12. On 25 November 2010, the LRC wrote
a letter to Nedbank’s erstwhile attorneys (Lowndes) explaining
the Dubes’ situation.
The LRC requested a stay of the summary
judgment application against the investors and asked for an urgent
response by the 3rd
of December 2010.
13. No response was received. On 6
December 2010, the LRC wrote another letter as Lowndes had failed to
respond to remind the latter
of the urgency.
14. On 13 December 2010, the LRC sent a
letter to Nedbank warning it that as a result of the unlawfulness of
the Brusson scheme
and the liquidation proceedings against Brusson,
legal action against the property could not proceed.
15. Again, despite this, Nedbank
proceeded to obtain judgment and on the 25th of January 2011, default
judgment was granted against
the investors. The LRC and the Dubes
were not informed of this.
16. On 9 March 2011, the Dubes received
a writ of attachment against the property.
17. On the 4th April 2011 the LRC sent
a letter to Nedbank’s attorney asking that they do not proceed
with the sale in execution.
18. Nothing further occurred until the
25th of February 2013 when the caveats that were registered over the
property on the 30th
August 2010 were lifted. Again the Dubes and LRC
were not aware o fnor informed of this fact.
19. On 19 March 2013, the Dubes
received the notice of sale in execution and immediately contacted
the LRC.
20. The LRC wrote a letter to Nedbank’s
attorneys in April 2013 advising that Nedbank should not proceed with
the sale in
execution as the court had declared the agreements in
relation to the Brusson scheme to be invalid. No response was
received to
this from Nedbank’s attorneys.
21. Despite knowing that the relevant
agreements had been declared invalid, Nedbank instructed the Sheriff
to proceed with the sale
in execution.
22. The LRC wrote a letter to the
Sheriff’s office on the 29th April 2013 requesting that the
sale in execution of the property
be stayed pending the outcome of
imminent litigation against Absa, Standard Bank and First National
Bank in various cases in relation
to the Brusson scheme..
23. No response was received from the
Sheriff’s office either.
24. Despite all of the aforesaid
warnings, the sale in execution proceeded and the applicant
purportedly purchased the property
at the sale.
25. He arrived at the property on the
5th May 2013 and introduced himself to Mr Dube. He informed Dube that
he had purchased the
property at an auction.
26. On 10 July 2013, the property was
registered into the name of applicant and the Dubes were informed of
this in terms of a letter
forwarded to them by the investors.
27. On 1 August 2013, the LRC sent a
letter to Nedbank’s attorneys, Lowndes Dlamini advising it of
the Dube’s’
entitlement to the property.
28. On 31 October 2013, Mr Dube
received a demand calling upon those who occupy the property to
vacate it.
29. On 21 November 2013, a further
letter of demand that the Dubes vacate the property was served at the
property.
30. On 9 December 2013, the LRC
responded to the demand to vacate setting out the history of the
matter.
31. On 12 December 2013, the eviction
application was served on the Dubes.
32. On 21 January 2014, the Dubes
delivered a notice of intention to oppose the eviction application.
33. On 11 February 2014, the Dubes
answering affidavit was delivered as well as a counter-application
incorporating a joinder-application.
34. On 17 February 2014, Nedbank
delivered a notice of intention to oppose certain aspects of the
counter-application.
35. Thereafter, several notices and
affidavits were served resulting in this matter coming before this
Court.
[33] Accordingly, the applicant
contends that having knowledge of the judgment and not taking any
steps to rescind same precludes
the Dubes from obtaining rescission
(the Applicant also contends later that as the judgment was not
granted against the Dubes,
they cannot apply for rescission. This
aspect is dealt with later). The applicant submits that, by their
conduct, the Dubes have,
in essence, acquiesced to the judgment
granted by default and the transfer pursuant thereto. In this regard
they rely on Gentiruco
AG v Firestone SA (Pty) Ltd
1972 (1) SA 589
(A) and Nkata v Firstrand Bank and Others
2014 (2) SA 412
(WCC). In
the latter case, the court held that the applicant for rescission had
failed to explain the lengthy delay in launching
the rescission
application. By the time she did so, the property had been sold, in
execution, to a purchaser who had then on sold
the property to a
third party. The court held that clearly there would be prejudice to
third parties (the bona fide purchaser)
if the default judgment were
to be rescinded. Although the judgment was reversed on appeal
([2015] ZASCA 44 (26 March 2015), this
point was not the subject of
the appeal. However, this case did not involve the original sale
transaction being fraudulent and
void ab initio and is therefore
distinguishable from the facts in the present case.
[34] It is clear that from the
chronology set out above that Nedbank’s erstwhile attorneys
(Lowndes) and Nedbank were well
aware of the fact that the Brusson
scheme was unlawful and that several judgments had already been
handed down in relation to the
scheme. They were also aware of the
Dubes’ claim to the property and their allegations that the
transfer and ownership of
same had been obtained through fraud and
was void.
[35] The applicant contends that
Nedbank was entitled to pursue the sale in execution and ignore the
correspondence which they had
received because the Dubes had failed
to oppose the proceedings or take any legal steps to set aside the
sale to the applicant
[36] It is pertinent to state that
Nedbank, the Sheriff and the LRC were all aware of the fact that a
caveat had been placed on
all sales involved in the Brusson scheme.
It is also common cause that the caveats were only lifted on the 25th
February 2013.
The LRC and the Dubes were not aware of this fact. It
was at this time that Dube received the notice of the sale in
execution
and the LRC wrote a letter to both Nedbank and the Sheriff
requesting that the sale in execution be stayed pending the
determination
of the matter of Tsotetsi v Standard Bank in relation
to the validity of the Brusson scheme.
[37] Throughout the proceedings,
although the Dubes did not institute legal proceedings the LRC, on
several occasions, put forward
the rights of the Dubes both to
Nedbank and to the Sheriff.
[38] In my view, the Dubes, through the
LRC, did not show display an unequivocal intention to waive their
rights. See RAF v Mothupi
2000(4)SA38 SCA@[19], where Nienabber JA
stated:
“Because no one is presumed to
waive his rights….one, the onus is one the party alleging it
and two, clear proof is
required of an intention to do so….The
conduct from which waiver is inferred, so it has been frequently
stated, must be
unequivocal, that is to say, consistent with no other
hypothesis”.
.
[39] There was nothing the Dubes could
do up until February 2013 as there were interdicts over all of the
properties and there was
no legal action that was necessary for them
to take at that stage. Very soon after the interdicts were lifted,
Nedbank, despite
receiving notice and despite knowing that the
Brusson scheme was invalid and that a sale transfer could not take
place to another
party, served the notice of sale in execution and
allowed same to take place on the 3rd May 2013 some two months after
the caveats
were lifted. Accordingly, in my view, to allow the
applicant’s application to succeed would be to ignore the
rights of the
Dubes and the effects of the invalidity of the Brusson
scheme on the sale and transfer of the property.
THE COUNTER APPLICATION
[40] The Dubes have applied, in a
counter-application for the following relief:-
40.1 That the Registrar of Deeds
Johannesburg, the three liquidators of Brusson’s estate, the
Sheriff for the district of
Roodepoort and Nedbank Limited, be
joined as parties to the proceedings as the fifth to tenth
respondents respectively ( the
counter respondents)
40.2 That the default judgment granted
against the investors under Case Number 39356/2010 on 3 March 2013,
be rescinded;
40.3 That the Dubes are entitled to
restitution of ownership of the property;
40.4 That the mortgage bond granted by
Nedbank to the investors be set aside;
40.5 That the sale at the auction of
the property be declared invalid, unlawful and of no force and
effect;
40.6 That the property be transferred
back to the Dubes;
40.7 That all Brusson documents be
declared invalid, unlawful and of no force and effect.
[41] Service of the counter application
took place in February 2014. Only Nedbank gave notice of intention to
oppose prayers 2 3,
4, 5 and 6 of the counter-application. They did
not oppose the joinder. It appears from correspondence delivered to
the court that
service of the counter application was effected on the
counter respondents, although formal proof of service on some of
them is
not evident. However, there is correspondence between the
LRC and the Registrar of Deeds in which the LRC has provided the
Registrar
of Deeds with copies of the counter application, which is
sufficient proof that the Registrar has had notice of this
application.
Although called upon by the LRC to file affidavits if
they wished to oppose, they did not do so
[42] The applicants contend that the
joinder application should have been brought separately and distinct
from the current application
and should have been heard beforehand.
The Dubes did, in fact, provide an earlier date for the joinder
application to be heard,
but as same was not opposed, there appears
to be no prejudice in allowing such application to be moved at this
stage. Nedbank did
not file any further affidavits in opposition to
this matter and accordingly this Court is entitled to grant an order
that they
are joined to these proceedings and have had notice of the
relief sought against them. Counsel did represent them at the time
of the hearing.
RESCISSION
[43] The applicants contend that the
rescission application is ill-conceived for the reason that such
judgment was not granted against
the Dubes but against the investors
and therefore the Dubes cannot apply for rescission of the judgment.
(despite relying upon
their argument that the delay in bringing the
rescission is fatal). The applicant and Nedbank argue that the Dubes
do not have
locus standi to set aside that portion of the judgment
that was obtained by the bank in which the immovable property was
declared
executable. The Dubes were not party to the action
instituted by the bank against the two investors..
[44] A rescission of a judgment may be
brought in terms of various rules or the common law. Rule 42(1)(a)
applies if a judgment
was sought or granted erroneously in the
absence of any party affected thereby (emphasis added). The rule is
intended to allow
a party who was not present when the judgment was
granted to be given an opportunity to place before a court facts
which, had the
court been aware of the same, would have affected the
granting of the judgment. Under the common law, a court may also, on
sufficient
or good cause shown, rescind a judgment obtained in
default of an appearance by a party. The Dubes have a substantial
interest
in the subject matter of the judgment that was granted and
this would entitle them to intervene in the action that gave rise to
the order which is now sought to be rescinded. See United Watch and
Diamond Company v Disa Hotels
1972 (4) SA 409
(C) @ 415. The Dubes
are already parties to these proceedings and have sought to join all
the relevant parties concerned with the
default judgment proceedings
under Case No 39356/2010. Although they have not specifically asked
to intervene in those proceedings,
this Court has the power to grant
such order. The Dubes are required to show a “legal interest in
the subject matter of the
action, which could be prejudicially
affected by the judgment of the Court” see United Watch supra @
415. They have a direct
and substantial legal interest in the
property, being the subject matter of the action and have the right
to intervene therein
and seek rescission of such judgment..
[45] One must assume that, had the
judge hearing the default judgment been told of the Brusson scheme
and a lack of any intent on
behalf of the Dubes to transfer ownership
of the property to the investors, the judge would not have granted
the order declaring
the immovable property executable. The order
thus obtained was, in my view, granted erroneously as contemplated by
Rule 42(1)(a).
[46] In addition, the court in terms of
the common law can set aside a judgment on the grounds of fraud. In
the matter of Gollach
& Gomperts v Universal Mills and Produce
Company
1978 (1) SA 914
(A) at 922C-D it was held that, like any
contract (and like any order of court), a transaction may be set
aside on the ground that
it was fraudulently obtained.
[47] The Dubes, in seeking rescission,
contend further that Nedbank was reckless in granting credit in terms
of section 80 of the
National Credit Act (NCA). It appears from the
affidavit that the investors, at that stage, had approximately eleven
properties
registered in their name and that there were outstanding
bond amounts ranging between R195 000,00 and R305 000,00. In
addition,
the investors had an excessive amount of debt under their
names and had purchased five properties in 2008. Nedbank did not
appear
to conduct the required assessments in terms of the NCA in
granting the bond. It is not clear whether Nedbank made any
investigations
in compliance with section 81(2) of the NCA. Had they
done so, they would, at the very least, have suspected that the deed
of
sale documents facilitated by Brusson were suspicious, to say the
least.
[48] As stated above, the application
to join Nedbank and the Dubes’ affidavit supporting such
counter-application was served
on Nedbank. Nedbank chose to file a
notice of intention to oppose certain of the relief however it chose
not to file any affidavits
explaining their conduct in this matter.
[49] In my view the Dubes are entitled
to an order rescinding the portion of the judgment relating to the
execution of the immovable
property and to relief which flows
therefrom.
COSTS
[50] The other parties that the Dubes
sought to join in the proceedings and in respect of whom proof of
service is lacking are not
directly affected by the outcome of this
matter, other than in relation to costs. It appears that the two main
parties in this
matter, being the applicant and the Dubes are
innocent parties affected by the Brusson scheme. In my view,
Nedbank, the Sheriff,
Brusson and the investors were all involved in
the consequences of the property being transferred to the applicant
in circumstances
in which it should not have been done.
This issue was not raised with the
parties during argument and accordingly I intend to make a
substantial order relating to the
issue of costs. Such order will
also allow the counter respondents to deal with any other relief they
may seek to obtain or oppose.
A IN REGARD TO THE MERITS OF THE
APPLICATION, THE FOLLOWING ORDER IS GRANTED
1. The Applicants’ application to
evict the respondents from the property Erf 8…….. D…….
Extension
2 Johannesburg 8……. M….. Street,
D…….., Extension 2 (the property) is dismissed.
2. The Registrar of Deeds is joined in
the proceedings as the Fifth respondent and Nedbank Ltd is joined in
the proceedings as the
10th respondent in the counter application.
3. The Dubes are granted leave to
intervene in the proceedings under Case No 39356/2010 and the
default judgment and order granted
under such case number in favour
Nedbank, insofar as it relates to the declaration that the property
be specially executable, is
set aside.
4. The Dubes are entitled to
restitution of the property.
5. The mortgage bond granted by Nedbank
to the investors in respect of the acquisition of the property is set
aside.
6. The memorandum of agreement
concluded between the Dubes and Brusson Finance (Pty) Limited
(Brusson) as well as the offer to purchase
concluded between the
Dubes and the investors together with the sale agreement (Annexures
TAD 2, TAD 3 and TAD 4 to the Dubes’
answering affidavit) are
declared invalid, unlawful and of no force and effect.
7. The above agreements are set aside.
B IN RELATION TO COSTS AND/OR ANY OTHER
RELIEF WHICH ANY OF THE COUNTER RESPONDENTS MAY SEEK
1. The applicant, the respondents, the
counter applicant and the counter respondents are granted leave to
file an affidavit by the
15th September 2015 showing cause why the
following order should not be made:-
1.1 The sixth to ninth counter
respondents are joined in these proceedings;
1.2 The first and second respondents
together with Nedbank, the Sheriff for the district of Roodepoort and
the liquidators of Brusson
Finance are ordered to pay the costs of
this application, jointly and severally, the one paying the others to
be absolved.
1.3 This order is to be served by the
Sheriff on all of the counter respondents.
2. The matter is postponed sine die to
a date to be arranged with the registrar of Weiner J for argument in
relation to the costs
of this application.
3. The further proceedings and filing
of any other affidavits, other than those referred to in B 1, shall
be dealt with, in Case
Management by Weiner J. Any party may approach
the registrar of Weiner J to provide a date for such case management
to take place.
WEINER J
HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
APPEARANCES
For the Applicant: C Van Der Merwe
Instructed by: Biccari Bollo Mariano
Inc
For the Intervening Creditor:HP Van
Nieuwenhuizen
Instructed by: Cliffe Dekker Hofmeyr
Inc
For the Respondent:O Ben-Zeev
Instructed by: Legal Resources
centre
Date of Hearing:15 June 2015
Date of Judgment:13 August 2015