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[2015] ZAGPJHC 347
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M and Another v Golden Trust Services (Pty) Ltd and Others (2013/08853) [2015] ZAGPJHC 347 (9 October 2015)
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REPUBLIC OF SOUTH
AFRICA
IN THE GAUTENG LOCAL
DIVISION, JOHANNESBURG
JOHANNESBURG
CASE NO: 2013/08853
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
9/10/2015
In the matter between:
QMM
First Applicant
IMM
Second Applicant
and
GOLDEN
TRUST SERVICES (PTY) LTD
First Respondent
ASSET
AUCTION (PTY)
LTD
Second
Respondent
JOHANN
BLIGNAUT
Third Respondent
DAMIEN
OLSEN
Fourth Respondent
JUDGMENT
WINDELL,
J
:
Introduction
[1]
This is an application in terms
of which both applicants seek an order granting them various
types of
relief including, but not limited to, a review and the setting aside
and cancellation of a sale of immovable property
by the receiver and
liquidator of the assets of a joint estate in circumstances where the
property has been transferred to a
bona fide
purchaser.
The
parties
[2]
The first and second applicants
(Ms M[....] and Dr M[....]) were formerly married to one
another in
community of property. They were divorced on 17 May 2002. A decree of
divorce issued by the Central Divorce Court incorporated
a deed of
settlement which was made an order of court. The second paragraph of
the deed of settlement made provision for proprietary
claims between
the parties which unequivocally provided that there would be a
division of the joint estate.
[3]
The applicants were unable to
reach an agreement after the divorce as to how the joint
estate
should be divided. Dr M[....] approached the Central Divorce Court in
2008, six years after the divorce,
seeking
the intervention of the court to procure the appointment of
a liquidator.
The application
was served personally on Ms M[....]. On 3 October 2008, Johann
Blignaut (the third respondent) was appointed as
receiver and
liquidator of the assets in the joint estate of the erstwhile married
couple.
[4]
The immovable property of the
applicants was sold on instruction of Mr Blignaut on 18 September
2012, four years after he was appointed. At the time of the sale of
the property, Mr Blignaut was an employee of the first respondent,
Golden Trust Services (Pty) Ltd. The second respondent, Asset Auction
(Pty) Ltd, was appointed by Mr Blignaut to facilitate the
auction of
the applicants’ immovable property. Finally, the fourth
respondent, Mr Damien Olsen, was the
bona fide
purchaser of
the immovable property.
The
joint estate
[5]
The joint estate consisted inter
alia of an immovable property described as Erf [....],
S[....] Park
situated at [....] A[....] Road, East Village, Boksburg (the
property). The property consisted of a house measuring
in extent 1222
square metres.
[6]
Acting upon instructions of Mr
Blignaut, Asset Auction (Pty) Ltd offered the property for
sale by
way of public auction. Mr Olsen made the highest bid in the amount of
R810 000, 00. In terms of the conditions of
sale, Mr Olsen’s
offer was subject to confirmation by the seller within fourteen
calendar days from the date of the offer
to purchase. Mr Blignaut
subsequently confirmed the sale on 2 October 2012 in the absence of
receiving any indication to the contrary
from the applicants or their
legal representatives to whom the conditions of sale were
communicated.
[7]
On 25 February 2013, the
property was transferred to Mr Olsen and his spouse, Mrs Caslynn
Olsen.
[8]
The applicants launched the
current application, which is opposed by all the respondents.
First
and second applicants
[9]
Ms M[....] confirmed in her
founding affidavit that she and Dr M[....] could not reach
an
agreement after the divorce as to how the joint estate should be
divided and that they were engaged in on-going negotiations
to that
end.
[10]
Ms M[....] stated that when a notice board of sale
by public auction was erected outside the property, she
contacted her
ex-husband regarding the sale of the property who confirmed that he
was unaware of the fact that the property was
for sale.
[11]
Ms M[....] instructed her attorney, Mr Jake Maseka
(Mr Maseka) to address a letter on 14 September 2012
to Golden Trust
Services (Pty) Ltd requesting that the public auction of the property
be cancelled, failing which, an urgent court
application would be
brought to stop the said sale. Mr Maseka acted as Ms M[....]’s
attorney-of-record in the divorce proceedings
in 2002 and in
subsequent negotiations.
[12]
Mr Blignaut replied in writing on 17 September
2012 in response to Mr Maseka’s letter of 14 September
2012 as
follows:
“
Similarly
from the correspondence between the writer and yourself it appears
that all the reasonable steps were taken to accommodate
Mrs M[....]
to make appropriate arrangements to acquire such assets from the
settlement as she desired
.
It is accordingly
recorded that the decision to sell the property by public auction was
reasonable and fair particularly considering
the following:
Mrs M[....] was
appraised of the decision prior to any adverts being placed to advise
her of the property being sold. As such, she
attended our offices
during early July 2012 and gave notice by furnishing her Attorney’s
name and contact particulars, being
a Mr Raymond Mashazi;
In the sequence of
events Mr Raymond Mashazi was notified of the property being
auctioned who accepted the arrangement and confirmed
in writing that
“they” will attend the auction;
Clearly as
correspondence was conducted with Mr Mashazi, acting on behalf of Mrs
M[....], the confirmation was that both he and
Mrs M[....] would be
in attendance;
For your knowledge and
records, I attach* a copy of the draft Conditions of Sale and is your
attention specifically drawn to Clause
20 thereof.”.
[13]
Ms M[....] contended that the threat of legal
action in the form of urgent court proceedings never materialised
as
she and her former husband were unable to place Mr Maseka in funds.
[14]
Instead, on the day of the auction, both
applicants each addressed a letter to Golden Trust Services (Pty)
Ltd
and Mr Blignaut wherein they stated the following:
“
An
alternative arrangement to dispose of the property has been agreed
upon and finalized between me and my ex-spouse, resulting
in a
decision to cause cancellation of the auction sale…the
property will thus be sold as per arrangement,…and the
arrangement does not involve a sale by auction.”.
[15]
Ms M[....] delivered both letters to the office of
Mr Blignaut together with a request made to Mr Blignaut
not to
proceed with the auction of the property.
[16]
A short while later, both applicants discovered
that the property had been sold to Mr Olsen for the amount
of R810
000.00. The applicants contend that the property was valued in the
amount of R2 000 000.00.
[17]
Both applicants confirmed that they were aggrieved by the conduct of
the first, second and third respondents
as they had not acted in the
applicants’ interest by proceeding to sell the property by way
of public auction. On 10 January
2013, both applicants addressed
correspondence to Standard Bank informing the latter that they wish
to withdraw the bond from cancellation
as they did provide any
instruction for it to be cancelled. The applicants continued to make
payment of the mortgage bond instalments
in the amount of R5219,78
during October 2013, November 2013 and December 2013.
Attempts
to divide joint estate
[18]
In the answering affidavit, Mr Blignaut stated
that after his appointment in 2008, he had attempted to fulfil
his
mandate and exercise his duties and powers as set out in a court
order in a satisfactory manner to accommodate both the applicants.
[19]
These attempts included convening several meetings
with the parties as well as discussions and the exchange
of
correspondence between himself and Ms M[....]’s respective
legal representatives.
[20]
Mr Blignaut brought the attention of the court to
the following examples of how he attempted to fulfil his
mandate and
perform his duties and powers:
20.1 On 5 November
2008, Mr Maseka wrote a letter to Mr Blignaut wherein it was recorded
what Ms M[....] contended the joint
estate to consist of;
20.2 Mr Blignaut
replied in writing on 10 November 2008 requesting further details of
the alleged assets to which the he received
no reply;
20.3 Mr Blignaut
obtained a valuation of the property together with valuations for two
motor vehicles, namely, a Mercedes
Benz C200 and an Opel Astra. On 10
February 2009, the property was valued at R780 000.00.
20.4 Furthermore,
Mr Blignaut addressed correspondence to the Ms M[....] on 20 March
2009 setting out Dr M[....]’ s
version as to what assets the
joint estate consisted of requesting further details or proof of any
contradictory assertions made
by her;
20.5 Mr Blignaut
met with Ms M[....] on 29 May 2009 and held a telephonic discussion
with Dr M[....] on the same occasion.
At that stage, it was apparent
that Ms M[....] wished to retain the property whereas Dr M[....]
would have preferred it if all
the assets in the joint estate could
be sold and proceeds distributed equally;
20.6 Mr Blignaut
continued to engage with both the applicants during 2010 and 2011. Dr
M[....]’s attitude remained unchanged
in that the property must
be sold. At the time, Dr M[....] complained about the fact that Ms
M[....] continued to reside in the
property without making any
financial contribution to the payment of the mortgage bond. It also
became apparent that both applicants
failed to make payment of
municipal charges. Ultimately, the protracted delay in the division
of the joint estate coupled together
with the continued non-payment
of municipal charges would reduce the amount of equity in the
property available for distribution.
[21]
Mr Blignaut stated that Ms M[....] attended his
office in July 2012 and confirmed that she would be represented
by Mr
Raymond Mashazi (Mashazi). Ms M[....] provided Mr Blignaut with Mr
Mashazi’s contact details.
[22]
After a telephone conversation between Mr Blignaut
and Mr Mashazi on 20 July 2012, a letter was addressed
to Mr Mashazi
wherein the following was confirmed:
“
Mrs
M[....] has, on numerous occasions advised that she will be making
arrangements to acquire her former husband’s share
but has, to
date, not submitted any offer documentation. In the circumstances,
the liquidator has no alternative but to dispose
of the property
forthwith by public auction.”.
[23]
Mr Mashazi responded by means of an e-mail on 20
July 2012 stating:
“
Thanks,
we will attend.”
[24]
Mr Blignaut understood Mr Mashazi’s e-mail
to mean that Ms M[....] and Mr Mashazi would attend the
auction and
that Ms M[....] would seek to purchase the property at the auction.
[25]
Thereafter, Mr Blignaut proceeded to arrange the auction. Mr Mashazi
was informed in writing
on 4 September 2012 of when the auction would
take place.
[26]
During the week of 10 September 2012, Mr Blignaut held a telephonic
discussion with Dr M[....]
during in which Dr M[....] was reminded
that he and Ms M[....] had not yet concluded any settlement agreement
and accordingly advised
Dr M[....] that the property would go on
auction on 18 September 2012.
[27]
On 14 September Mr Blignaut received a letter from
Mr Maseka wherein it was stated that Mr Maseka has received
instruction from Ms M[....] to cancel the auction, failing which an
urgent application will be brought to stop the sale. Mr Blignaut
responded with a letter dated 17 September 2012 wherein he drew Mr
Maseka’s attention to the fact that all reasonable steps
were
taken to accommodate Ms M[....] to make appropriate arrangements to
acquire such assets from the settlement as she desired.
Mr Blignaut
further stated in this letter that Ms M[....] was apprised of the
decision to sell the property prior to any adverts
being placed to
advise her of the property being sold and that she attended his
office in July 2012 and indicated that Mr Mashazi
was her attorney.
Mr Blignaut informed Mr Maseka that Mashazi was therefore notified of
the auction in writing and that Mashazi
indicated that he and Ms
M[....] would be in attendance. Mr Maseka’s attention was
further drawn to clause 20 of the Conditions
of Sale which provided
that any offer would be subject to written acceptance by the seller
within a period of 14 days from date
thereof.
[28]
On the day of the auction, Mr Blignaut received letters from both
applicants requesting the cancellation of the auction. In
the absence
of a court order prohibiting the public auction of the property, Mr
Blignaut decided that it would be in the interests
of both applicants
to proceed with the public auction. He proceeded to give effect to
his mandate in terms of the court order which
empowered his
appointment. The auction was imminent and substantial wasted costs
would be incurred by a cancellation of the auction
at such a late
stage.
[29]
The public auction commenced as scheduled on 18 September 2012 at
11h00 at the property. In argument
before court, it was stated that
Ms M[....] was present at the time inside the residence and passively
observed proceedings taking
place outside at the auction through a
window.
[30]
On 20 September 2012, in correspondence addressed
to Mr Maseka and Mr Mashazi as well Dr M[....], Mr Blignaut
again
drew their attention to clause 20 of the conditions of sale. They
were also informed that Ms M[....] was entitled to submit
either a
higher offer or conclude a settlement agreement with Dr M[....]
before the expiry date of the confirmation period on 2
October 2012.
[31]
Mr Blignaut received no response from Mr
Maseka or Mr Mashazi. On 1 October 2012, Mr Maseka and Mr
Mashazi
were informed of the confirmation of sale. This information too,
failed to draw any response from Mr Maseka and Mr Mashazi.
The offer
to purchase was accepted and Mr Maseka and Mr Mashazi were informed
thereof on 8 October 2012. In argument before court,
Mr Maseka freely
volunteered the fact that he was prevented from replying to any of
the correspondence addressed to him on behalf
of Ms M[....] as she
had not paid his fee to enable him to write a letter. Of noteworthy
importance is that Mr Maseka did not withdraw
as the Ms M[....]’’s
legal representative during this crucial exchange of correspondence.
He omitted to act in the
interest of Ms M[....]. The essential
difficulty with Mr Maseka’s conduct is that he may have
compromised his duty to Ms
M[....] as an attorney.
[32]
After 2 October 2012, having heard nothing from Mr
Maseka and Mr Mashazi, Mr Blignaut proceeded to make
arrangements to
implement the sale of the property.
The
fourth respondent
[33]
Mr Olsen states that he purchased the property by
public auction on 18 September 2012. The purchase price
was
R810 000.00. He subsequently paid a deposit of R81 000.00.
He paid a deposit in the amount of R81 000.00 and
complied with
the terms and conditions of the agreement. In total, an amount of
R831 102.40 (which included ancillary costs)
was paid by Mr
Olsen in respect of the purchase price. The property was registered
in the name of Mr Olsen on 25 February 2013
at the Deeds Registries
office, Johannesburg.
[35]
At no stage, before or during the public auction, did Mr Olsen have
any knowledge of the background
dispute or agreements related to the
authority of the first, second or third respondents to sell the
property. Moreover, Mr Olsen
was also unaware of any arrangements or
dispute between the applicants nor did he know of any arrangement or
dispute between the
applicants and the first second or third
respondents.
[36]
The position in which Mr Olsen finds himself in, namely, that of a
bona fide purchaser, is not
disputed by the applicants.
The
legal position
[37]
The applicants aver that the sale of the property must be set aside
as the property was sold
against the wishes of the applicants.
[38]
Although paragraph 1 of the notice of motion is reminiscent of a
review, the application was
not brought in terms of rule 53.
Section
1
of the
Promotion of Administrative Justice Act 3 of 2000
defines
administrative action as follows:
Any
decision taken, or any failure to take a decision, by -
(a)
an
organ of State, when -
(i) exercising a power
in terms of the Constitution or a provincial constitution; or
(ii) exercising a
public power or performing a public function in terms of any
legislation; or
(b)
a
natural or juristic person, other than an organ of state, when
exercising a public power or performing a public function in terms
of
an empowering provision, which adversely affects the rights of any
person and which has a direct, external legal effect.
[39]
Mr Blignaut’s action in selling the property does not
constitute the exercise of public
power or the performance of a
public function and it was not performed in terms of an empowering
provision.
The decision of the respondent to
sell the property impacts only on the applicant and has no direct
consequence for any other citizens.
Accordingly, the decision to sell
the property was not an administrative action.
Conclusion
[40]
Mr Blignaut was appointed as receiver and
liquidator of the assets in the joint estate of the applicants
after
the applicants failed
to reach an agreement.
In terms of
an order of the Central Divorce Court, Mr Blignaut was empowered and
required to “
receive, liquidate
and distribute the assets of the joint estate”
and to “
sell and dispose of any
assets of whatever nature, movable or immovable, corporeal or
incorporeal, of whatever nature that may comprise
the joint estate
either by private treaty, public auction, tender or in such other
manner as he may deem fit and under such conditions
as he may deem
fit”.
It follows that, in his
capacity of receiver and liquidator, Mr Blignaut did not act as an
agent for either Ms M[....] or Dr M[....]
and he was not required to
act in accordance with their instructions.
[42]
In
Gillingham
v Gillingham
1904 TS 609
Innes CJ said at 613:
'When
two persons are married in community of property a universal
partnership in all goods is established between them. When a
court of
competent jurisdiction grants a decree of divorce that partnership
ceases. The question then arises, who is to administer
what was
originally the joint property, in respect of which both spouses
continue to have rights? As a general rule there is no
practical
difficulty, because the parties agree upon a division of the estate,
and generally the husband remains in possession
pending such
division. But where they do not agree the duty devolves upon the
Court to divide the estate, and the Court has power
to appoint
some person to effect the division on its behalf. Under the general
powers which the Court has to appoint curators it
may nominate and
empower some one (whether he is called liquidator, receiver, or
curator - perhaps curator is the better word)
to collect, realise,
and divide the estate. And that that has been the practice in South
African courts is clear.”
[43]
Joubert (ed)
The Law of South Africa
vol 19 (
sv
`Partnership') at para 428 states the following:
'As
a general rule, and in the absence of any contrary agreement between
the partners or any other directions in this respect, the
liquidator
must convert all partnership property into money by means of a sale,
usually a public auction. This is not, however,
mandatory and a court
may be approached to give alternative directions regarding the mode
in which the assets are to be valued
and distributed. A liquidator
may not purchase partnership assets at a public auction himself
without the partners' consent. Without
prior agreement the liquidator
cannot sell the partnership assets to any individual partner.
[44]
The order appointing Mr Blignaut gave him detailed powers. His task
has been straightforward:
effect the division of the joint estate. Mr
Blignaut has endeavoured to carry out his task but has met with
little success. He
accordingly wrote numerous letters to the
applicants and their legal representatives in an attempt to settle
the dispute between
the applicants. Four years after he was appointed
he indicated to the parties that the only solution was to sell the
immovable
property.
[45]
Proper notice was given to both applicants and the auction was
advertised. Four days before the
auction Mr Maseka on behalf of Ms
M[....] objected to the sale of the property and stated that Mr
Maseka still holds instructions
from Ms M[....] to “have the
joint estate divided equally between the parties”. Mr Blignaut
indicated that the sale
will proceed but specifically drew attention
to clause 20
of the Conditions of
Sale which provided that any offer would be subject to written
acceptance by the seller within a period of
14 days from date
thereof. On the day of the auction the applicants wrote letters to Mr
Blignaut wherein they objected to the sale.
In the letters they
indicated that “
an alternative
arrangement to dispose of the property has been agreed upon”
,
but fail to indicate what the arrangement was. Astonishingly, both
applicants were now suddenly in agreement as to how to divide
the
joint estate despite being in disagreement thereto since, at least,
2003 when the second applicant himself applied to the Central
Divorce
Court for the appointment of a receiver and liquidator.
[46]
Although Mr Maseka threatened an urgent application, the application
was never brought. Mr Blignaut
further informed the applicants on at
least three separate dates after the property was sold, that the
offer was subject to his
written confirmation and that Ms M[....] was
entitled to submit either a higher offer or to conclude a settlement
agreement between
her and Dr M[....]. Notwithstanding the fact that
they were made aware that the property was sold on 18 September 2012,
they failed
to submit either a higher offer or to conclude a
settlement agreement before the expiry date of the confirmation
period. The applicants
ultimately did nothing at all for a period of
almost 6 months.
[45]
The applicants further showed an absolute lack of bona fides in the
bringing of this application.
The application was first launched on 6
March 2013.
The application was
postponed on three occasions and, in one particular instance, struck
from the roll due to non-appearance. Punitive
cost order were made
against the applicants on two occasions. After the matter was
postponed on the request of the applicants on
14 June 2013, the
applicants delivered an application termed “ Application for
Condonation” In the founding affidavit
they now alleged that Mr
Blignaut’s appointment was invalid because it was not served on
Ms M[....] and Dr M[....] “did
not know about “ Mr
Blignaut’s appointment. These allegations are false as Mr
Blignaut was appointed as receiver and
liquidator on the application
of Dr M[....] and the application was personally served on Ms
M[....].
[47]
In
Brighton
v Clift (2)
1971
(2) SA 191
(R), having decided that a liquidator should be appointed
Macauley J dealt with a liquidator’s powers in these terms:
'With
regard to the powers to be conferred on the liquidator, it seems to
me that it is not this Court's function to act as a liquidator
and to
anticipate problems which may present themselves to the liquidator at
a later stage. Doubtless, these will arise in any
liquidation, but
they are matters for the liquidator to decide and, in doing so, he
may seek the parties' concurrence in any course
he takes. Failing
their agreement, his decisions are open to objection by either party
with recourse to the Courts. “
[47]
The
abstract theory
of transfer applies to immovable property and in accordance with the
abstract theory the requirements for the passing
of ownership are
twofold, namely delivery, which in the case of immovable property, is
effected by registration of transfer in
the Deeds Office, coupled
with a so-called real agreement or 'saaklike ooreenkoms'. The
essential elements of the real agreement
are an intention on the part
of the transferor to transfer ownership and the intention of the
transferee to become the owner of
the property
.
See
Legator
Mc Kenna v Shea
2010 (1) SA 35
SCA at par [22]. I am satisfied that the sale of the
property fell within Mr Blignaut’s powers and that the property
was
validly transferred to Mr Olsen.
[48]
In the result the following order is made:
The
application is dismissed with costs.
L WINDELL
JUDGE OF THE HIGH
COURT
GAUTENG LOCAL
DIVISION, JOHANNESBURG
COUNSEL FOR 1
ST
& 2
ND
APPLICANTS :
Mr Jake Maseka
INSTRUCTED
BY:
Jake Maseka
Attorneys
COUNSEL FOR
1
ST
,
2
ND
& 3
RD
RESPONDENTS:
Advocate De Wet
INSTRUCTED
BY:
Fluxmans Attorneys
DATE OF
HEARING:
18 September 2015
DATE OF
JUDGMENT:
9 October 2015