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[2010] ZAGPJHC 118
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Republic of Zimbabwe v Sheriff Wynberg North and Others (2009/34015) [2010] ZAGPJHC 118 (22 November 2010)
NOT REPORTABLE
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
CASE NO
:
2009/34015
DATE:
22/11/2010
In the matter between:
THE
REPUBLIC OF ZIMBABWE
….....................................
Applicant
and
SHERIFF
WYNBERG NORTH
..............................................
First
Respondent
KFW
BANKENGRUPPE (formerly
KREDITANSTALT
FUR WIERDERAUFBAU)
..................
Second
Respondent
LOUIS
KAREL
FICK
..............................................................
Third
Respondent
RICHARD
THOMAS ETHEREDGE
.....................................
Fourth
Respondent
WILLIAM
MICHAEL CAMPBELL
….....................................
Fifth
Respondent
THE
PRESIDENT OF THE REPUBLIC OF
SOUTH
AFRICA
......................................................................
Sixth
Respondent
______________________________________________________________
J U D G M E N T
______________________________________________________________
LAMONT, J
:
[1] The applicant is the owner of four immovable properties in the
Western Cape and two properties in Gauteng.
[2] The second respondent caused writs to be issued seeking to
attach the properties with a view to selling them to reduce the
indebtedness of the applicant to it. It is common cause that the
procedure adopted in the attachment was irregular and that the
attachments fall to be set aside.
[3] The applicant also sought
relief in the form of a declaration that the writs issued could not
be executed against immovable
property belonging to the applicant on
the basis of the provisions of the Foreign States Immunities Act No.
87 of 1981 (“
the
Act
”). Under
and in terms of section 14 of that Act:
“
14.
Other procedural privileges.— (1) Subject to the provisions of
subsections (2) and (3) —
(a) relief shall not be given against a foreign state by way of
interdict or order for specific performance or for the recovery of
any movable or immovable property; and
(b) the property of a foreign
state shall not be subject to any process —
(i) for its attachment in order to found jurisdiction;
(ii) for the enforcement of a judgment or an arbitration award; or
(iii) in an action in rem,
for its attachment or sale.
(2) Subsection (1) shall not prevent the giving of any relief or
the issue of any process with the written consent of the foreign
state concerned, and any such consent, which may be contained in a
prior agreement, may be expressed so as to apply to a limited
extent
or generally, but a mere waiver of a foreign state’s immunity
from the jurisdiction of the courts of the Republic
shall not be
regarded as a consent for the purposes of this subsection.
(3) Subsection (1)(b) shall
not prevent the issue of any process in respect of property which is
for the time being in use or intended
for use for commercial
purposes.
”
Under and in terms of Section 4 of the Act a commercial transaction
is defined:
“
4.
Commercial transactions.— (1) A foreign state shall not be
immune from the jurisdiction of the courts of the Republic in
proceedings relating to —
(a) a commercial transaction entered into by the foreign state;
or
(b) an obligation of the foreign state which by virtue of a
contract (whether a commercial transaction or not) falls to be
performed
wholly or partly in the Republic.
(2) Subsection (1) shall not apply if the parties to the dispute
are foreign states or have agreed in writing that the dispute shall
be justiciable by the courts of a foreign state.
(3) In subsection (1)
‘commercial transaction’ means —
(a) any contract for the
supply of services or goods;
(b) any loan or other transaction for the provision of finance and
any guarantee or indemnity in respect of any such loan or other
transaction or of any other financial obligation; and
(c) any other transaction or activity or a commercial, industrial,
financial, professional or other similar character into which
a
foreign state enters or in which it engages otherwise than in the
exercise of sovereign authority,
but does not include a
contract of employment between a foreign state and an individual.
”
[4] Accordingly if the property was for the time being in use or was
intended for use for commercial purposes it could be attached
otherwise it could not.
[5] It was common cause that the Gauteng property was immune.
[6] The dispute hinged on whether or not the property situate in the
Western Cape was attachable.
[7] Those properties consist of
53 and 55 Kuyper Street, Zonneblom, 46A Tenant Road, Kenilworth and
28 Salisbury Road, Wynberg.
The Wynberg property is occupied by a
South African citizen who has resided on the property since 1 July
2002 pursuant to an agreement
of lease concluded during June 2002.
The Kenilworth property is vacant. It was occupied by the Zimbabwe
Consulate in Cape Town
until that Consulate ceased operations. The
properties in Zonneblom previously housed the Zimbabwe Consulate in
Cape Town. The
properties are currently occupied by vagrants and
appear to be abandoned. From time to time in the past the house on
one of the
properties was let as an office and a former tenant who
left the house some two years ago said it was “alright but it
was
not great either”.
[8] The applicant filed a Protocol Note No. 0910/2010. In that note
it indicates that the Western Cape properties were currently
not used
as Consular functions in the following terms:
“
The
Zimbabwe Consular functions in Cape Town were only temporarily
suspended, and the Consulate and Diplomatic residences are currently
under the administration of the Embassy in Pretoria.
”
[9] In its affidavit the applicant stated:
“
63.
These immovable properties … are utilised purely to support
functions of the Government of Zimbabwe and are utilised
by the
applicant for purely Government purposes.
64. In particular the
properties are used as residential properties and in fact house their
Consular Offices in support of the
applicant’s Consular posts.
They are not used or intended to be used for commercial purposes.
”
None of the properties is
registered as a property which qualifies for diplomatic immunity
under the
Diplomatic Immunities and Privileges Act 37 of 2001
. The
statement in paragraph 64 supra appears to be a generalisation which
must be read in conjunction with the facts set out in
the Protocol
Note. Although the statement is strictly speaking inaccurate in
relation to the Western Cape properties there was
no attempt by the
applicant to mislead. The applicant in its replying affidavit stated
as follows:
“
25.4
I submit that it is the intention and has always been the intention
of the applicant to utilise the relevant properties for
executing its
Government functions.
To the extent that one of
the properties is being leased, I submit that this was done not for
commercial purposes but rather
to preserve the property against
vandalism pending the resumption of the applicant’s consular
functions in Cape Town.
”
It was further stated:
“
32.
These properties were leased out simply to preserve the property and
prevent it from falling into neglect as has happened with
the
properties situate at 53 and 55 Kuyper Street, Zonneblom which has
been unfortunately illegally occupied by vagrants. The
properties
were for the above reasons, leased out below market price.
”
The reference made in that paragraph is to the let property referred
to above. The applicant further stated:
“
The
applicant intends to use these properties [with reference to the
Western Cape properties] for Government functions as soon as
the
resource constraints are abated and consular functions in Cape Town
are resumed.
”
It appears to me that the motive
for the letting of the property is irrelevant to the consideration of
whether or not the property
is for the time being used for commercial
purposes. Commercial purposes include letting of property and
receiving an income from
that property. In my view accordingly the
property situate at 46A Tenant Road, Kenilworth is for the time being
in use for commercial
purposes. It was submitted that the clause “
or
intended for use
”
governed the usage of the property and that no matter the current
usage if it was intended for use in the future for Government
purposes that the property is immune. This construction of the
subsection in my view is flawed. It is apparent that the property
can
change its character depending upon the usage from time to time. At
the current time the usage of the property is commercial
and hence
the property is attachable.
[10] Insofar as the remaining
properties are concerned it appears to me that there is no cogent
factual basis before me to disbelieve
the stated intention of the
applicant namely to resume use of the property itself otherwise than
for commercial purposes. The
second respondent has no factual basis
than to gainsay the stated factual intention of the applicant. It was
submitted that I should
draw an inference from the fact that the
properties were vacant; that the applicant was holding the property
with a view to obtaining
a commercial benefit and hence that the
property are being used for commercial purposes and/or that the
intention expressed by
the applicant gives an opinion.
[11] In my view there is an equally plausible contrary reason for
the applicant to hold the property namely that suggested by
it.
[12] In my view there is no
dispute of fact. The factual evidence before me establishes that the
remaining properties in the Western
Cape are not attachable.
[13] The applicant has been
substantially successful in that all the attachments are procedurally
invalid and in that the bulk
of the property are immune from
attachment. In these circumstances I propose to award the applicant
the costs of the application.
[14] I would make the following order:
“
1.
The writ of execution extends to the attachment of the immovable
property owned by the applicant situate at 46A Tenant Road,
Kenilworth.
The
writ of execution does not extend to the authorisation of the
attachment of the immovable properties of the applicant situate
at
53 and 55 Kuyper Street, Zonneblom, 28 Salisbury Road, Wynberg, 179
Beryl Street, Bruma, Johannesburg, Gauteng and 48 Klip
Street,
Observatory, Johannesburg, Gauteng.
The
attachment of all the said properties are set aside.
The
second respondent is to pay the costs of the application including
the costs of senior and junior counsel where employed.
”
_____________________________
C
G LAMONT
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
Counsel for Applicant : Adv. P. Mtshaulana SC
Attorneys for Applicant : Mathopo Moshimane
Mulangaphuma Inc
Counsel for Second Respondent : Adv. H. Epstein SC
Adv. N P G Redman
Attorneys for Second Respondent : Wertheim Becker Inc.
Date of hearing : 10 November 2010
Date of Judgment : 22 November 2010