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[2015] ZAGPJHC 256
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Mahori and Another v Sheriff of the High Court for the District of Tembisa and Others (19785/2011) [2015] ZAGPJHC 256 (18 November 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER: 19785/2011
DATE:
18 NOVEMBER 2015
In
the matter between:
MAHORI,
GLADWELL
TSAKANE
.............................................................................
First
Appellant
MULEA,
CONSTANCE
MASHUDU
........................................................................
Second
Appellant
Versus
THE
SHERIFF OF THE HIGH COURT FOR THE DISTRICT
OF
TEMBISA
...............................................................................................................
First
Respondent
FIRSTRAND
BANK
LIMITED
..............................................................................
Second
Respondent
MOKGOSINYANE,
ALFRED
..................................................................................
Third
Respondent
NEW
AFRICA GATEWAY
CHURCH
...................................................................
Fourth
Respondent
THE
REGISTRAR OF DEEDS,
PRETORIA
...........................................................
Fifth
Respondent
MOKGOSINYANE,
VIOLET
.....................................................................................
Sixth
Respondent
Coram:
SATCHWELL ET MAKUME ET WEPENER JJJ
Heard:
11 November 2015
Delivered:
18 November 2015
Summary:
Estoppel: the negligent conduct of an
owner of property may give rise to a plea of estoppel if, in the
event of the loss of such
property, the owner’s conduct was
culpable in creating the impression that the person dealing with the
property was authorised
to do so. The party relying on estoppel must
plead and prove its case to justify reliance on the plea. However,
that party’s
plea, in order to be successful, must be based on
his or her own reasonable conduct in forming the impression alleged
to be created
by the owner of the property.
JUDGMENT
WEPENER
J:
[1]
The appellants have been granted leave to appeal by the Supreme Court
of Appeal against the judgment delivered by Kganyago AJ,
which
judgment was delivered on 25 April 2013. The appellants were the
registered owners of immovable property who were aggrieved
that the
property was registered in the name of the fourth respondent. The
first respondent is the sheriff of the district of Tembisa.
The
second respondent is Firstrand Bank Limited (the bank), the party who
initially obtained a judgment against the appellants,
the third and
sixth respondents are the parties who sold the immovable property to
the fourth respondent and the fifth respondent
is the relevant
Registrar of Deeds.
[2]
Due to the timelines provided for in the Rules, the present appeal
had lapsed. The appellants’ attorney set out a number
of facts
that had led to the lapsing of the appeal including the fact that the
judgment of the court a quo was,
after a
search for it eventually found at the Palm Ridge Magistrates
Court, where it was apparently delivered. This is by
no means the
only reason for the delay; there are a number of administrative
mishaps which contributed to the delay of the prosecution
of the
appeal. There was nothing to gainsay the allegations of the
appellants’ attorney and counsel for the respondents,
at the
outset of the hearing, did not pursue this objection.
[3]
The fourth respondent spent approximately half of its written
argument complaining about the appeal record and related
technicalities.
Counsel for the respondent was, however, unable to
advance persuasive reasons why the fourth respondent was prejudiced
especially
since the missing pages and documents had been made
available to the fourth respondent prior to the hearing of the
appeal. That
being the case, there is no merit in the complaint and
it should not be allowed to derail the hearing of the appeal and
counsel
for the fourth respondent conceded that the argument on the
merits of the appeal should be heard. An order was consequently
issued
condoning the late prosecution of the appeal as well as the
late filing of documents, with no order as to costs in relation
thereto.
[4]
After obtaining default judgment against the appellants, together
with an order declaring the immovable property executable,
the bank
took no further part in the proceedings which I will refer to below
despite having been cited as a party thereto.
[5]
Subsequent to the judgment and order, the appellants averred that the
judgment was compromised by agreement between the appellants
and the
bank. The agreement entitled the appellants to pay an amount of
R150 000, which would have resulted in both the loan
agreement
and the mortgage bond agreements between the appellants and the bank
being ‘reinstated’. The payment was
duly made and,
despite this, a sale in execution by way of auction was held during
August 2010 whereafter immovable property registered
in the names of
the appellants, was sold.
[6]
The version of the appellants regarding the compromise was never
disputed by any party because there was no evidence by the
bank. The
only answering affidavit was filed on behalf of the fourth
respondent, a church, who later purchased the immovable property
from
the third respondent. The result is that the appellants’
version of events remained uncontested as the fourth respondent
had
no knowledge of the facts deposed to by the appellants and was in no
position to dispute the facts. In so far as the appellants’
version of the compromise is uncontested, I accept that the
agreement, as set out by them, was reached with the bank.
[7]
A compromise is an agreement in own right. It is an absolute defence
to any action that may be based on the original claim.
[1]
In
Gollach
it was said:
‘
It
is necessary to consider whether the agreement concluded at the end
of the meeting on 20 July 1972, when appellant agreed to
pay, and the
Group to accept, R10 000 "in full and final settlement..."
was a transactio in the sense of that word as
used in the Roman-Dutch
law and applied in South Africa. In
Cachalia
v Herberer & Co.,
1905 T.S. 457
at p. 462
,
SOLOMON, J., accepted the definition of transactio given by Grotius,
Introduction, 3.4.2., as
"an
agreement between litigants for the settlement of a matter in
dispute".
Voet,
2.15.1., gives a somewhat wider definition which includes settlement
of matters in dispute between parties who are not litigants
and
later, 2.15.10., he includes within the scope of transactio,
agreements on doubtful matters arising from the uncertainty of
pending conditions "even though no suit is then in being or
apprehended". (Gane's trans., vol. 1, p. 452.) The purpose
of a
transactio is not only to put an end to existing litigation but also
to prevent or avoid litigation. This is very clearly
stated by Domat,
Civil Law
, vol. 1, para. 1078, in a passage quoted in
Estate
Erasmus v Church
,
1927 T.P.D. 20
at p. 24, but which bears
repetition:
"A
transaction is an agreement between two or more persons, who, for
preventing or ending a law suit, adjust their differences
by mutual
consent, in the manner which they agree on; and which every one of
them prefers to the hopes of gaining, joined with
the danger of
losing."’
[8]
In
Georgias
and Another v Standard Chartered Finance Zimbabwe Ltd
[2]
,
Gubbay CJ said as follows
[3]
:
‘
Compromise,
or transactio, is the settlement by agreement of disputed
obligations, or of a lawsuit the issue of which is uncertain.
The
parties agree to regulate their intention in a particular way, each
receding from his previous position and conceding something
- either
diminishing his claim or increasing his liability. See
Cachalia
v Harberer & Co
1905 TS 457
at 462
in fine;
Tauber v Von Abo
1984 (4) SA 482
(E) at 485G - I;
Karson
v Minister of Public Works
1996 (1) SA
887
(E) at 893F - G. The purpose of compromise is to end doubt and to
avoid the inconvenience and risk inherent in resorting to the
methods
of resolving disputes. Its effect is the same as res judicata on a
judgment given by consent. It extinguishes ipso jure
any cause of
action that previously may have existed between the parties, unless
the right to rely thereon was reserved. See
Nagar
v Nagar
1982 (2) SA 263
(ZH) at 268E -
H. As it brings legal proceedings already instituted to an end, a
party sued on a compromise is not entitled to
raise defences to the
original cause of action. See
Hamilton v
Van Zyl
1983 (4) SA 379
(E) at 383H.
But a compromise induced by fraud, duress, justus error,
misrepresentation, or some other ground for rescission, is
voidable
at the instance of the aggrieved party, even if made an order of
court. See
Gollach & Gomperts (1967)
(Pty) Ltd v Universal Mills & Produce Co (Pty) Ltd and Others
1978 (1) SA 914
(A) at 922H.’
[9]
There is no evidence that the bank reserved the right to rely on the
original cause of action. Any action by the bank after
the compromise
could and should have been taken pursuant to the terms of the
compromise. However, no such action was ever taken
or is alleged to
have been taken by the bank.
[10]
Despite this, a sale of execution by way of auction was proceeded
with whilst not being based on any new judgment or order
pursuant to
the compromise but ostensibly, still based on the original judgment.
I am of the view that on this basis alone the
appellants are entitled
to be declared to have remained the registered owners of the
immovable property as there was no basis to
hold a sale in execution.
[11]
The appellants attended the auction in August 2010 where the
successful bidder was one Vilakasi. The auction was completed
and
after some discussion between the auctioneer and Vilakasi the latter
had left without having secured the mandatory deposit.
The appellants
later discovered that the immovable property was not purchased by
Vilakasi nor was a re-auction held but rather
it was sold to the
third respondent at a much lower amount than the bid of Vilakasi. As
a result of these facts, the appellants
launched an application to
court to have the sale to the third respondent set aside. It was at
this time that the bank advised
the appellants that the application
need not be proceeded with as it would see to it that the sale to the
third respondent was
cancelled. Notwithstanding this undertaking, the
property was transferred to the third respondent, who, in turn,
concluded a written
deed of sale with the fourth respondent. As a
consequence of these events, the appellants launched a further
application to court
to have the transfer of the property to the
third respondent, and the sale by the third respondent to the fourth
respondent, set
aside. Spilg J issued an order setting aside both the
transfer of the property to the third respondent as well as the sale
by the
latter to the fourth respondent. The effect of the order was
that the appellants would have been restored as the registered owners
of the immovable property, had the order of Spilg J been implemented.
[12]
Despite the aforegoing facts, which are not in dispute, the property
was transferred from the third respondent to the fourth
respondent.
Regarding this latter event, the fourth respondent sets out facts to
show how it acquired the property from the third
respondent for a
second time with the assistance of an agent.
[13]
From the onset, the property was registered in the names of the
appellants. They had the real right therein
[4]
,
which could only be diminished by lawful conduct. There is no
explanation how the immovable property came to be registered in
the
name of the third respondent. Neither the bank nor the third
respondent filed affidavits to explain how the transfer to the
third
respondent occurred or by what authority it occurred. In the absence
of any evidence of how the third respondent could lawfully
have
become the registered owner of the property in the face of the
evidence of the appellants, the only conclusion that can be
reached
is that the appellants were unlawfully deprived of their ownership.
It matters not that the third respondent thereafter
transferred the
property to the fourth respondent – the latter who may have
been bona fide in its acquisition of the property
although there is
also a dispute about that fact. The third respondent obtained no
lawful rights of ownership. He could pass nothing
to the fourth
respondent. In
Menqa
and Another v Markom and Others
[5]
it was said
[6]
:
‘
As
regards the question of the implications of these findings for a bona
fide purchaser of property pursuant to such an invalid
sale in
execution, the court in
Schloss
emphasised that any exercise of public power has to be carried out in
terms of a valid rule of law. The court approved of the finding
of
McCall AJ in
Joosub
to the effect that, where there was no sale in execution or where the
sale in execution which purported to have taken place was
a nullity,
then it could not have served to pass any title to the property
concerned to the purchaser or to any successor-in-title
into whose
name the property was subsequently transferred: “The plaintiff
[the judgment debtor], as owner of the property,
would be entitled to
recover the [property] by way of a rei vindicatio.”’
[14]
In
Knox
NO v Mofokeng and Others
[7]
it
was
said
[8]
:
‘
[27]
It is evident from the facts in the present matter that the property
fell within the estate of the late SM Knox and that the
sale in
execution took place in contravention of s 30 of the Administration
of Estates Act. It is evident that the sheriff (being
the person
charged with the execution of the writ) could have known of the death
of the late Mrs SM Knox, as the applicant was
cited in the summons in
his capacity as executor of the estate of the late SM Knox. In any
event, there was no denial of the applicant's
allegation in the
founding affidavit that the sale in execution constituted a
contravention of s 30 of the Administration of Estates
Act. It
follows that the sale in execution of the property constituted a
nullity and that the sheriff had no authority to enter
into the real
agreement for the transfer of the property to the second respondent
pursuant to the purported sale in execution of
the property. Since
the transfer of the property to the second respondent was invalid,
the subsequent sale and transfer of the
property by the second
respondent to the first respondent was also invalid, because the
second respondent was not the owner of
the property. The principle,
that no one can transfer more rights to another than he himself has,
applies to the real agreement
in respect of the second sale as well.
See eg
Oriental
Products (Pty) Ltd v Pegma 178
Investments Trading CC and Others
2011
(2) SA 508
(SCA) in para 26, where Harms DP found that the old adage
nemo plus iuris ad alium transferre
potest quam ipse haberet
applies to
such a situation.
[28]
I am accordingly of the view that the applicant is in principle
entitled to claim vindication of the property. In
Joosub v JI Case
SA (Pty) Ltd
(now known as Construction & Special
Equipment Co (Pty) Ltd) and Others
1992 (2) SA 665
(N) at 680G –
H and 681H, the court found, after considering the relevant
Roman-Dutch texts, that it was not clear whether
the common-law
remedy of the owner was the rei vindicatio or restitutio in integrum,
and whether the owner was obliged to restore
the price to the
purchaser, or was obliged to do so only if the latter could not
recover it from the seller. In that matter the
issues were decided on
exception and the court found it unnecessary to decide the issue.’
[15]
No person may be deprived of his or her property unless by lawful
means. The original judgment and order, having been compromised,
there was no basis for the transfer of the property to any other
person, least of all the third respondent who’s ‘ownership’
remains unexplained. On the papers before the court, the third
respondent had no lawful title to the immovable property and the
fourth respondent, similarly, could not obtain lawful title from the
third respondent and the appellants were entitled to have
the
register restored to reflect them as the lawful registered owners of
the immovable property.
[16]
There is a further issue that needs to be dealt with. When Spilg J
issued the order referred to above, the sixth respondent
(the wife of
the third respondent) was not a party to the application and order.
However, subsequent to the issue of the application
in this matter,
the issue of the sixth respondent’s non-joinder (as co-seller
with the third respondent) was raised. She
was joined as a party and
was served with the papers. The sixth respondent, like the third
respondent, knowing what relief was
sought by the appellants, took no
part in the proceedings and did not claim any right as part owner and
co-seller of the property.
On the papers before the court the sixth
respondent was in the exact same position as her spouse, the third
respondent and it is
not surprising that she did not enter into the
fray. She was well aware of the order given by Spilg J that set aside
the sale and
transfer to her husband as well as the sale to the
fourth respondent and she did not claim any right or interest in the
matter
and must be taken as having no defence to the appellants’
claim.
[17]
The fourth respondent appears to accept the facts up to this point
but advanced on appeal, that the appellants are estopped
from
claiming ownership of the property due to the alleged inaction of the
appellants to have the property re-transferred into
their name or to
have an interdict registered in the deeds office after they learnt
that the property was unlawfully registered
in the name of the third
respondent. In this regard, the fourth respondent, relying on
Oriental
Products (Pty) Ltd
[9]
,
submitted that the appellants were estopped from claiming ownership
due to their negligence.
[18]
The only defence relied upon by the fourth respondent during
submissions before us, was narrowed down to the submission that
the
appellants were estopped from asserting their ownership due to their
negligence in failing to obtain or register a caveat in
the deeds
office, which would have prevented a transfer of the property to the
fourth respondent. In order to succeed in
a plea that the
appellants should be denied the right to assert ownership of the
immovable property, due to them representing a
different factual
state of affairs, the fourth respondent bore the onus to satisfy the
court that the appellants were negligent
in their conduct
[10]
.
[19]
Regarding estoppel by representation Corbett JA said in
Aris
Enterprises (Finance) v Protea Assurance Company Limited
[11]
:
‘
The
essence of the doctrine of estoppel by representation is that a
person is precluded, ie estopped, from denying the truth of
a
representation previously made by him to another person if the
latter, believing in the truth of the representation, acted thereon
to his prejudice (see Joubert
The Law of
South Africa
vol 9 para 367 and the
authorities there cited).
The
representation may be made in words, ie expressly, or it may be made
by conduct, including silence or inaction, ie tacitly (ibid
para
371); and in general it must relate to an existing fact (ibid para
372).’
[20]
In
South
African Broadcasting Corporation v Coop and Others
[12]
, Navsa JA said as follows
[13]
:
‘
[64]
The essentials of estoppel can briefly be stated as follows: The
person relying on estoppel will have to show that he or she
was
misled by the person whom it is sought to hold liable as principal to
believe that the person who acted on the latter's behalf
had
authority to conclude the act, that the belief was reasonable and
that the representee acted on that belief to his or her prejudice.
[65]
The distinction between actual and ostensible authority was explained
by Denning MR in
Hely-Hutchinson v Brayhead Ltd and Another
[1968] 1 QB 549
(CA) at 583A - G ([1967]
3 All ER 98)
at 102A - E
(All ER):
“
(A)ctual
authority may be express or implied. It is express when it is given
by express words, such as when a board of directors
pass a resolution
which authorises two of their number to sign cheques. It is implied
when it is inferred from the conduct of the
parties and the
circumstances of the case, such as when the board of directors
appoint one of their number to be managing director.
They thereby
impliedly authorise him to do all such things as fall within the
usual scope of that office. Actual authority, express
or implied, is
binding as between the company and the agent, and also as between the
company and others, whether they are within
the company or outside
it.
Ostensible
or apparent authority is the authority of an agent as it appears to
others. It often coincides with actual authority.
Thus, when the
board appoint one of their number to be managing director, they
invest him not only with implied authority, but
also with ostensible
authority to do all such things as fall within the scope of that
office. Other people who see him acting as
managing director are
entitled to assume that he has the usual authority of a managing
director. But sometimes ostensible authority
exceeds actual
authority. For instance, when the board appoint the managing
director, they may expressly limit his authority by
saying he is not
to order goods worth more than £500 without the sanction of the
board. In that case his actual authority
is subject to the £500
limitation, but his ostensible authority includes all the usual
authority of a managing director.
The company is bound by his
ostensible authority in his dealings with those who do not know of
the limitation. He may himself do
the ''holding-out''. Thus, if he
orders goods worth £1 000 and signs himself ''Managing Director
for and on behalf of the
company'', the company is bound to the other
party who does not know of the £500 limitation. . . .”
[66]
In
NBS Bank Ltd v Cape Produce Co (Pty) Ltd and Others
2002
(1) SA 396
(SCA) this Court, in applying that dictum, stated (in para
[25]):
“
As
Denning MR points out, ostensible authority flows from the
appearances of authority created by the principal. Actual authority
may be important, as it is in this case, in sketching the framework
of the image presented, but the overall impression received
by the
viewer from the principal may be much more detailed. Our law has
borrowed an expression, estoppel, to describe a situation
where a
representor may be held accountable when he has created an impression
in another's mind, even though he may not have intended
to do so and
even though the impression is in fact wrong. . . . But the law
stresses that the appearance, the representation, must
have been
created by the principal himself. The fact that another holds himself
out as his agent cannot, of itself, impose liability
on him. Thus, to
take this case, the fact that Assante held himself out as authorised
to act as he did is by the way. What Cape
Produce must establish is
that the NBS created the impression that he was entitled to do so on
its behalf. This was much stressed
in argument, and rightly so.
And
it is not enough that an impression was in fact created as a result
of the representation. It is also necessary that the representee
should have acted reasonably in forming that impression
:
Connock's (SA) Motor Co Ltd v Sentraal
Westelike Ko-operatiewe Maatskappy Bpk
1964
(2) SA 47
(T) at 50A - D. Although an intention to mislead is not a
requirement of estoppel, where such an intention is lacking and a
course
of conduct is relied on as constituting the representation,
the conduct must be of such a kind as could reasonably have been
expected
by the person responsible for it, to mislead.
Regard
is had to the position in which he is placed and the knowledge he
possesses
.”’ (own emphasis)
[21]
In
Bester
NO and Others
[14]
,
Brand
JA said
[15]
:
‘
Broadly
stated, the concept of estoppel, borrowed from English law as applied
by our courts, amounts to this: when a person (the
representor) has
by words or conduct made a representation to another (the
representee) and the latter acted upon the representation
to his or
her detriment, the representor is estopped, that is precluded, from
denying the truth of the representation (see eg
Union
Government v Vianini Ferro-Concrete Pipes (Pty) Ltd
1941 AD 43
at 49). As the party who raised the defence of estoppel,
Absa therefore bore the onus to allege and prove a misrepresentation
by
Schmidt Bou upon which Absa relied and which reliance was the
cause of it acting to its detriment (see eg
Oriental
Products (Pty) Ltd v Pegma
178
Investments Trading CC and Others
2011
(2) SA 508
(SCA) para 19).’
[22]
In the
Oriental
Products
matter
it was held
[16]
that:
‘
.
. . The possessor raising estoppel must prove that:
(a)
there was a representation by the owner, by conduct or otherwise,
that the person who disposed of his property was the owner
or was
entitled to dispose of it;
(b)
the representation must have been made negligently in the
circumstances;
(c)
the representation must have been relied upon by the person raising
the estoppel; and
(d)
such person's reliance upon the representation must be the cause of
his detriment.’
[23]
In the matter under consideration, the fourth respondent failed to
prove the factors referred in
Oriental Products
. No
representations were made by the owner or on behalf of the owner to
it. Having obtained an order directing the first, second
and third
respondents to correct the register, the appellants had secured their
rights. They had the comfort that the court ordered
those parties who
caused them harm to do take the necessary steps to correct the
register. They cannot be said to have been negligent
as the duty to
ensure the correction of the register was upon those respondents.
[24]
The court a quo held:
‘
Under
the circumstances the court finds that the respondents bought the
property based on the for sale notice and assurance given
by the
estate agents’.
[25]
Neither the erection of the ‘for sale’ sign on the
property, nor the assurance given by the estate agents can be
laid at
the feet of the appellants. On the contrary, when the appellants
became aware of this ‘for sale’ sign on the
property they
caused it to be removed. It is not in dispute that the appellants
knew nothing of the conduct of the estate agent.
[26]
In these circumstances, I am of the view that the court a quo erred
in holding that the appellants were negligent in not bringing
the
court order to the attention of the fifth respondent, the Registrar
of Deeds. The duty to correct the registers with the fifth
respondent
was placed upon the first, second and third respondents, who failed
to do so.
[27]
The first important issue that distinguishes the present matter from
the cases referred to above is that the fourth respondent
never had
any dealings whatsoever with either of the appellants or even the
third respondent. The fourth respondent exclusively
relied upon
representations made by an agent unknown to the appellants. It is not
in dispute that the agent had no authority to
act on behalf of the
appellants and reliance on representations made by the agent cannot
bind the appellants. Reliance on the doctrine
of estoppel in such
circumstances would, in my view, be misplaced.
[28]
The fourth respondent averred that the appellants are estopped from
asserting their right of ownership due to their failure
to take steps
to register an interdict in order to avoid the transfer to the fourth
respondent.
There is nothing on the papers
to show what effect this interdict would have had, if any. However,
the appellants launched an urgent
application in 2010. At that time
the appellants obtained an undertaking from the attorney, acting for
the third and fourth respondents,
that the transfer from the third
respondent to the fourth respondent would not take place. Thereafter,
the appellants brought another
a substantive application during 2011
when an order was issued by Spilg J which order came to the knowledge
of to the fourth respondent.
The order reads as follows:
‘
1.
The sale in execution, held on 11 August 2011, by the first
respondent to the third respondent, of the property described as
Portion 51 (Remaining Extent) of the farm 401 Olifantsfontein
Township, Registration Division J.R., Province of Gauteng, situated
at 51 Olifantsfontein Road, Olifantsfontein (‘the property”),
is set aside.
2.
The transfer of the property into the name of the third respondent
pursuant to the sale referred to in paragraph 1, is set aside.
3.
The sale of the property by the third respondent to the fourth
respondent on 28 March 2011, is set aside.
4.
The fifth respondent shall do all things and take all steps as may be
necessary to give effect to the provisions of paragraph
2 above.
5.
The first, second and third respondents, shall do all such things,
take all such steps and sign all documents as may be necessary
to
give effect to the provisions of paragraph 1 to 3 above, in the event
that any such respondent fails to do so, then the Sheriff
of this
Court, shall do all such things, take all such steps, and sign all
such documents, in the place and stead of any such respondent.
6.
The first, second and third respondents shall pay the costs of this
application, jointly and severally.
7.
The applicants are to forward the papers in this application to the
National Prosecuting Authority (the “NPA”) and
the NPA is
requested to consider the need for investigation.’
[29]
Significantly, the duty to give effect to the cancellation of the
transfer to the third respondent was placed on the first,
second and
third respondents who were, according to the papers, the cause of the
unlawful transfer to the third respondent in the
first place. There
was nothing for the appellants to do at the time. In addition, the
court order, which effectively cancelled
the transfer of the
immovable property to the third respondent, came to the knowledge of
the fourth respondent who received its
purchase price back. The
fourth respondent accordingly knew full well that the third
respondent had no title to the property and
could not sell the
property to it. Despite this, and relying exclusively on the word of
an agent who failed to place an affidavit
before the court to explain
his actions, the fourth respondent again entered into an agreement of
sale with the third respondent.
The contention that the appellants
were negligent in not obtaining an interdict against the title deed
is rather far-fetched having
regard to the knowledge of the fourth
respondent who, despite that knowledge, again entered into an
agreement with the third respondent.
Red flags should have been
raised with the fourth respondent, if regard is had to paragraph
seven of the order of Spilg J. In addition,
there is a great deal of
correspondence in which the fourth respondent attempted to negotiate
the purchase of the property from
the appellants prior to the fourth
respondent entering into the second purchase agreement with the third
respondent. Despite this,
the fourth respondent signed an agreement
with the third respondent to acquire the property. It lies not in the
mouth of the fourth
respondent to argue that the appellants were
negligent vis-à-vis the fourth respondent if regard is had to
the direct knowledge
of the fourth respondent of the true facts. It
cannot be said that the fourth respondent acted reasonably in forming
the impression
that the third respondent was entitled to sell the
property having regard to its knowledge of the true facts
[17]
.
[30]
Having received the knowledge that the court had set aside the
transfer to the third respondent, as well as the subsequent
sale to
the fourth respondent, the latter had ample reason to suspect that
the third respondent had no title to the property
[18]
.
Although the fourth respondent relied on the judgment of the
Oriental
Products
case in order to justify its submission regarding negligence, the
Oriental
Products
case, in my view, is distinguishable from this matter in a number of
ways, not least of all the fact that the registered owner
in the
Oriental
Products
case did nothing intervene when it learnt that the property had been
registered in the name of a new registered owner. In the present
matter the appellants approached the court twice and obtained an
order to rectify the unlawful transfer and an attorney gave the
undertaking that it would be done.
[31]
It is significant that the fourth respondent’s assertion of
negligence on the part of the appellants is, in the main,
premised on
the failure of the appellants to obtain an interdict against the
title deed. This failure was not the cause of the
fourth respondent’s
entering into a second agreement of sale with the third respondent as
the fourth respondent relied wholly
on representations made the agent
who misled the fourth respondent. The fourth respondent does not
allege that it inspected the
title deed at the deeds office and
relied on its contents. Any negligence of the appellants, if there
was such negligence, is wholly
unconnected to the manner in which the
fourth respondent acquired the immovable property.
[32]
Due to the conclusion reached by the court a quo, it did not deal
with the relief sought by the appellants that the third and
fourth
respondents be found in contempt of the court order of Splig J.
However, the appellants did not pursue that relief on appeal
and I
need not say anything further about it.
[33]
In the circumstances, I propose, that the appeal succeeds with costs
and that the order of the court below, dismissing the
application
with costs be set aside, and the following order be substituted
therefor:
1.
The registration of the property described as Portion 51 (Remaining
Extent) of the Farm 410 Olifantsfontein Township, Registration
Division J.R. Province of Gauteng, situated at 51 Olifantsfontein
Road, Olifantsfontein (‘the property’) into the fourth
respondent’s name on 27 March 2012, is set aside.
2. The property
shall be registered in the names of the first and second appellants.
3.
Without limiting the right of the appellants to do so, the Sheriff
shall do all things and take steps as may be necessary to
give effect
to the provisions of para 1 and 2 above and is authorised to sign all
documents required to give effect to this.
4.
The fifth respondent shall do all things and take all steps as may be
necessary to give effect to the provisions of para 1 and
2 above.
5.
The second, third and fourth respondents are ordered to pay the costs
of the application, jointly and severally, the one paying
and the
other to be absolved, including the costs which were reserved on 30
January 2013.
W.L.
Wepener
I
agree. It is so ordered.
K.
Satchwell
I
agree.
M.
Makume
Counsel
for Appellants: N. Alli
Attorneys
for Appellants: Stan Fanaroff and Associates
Counsel
for the Respondents: C.J. Mouton
Attorneys
for the Respondents: Michael Krawitz and Co.
[1]
See
Gollach
& Gomperts (1967) (Pty) Ltd v Universal Mills and Produce Co
(Pty) Ltd and Others
1978 (1) SA 914
(A) at 921A-D.
[2]
2000
(1) SA 126
(ZS).
[3]
At
138I- 139C.
[4]
ABSA
Bank Limited v Keet
2015 (4) SA 474 (SCA).
[5]
2008
(2) SA 120
(SCA).
[6]
At
para 19.
[7]
2013
(4) SA 46 (GSJ).
[8]
At
paras 27 -28.
[9]
Oriental
Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others
2011 (2) SA 508 (SCA).
[10]
Bester
NO and Others v Schmidt Bou Ontwikkelings CC
2013 (1) SA 125
(SCA) at para 17,
Oriental
Products
at para 19.
[11]
1981
(3) SA 274
(A) at 291D.
[12]
2006
(2) SA 217 (SCA).
[13]
At
paras 64-66.
[14]
Note
10 supra.
[15]
At
para 17.
[16]
At
para 19.
[17]
Connock's
(SA) Motor Co Ltd v Sentraal Westelike Ko-operatiewe Maatskappy Bpk
1964 (2) SA 47
(T) at 50A -51A;
South
African Broadcasting Corporation
supra at para 19.
[18]
See
Oriental
Products
at para 28.