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[2012] ZAECPEHC 7
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Alan Hendricks Body Corporate v Trafalgar Property Management (Pty) Ltd and Another (1684/2011) [2012] ZAECPEHC 7 (7 February 2012)
IN THE HIGH COURT OF
SOUTH AFRICA NOT REPORTABLE
EASTERN CAPE, PORT
ELIZABETH
Case No.: 1684/2011
Date Heard: 26 January
2012
Date Delivered: 7
February 2012
In the matter between:
ALLAN HENDRICKS BODY
CORPORATE
…...............................
Applicant
and
TRAFALGAR PROPERTY
MANAGEMENT (PTY) LTD
…....
First
Respondent
TRAFALGAR FINANCIAL
SERVICES (PTY) LTD
…......
Second
Respondent
JUDGMENT
EKSTEEN J:
[1] The applicant is
the body corporate of a sectional title scheme known as “Allan
Hendricks”. The first respondent
is the managing agent for the
applicant. During April 2009 the second respondent entered into a
“Levy Solution Agreement”
(herein referred to as the
“loan agreement”) with the applicant and the first
respondent in terms of which the second
respondent undertook to lend
and advance money to the applicant upon certain conditions set out in
the loan agreement. The relationship
between the applicant and the
respondents has since soured. The applicant now seeks the following
relief:
“
2.1 That
the loan agreement between the Second Respondents and Applicant be
declared invalid and of no force and effect, that the
Second
Respondent be interdicted and restrained from advancing and or
lending any further monies to the Applicant in terms of the
Loan
Agreement, and finally that the Second Respondents be interdicted
from receiving any further monies from the Applicant in
terms of the
Loan Agreement.
2.2 That the Management Agreement
with the First Respondent is hereby deemed to be cancelled with
effect from 31 March 2011.
2.3 The First Respondent is ordered
to pay all moneys collected by it on behalf of the Applicant with
effect from 31 March 2011
over to the Applicant.
2.4 That First Respondent and/or the
Second Respondent is interdicted and restrained from taking legal
action against any of the
defaulting residents and/or property owners
in terms of the Management Contract for outstanding levies, including
the charging
of interest on overdue levy accounts until an
independent audit for individual residents and/or property owners
determines actual
indebtedness.”
The history
[2] It is common cause
that the financial affairs of the applicant deteriorated over the
years, largely because of a culture of
non-payment of levies by
members, and the applicant fell deeper and deeper into debt. During
or about April 2009 the applicant
was, by way of example, indebted to
the Nelson Mandela Bay Municipality in the sum of R436 565,54.
The property in Allan Hendricks
was falling into disrepair and the
applicant was in need of financial assistance. These circumstances
gave rise to the loan agreement.
I pause to mention that there is
considerable dispute relating to the manner in which the loan
agreement came about. I shall revert
below to the factual disputes.
The material terms
of the agreement
[3] The loan agreement
provides for an initial advance to be made by the second respondent
to the applicant within three days of
the signature of the agreement
and monthly advances thereafter. The initial advance is defined in
the loan agreement as meaning
“an amount equal to the levies
which are due and unpaid as of the date of signature and includes any
interest accrued and
unpaid thereon, as determined in accordance
with” the loan agreement. This clause strives to provide access
for the applicant
to the money of which it has been deprived by the
default of its members.
[4] The monthly
advances referred to is similarly defined as meaning “the
aggregate of the levies payable by the owners to
the body corporate
in a calendar month”. In this manner the loan agreement seeks
to ensure that the applicant will receive
a monthly income which it
is entitled to from its members.
[5] In terms of clause
8.2 of the loan agreement the loan was repayable “from time to
time on the date of receipt of payments
of levies from the owners
from time to time, limited … to the amount of such receipt
from such owners.”
[6] The agreement then
proceeds to provide as follows:
“
8.3
Without detracting from clause 8.2, and in addition thereto, to the
extent that:
8.3.1 the whole of part of an
advance is owing by the Body Corporate to TFS; and
8.3.2 that advance or the
outstanding part thereof is represented by funds lent by TFS to the
Body Corporate in respect of levies
payable by an owner to the Body
Corporate (whether under the initial advance, the monthly advances or
any special levy advance/s);
and
8.3.3 any of those levy remain owing
by that owner; and
8.3.4 the applicable immovable
property in respect of which that owner is registered as the owner or
holder thereof is sold in execution
…; and
8.3.5 the proceeds received by TFS
from that sale in execution are less than the outstanding amount of
that advance …
the Body Corporate will pay the
outstanding balance of that advance to TFS within 10 (ten) days of
the date of that sale in execution
or if TFS so elects, within such
longer period as TFS may notify the Body Corporate in writing”.
[7] TFS is a reference
to second respondent. The money loaned is accordingly repayable
primarily from the collection of levies,
both current and arrear. To
this end the applicant resolved in 2008, prior to the conclusion of
the loan agreement that moneys
owed by its members to it would bear
interest at 6% above the prime rate.
[8] In terms of clause
10 of the loan agreement the applicant authorised and instructed the
first respondent “solely and exclusively,
to collect the
levies” and the first respondent accepted such authorisation on
the terms and conditions set out in the loan
agreement. Clause 10.2
proceeds as follows:
“
10.2 For
as long as this sole and exclusive authority and instruction endure,
the Body Corporate shall not:
10.2.1 collect nor shall it be
entitled to collect the levies; nor
10.2.2 authorise, instruct nor
appoint nor allow any other person or agent (other than TPM) to
collect the levies”.
TPM is a reference to
the first respondent.
[9] Clause 15.1 of the
loan agreement records the security given for the loan as follows:
“
15.1 As
security for the Body Corporate’s indebtedness to TFS pursuant
to the loan, the Body Corporate hereby cedes to TFS
(as a cession in
security and not as an out and out cession) all of the ceded claims,
as continuing covering security for the due
and proper payment on
demand and the due and proper performance of the secured
indebtedness, upon and subject to all of the terms
and conditions
contained in the cession. The cession will remain extant for as long
as the Body Corporate remains indebted to TFS
in terms of this
agreement.”
[10] Finally the
contract provides as follows in respect of the duration and
termination of the loan agreement:
“
19.1 This
agreement insofar as it relates to TFS and the Body Corporate shall
commence on the date of signature hereof and shall
continue for as
long as the Body Corporate remains indebted to TFS in terms of this
agreement.
19.2 This agreement insofar as it
relates to TPM and the Body Corporate shall commence on the date of
signature hereof and shall
continue for a period of 1 (one) year from
the date of signature hereof, whereafter it will automatically be
extended by revolving
successive periods of 30 (thirty) days each
unless it is terminated in accordance with clause 19.3.
19.3 After the expiry of a period of
1 (one) year from the date of signature hereof, each of TPM and the
Body Corporate shall be
entitled on written notice to the other of
them to cancel this agreement insofar as it relates to TPM and the
Body Corporate (but
not, for the avoidance of doubt, this agreement
insofar as it relates to TFS and the Body Corporate), provided that:
19.3.1 The Body Corporate shall not
be entitled under this clause 19.3 to cancel this agreement insofar
as it relates to TPM and
the Body Corporate unless and until the Body
Corporate’s entire indebtedness to TFS has been discharged; and
19.3.2 …
19.4 The Body Corporate has the
right to terminate this agreement between TFS and the Body Corporate
in terms of section 122 of
the National Credit Act.”
Disputes of fact
[11] The agreement was
concluded on 9 April 2009 and the second respondent duly proceeded to
advance sums of money to the applicant
in accordance with the
agreement. Notwithstanding these advances the applicant contends that
matters relating to the financial
welfare of the applicant did not
improve. On the contrary matters are now even worse than they were at
the time. This is not in
dispute, however, each party blames the
conduct of the other for this state of affairs. It is as a result
hereof that the application
was launched.
[12] The papers filed
are replete with material disputes of fact. The approach to material
disputes of fact in application proceedings
was authoritatively
stated by Corbett JA, as he then was, in
Plascon-Evans Paints
(Pty) Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A)
at 634H-635B:
“
It
is correct that, where in proceedings on notice of motion disputes of
fact have arisen on the affidavits, a final order, whether
it be an
interdict or some other form of relief, may be granted if those facts
averred in the applicant's affidavits which have
been admitted by the
respondent, together with the facts alleged by the respondent,
justify such an order. The power of the Court
to give such final
relief on the papers before it is, however, not confined to such a
situation. In certain instances the denial
by respondent of a fact
alleged by the applicant may not be such as to raise a real, genuine
or
bona
fide
dispute of fact. ... If in such a case the respondent has not availed
himself of his right to apply for the deponents concerned
to be
called for cross-examination under Rule 6(5)
(g)
of the Uniform Rules of Court ... and the Court is satisfied as to
the inherent credibility of the applicant's factual averment,
it may
proceed on the basis of the correctness thereof and include this fact
among those upon which it determines whether the applicant
is
entitled to the final relief which he seeks ... .”
[13] In the present
matter neither party has applied for the matter to be referred to
oral evidence. I shall accordingly consider
the evidence in
accordance with the approach set out above.
Validity of loan
agreement
[14] In respect of the
attack upon the validity of the loan agreement one Jaggers has
deposed to the founding affidavit on behalf
of the applicant. In the
founding affidavit Jaggers states as follows:’
‘
10. Upon
investigation we discovered that the matter of a loan agreement with
the Second Respondent had never been formally tabled
in any meeting
of the Applicant body or of its trustees. No special resolution was
taken by the outgoing trustees to enter into
the agreement either. …
11. One of the former trustees,
Aubrey Chapman, alleges that the trustees did not discuss the
agreement before they signed it. If
he is to be believed, the
resolution and the loan agreement was signed on the same day. He
further alleges that the trustees did
not fully understand that the
agreement was a loan agreement. He describes what amounts to a
cession agreement since the outgoing
trustees were brought under the
impression that the Second Respondent was buying the “debt
books” of the Applicant.
…’
[15] An affidavit
attested to by the said Chapman also annexed. The material portion of
Chapman’s statement reads as follows:
‘
7. In
March 2009 I was called to Trafalgar Property Management’s
offices along with E Stevens, J Korkie and F Cummings where
we met
with Mr. Michael Schaefer from that company in order to sign a
document that we were informed would benefit the complex.
It was
explained to us that we had to sign this document as trustees of the
body corporate.
8. …
9. Mr. Schaefer briefly explained to
us that the document that we were about to sign was an agreement in
terms of which Levy Solutions
would buy the “debt books”
from Allan Hendricks Body Corporate.
10. At the time I understood this to
mean that Levy Solutions would buy the existing debt of the levy
defaulters of the body corporate.
11. The reason for this was that at
the time the income of the body corporate could not cover all of its
expenses because many people
defaulted on levy payments. The general
idea was that the outstanding debt had to be claimed from those who
were responsible for
the backlog, ergo the levy defaulters.’
[16] This version of
events, however, is strenuously disputed. On behalf of the
respondents Mr Schaefer contends firstly that the
Levy Solution
Agreement was something that the trustees had asked for, it not a
matter of the second respondent foisting its product
upon the body
corporate. He contends that once the agreement had been drafted a
meeting of the trustees was convened where the
loan agreement was
fully discussed. He says that he personally attended the meeting of
trustees of the applicant which was attended
by Mr F Cummings, J
Korkie and E Chapman, in their capacity as trustees of the applicant
and one E. Stevens the chairman of the
applicant. Mr Schaefer states
that he personally fully explained the contents of the agreement and
how it works in the meeting
which lasted some two to three hours. It
is at this meeting that the trustees signed the agreement. Schaefer’s
version of
the meeting is confirmed by one Tudehope, the Port
Elizabeth branch manager of the first respondent who was also present
at the
meeting.
[17] The applicant did
not annex a copy of the agreement to the founding papers, however,
Schaefer annexed one to his answering
affidavit. Annexed to the
agreement and included in it is a Schedule A3, a document headed
“Resolution of the Trustees of
Allan Hendricks Body Corporate”.
It bears the date 26 March 2009 and records two resolutions. The
first of these resolutions
is of significance and reads as follows:
“
WHEREAS:
It has been resolved by the Trustees
of the Body Corporate, in terms of the powers conferred on the Body
Corporate by Section 38(e)
of the Sectional Titles Act 95/1996, to
enter into a Levy Solution Agreement with TRAFALGAR FINANCIAL
SERVICES (PTY) LIMITED for
the monthly loan of the levy amounts and
any special levy amounts that the trustees may wish to borrow from
TRAFALGAR FINANCIAL
SERVICES (PTY) LIMITED.”
The resolution was
signed by all four trustees, including Chapman.
Common law attack on
validity of the loan agreement
[18] Mr
Abrahams
,
who appears in this matter on behalf of the applicant, submits, on
the strength of the above stated averments by Chapman that
the
contract “falls to be set aside on the basis that there was no
consensus between the parties”. The lack of consensus,
he
submits, came about as a result of the alleged misrepresentation by
Schaefer as to the nature of the contract. He argues that
the
applicant would not have entered into the agreement at all if it had
known that the second respondent envisaged a loan agreement.
[19] Mr
Abrahams’
submissions are founded on the unequivocal acceptance of the
correctness of the assertions of Chapman. Adopting the approach,
however, to disputes of fact in motion proceedings as set out in
Plascon-Evans Paints
(
supra)
I think that the
evidence upon which the application falls to be adjudicated
establishes that the agreement came about as a result
of the request
of the applicant. Its content was fully explained at great length and
the trustees resolved to accept it. The resolution
signed by the
trustees and annexed to the agreement as Schedule A3 is brief but
crystal clear. What the trustees intended was a
loan agreement.
[20] There is a second
difficulty with the averments of Chapman. Chapman was one of four
trustees who signed the agreement. He avers
that he laboured under a
misconception as to the nature of the agreement. The other three
trustees have not come out in support
of him and none of the others
have attested to confirmatory affidavits. I do not think that where
multiple representatives signed
the agreement the fact that one of
those representatives labours under some misconception as to the
nature of the agreement can
lead to the conclusion that all, or the
majority of them, laboured under the same misconception.
[21] Whilst it is so
that the unilateral error of a contracting party which is caused by
the other party may entitle the mistaken
party to rescind the
contract this can only occur if the mistake is material and if the
mistaken party can show that he would not
have entered into the
agreement if he had known the truth. (See for example
The Law
of Contract in South Africa
:
R H Christie
, 5
th
ed p. 319 and 320.)
[22] In respect of the
first of these requirements, that the mistake must be material,
Chapman says that Schaefer explained to them
that the document which
they were about to sign was an agreement in terms of which “Levy
Solutions” would buy the “debt
books” from Allan
Hendricks Body Corporate. He says that he understood this to mean
that “Levy Solutions” would
buy the existing debts of the
levy defaulters of the body corporate. Even if I were to accept these
averments for purposes of the
adjudication of the application I do
not think that such a suggestion is so materially inconsistent with
the content of the loan
agreement as to vitiate the agreement. The
loan agreement does indeed provide for an “initial advance”
(i.e. the existing
debt of the levy defaulters) which was immediately
payable to the applicant after signature in an amount “equal to
the levies
which are due and unpaid as at the date of signature”.
The loan was indeed secured by a cession
in securitatem debiti
of all the claims, rights of action and receivables which the body
corporate had at the time. The first respondent was authorised
to
collect such outstanding levies inter alia, for the purpose of
repaying the advance. It seems to me that the understanding of
Chapman was materially in accordance with a part of the contract. It
is, however, only one part of the contract.
[23] Even if I err in
respect of the conclusion to which I have come in respect of the
first requirement it remains incumbent upon
the applicant to
establish that the trustees would not have entered into the agreement
had they known the truth. There is no averment
at all in the papers
from which this conclusion can be drawn. On the contrary, on the
facts which I am bound to accept for purposes
of the adjudication of
this application the content of the agreement was fully explained to
them and their appreciation of the
nature of the contract is borne
out by the resolution which all the trustees signed and which is
annexed to the contract.
Constitutional
attack on validity of the contract
[24] Mr
Abrahams
argues, in addition, that the contract falls to be set aside on the
basis that it is contrary to public interest. He has referred
me to
Barkhuizen v Napier
[2007] ZACC 5
;
2007 (5) SA 323
(CC) at para
[30]
which reads as follows:
“
... the
proper approach to the constitutional challenges to contractual terms
is to determine whether the term challenged is contrary
to public
policy as evidenced by the constitutional values, in particular,
those found in the Bill of Rights. This approach leaves
space for the
doctrine of
pacta
sunt servanda
to operate, but at the same time allows courts to decline to enforce
contractual terms that are in conflict with constitutional
values
even though the party may have consented to them.”
[25] In support of this
argument Mr
Abrahams
argues that it is apparent from
the papers that the applicant was in dire financial trouble at the
time that the loan agreement
was entered into and that the trustees
accordingly found themselves in an unequal bargaining position. In
the face hereof, it is
argued, the first respondent accepted the term
in the agreement which allowed it to be instructed as managing agent
of the applicant
“for so as long as the body corporate remains
indebted” to the second respondent. In doing so, it is argued,
the first
respondent acted in bad faith.
[26] The difficulty
with this argument is that there is no constitutional challenge
whether to the contract as a whole or to any
term of the contract
contained in the founding papers. In application proceedings the
affidavits serve the purpose of both pleadings
and evidence. An
applicant is required in his founding papers to make out a
prima
facie
case. In doing so he is required to set out all the facts
necessary to establish such a
prima facie
case in as complete
a way as the circumstances demand. He cannot, however, ”throw a
mass of material” at respondent
and expect the latter to
discover for himself some cause of action lurking therein. (See
Lipschitz and Schwartz NNO v Markowitz
1976 (3) SA 772
(W) 775H-776A; and
Moleah v University of Transkei
and
Others
1998 (2) SA 522
(Tk HC) 532-535.) If a legal point is
to be taken it too must be properly raised in affidavits. Thus in
Naude and Another v Fraser
[1998] ZASCA 56
;
(1998) 3 All SA 239
(A) at
260e-g Schutz JA stated:
“
There is
little point in granting a person a hearing if he does not know how
he is concerned, what case he has to meet. One of the
numerous
manifestations of the fundamental principle is the sub-rule that he
who relies on a particular section of a statute must
either state the
number of the section and the statute, or formulate his case
sufficiently clearly so as to indicate what he is
relying on:
Yannakou
v Appollo Club
1974 (1) SA 614
(A) at 623G. As the proposition itself indicates
there is no magic in naming numbers. The significance is that the
other party
should be told what he is facing.”
[27] The position is no
different when reliance is placed upon provisions of the
Constitution. Thus Van Dijkhorst J held in
Prokureursorde van
Transvaal v Kleynhans
1995 (1) SA 839
(T) at 849A-B:
“
Dit
is myns insiens vir die behoorlike ordening van die praktyk absoluut
noodsaaklik dat konstitusionele punte nie deur advokate
as laaste
debatspunt uit die mou geskud word nie maar pertinent in die stukke
as geskilpunte geopper word sodat dit volledig uitgepluis
kan word
deur die partye ten einde die Hof in staat te stel om dit behoorlik
te bereg.”
(See also
Everfresh
Market Virginia (Pty) Ltd v Shoprite Checkers (Pty) Ltd
2012
(1) SA 256
(CC).)
[28] In all the
circumstances I do not think that it is open to the applicant in
argument to raise this constitutional issue which
is dependent upon
considerations of public policy without having afforded the
respondents the opportunity to deal in their affidavits
with this
aspect, in particular their alleged bad faith.
[29] In the
circumstances the attack upon the validity of the loan agreement must
also fail.
Cancellation of
Management Agreement
[30] The applicant
seeks a declarator that the management agreement with the first
respondent is deemed to be cancelled with effect
31 March 2011. In
argument before me in support of this contention Mr
Abrahams
does not place reliance on any of the factual averments
in the papers. It is again an argument founded on facts not canvassed
in
the papers. The attack is upon clause 19.3 of the loan agreement
which is set out earlier herein. It is common cause that the
applicant
has not settled its entire indebtedness to the second
respondent, however, it is argued that clause 19.3 is not valid in
law.
[31] The loan agreement
with the second respondent provides that the first respondent shall
be the managing agent for the applicant
as contemplated in rule 46(1)
of Annexure A to the Regulations promulgated in terms of the
Sectional Titles Act, 95 of 1986
. Mr
Abrahams
contends in argument that paragraph 19.3.1 of the loan
agreement, which is set out above, is an unlawful clause in terms of
section 90(2)(a)(ii)
of the
National Credit Act 34 of 2005
in that it
deceived the trustees of the applicant body into believing that they
could terminate the services of the first respondent
in terms of
Rule
46(2)(a)
of Annexure 8 to the Regulations promulgated in terms of the
Sectional Titles Act 95 of 1986
.
[32] This argument too
is struck by the same difficulty as the constitutional argument.
There is no reference at all in the papers
to
section 90
of the
National Credit Act. There
is no allegation that the clause is
unlawful nor is there an averment of deceit.
[33]
Section
90(2)(a)(ii)
of the
National Credit Act, which
Act does find
application to the loan agreement, provides that a provision in a
credit agreement is unlawful if the general purpose
or effect is to
deceive the consumer. This is not a purely legal argument. The
respondents have not been afforded the opportunity
to respond to the
allegation relating to the purpose or the effect of the term nor to
the alleged deceit. In the circumstances
section 90
of the
National
Credit Act does
not arise in the present matter and no other argument
is advanced why the provisions of clause 19 of the loan agreement
should
not be honoured.
Interdict
[34] The applicant
seeks an interdict in terms of para 2.4 of the Notice of Motion. To
obtain an interdict the applicant is required
too make out a right on
the papers.
[35] On behalf of the
applicant it is argued that the first respondent has instituted legal
action against several of the applicant
body’s members on the
basis that they are levy defaulters. This is borne out by the papers.
Mr
Abrahams
argues, however, that there are clear
indications of doubt about whether those members are in actual fact
in default.
[36] In this regard the
deponent on behalf of the applicant, in its founding affidavits,
states as follows:
“
There is
every indication that the statements of account for the members of
the Applicant body is in disarray. In some instances
payments made to
the First Respondent was not reflected on the owners’ accounts,
resulting in interest being charged on account
that were fully
paid-up. In other instances paid-up owners were handed over to the
First Respondent’s attorneys for recovery
of arrear levies.”
These averments are
denied by the respondents.
[37] The facts which
are required to be alleged in the founding papers in application
proceedings must be primary facts not merely
secondary facts. Primary
facts are those capable of being used for drawing of inferences as to
the existence or non-existence of
other facts. Secondary facts, in
the absence of primary facts on which they are based, are nothing
more than the deponents own
conclusions. (See
Harms:
Civil Procedure in the Supreme Court; Commentary on the Uniform
Rules
p. B-47: and
Die Dros (Pty) Ltd and Another v Telefon
Beverages CC and Others
(2003) 1 All SA 164
(C) para [28].)
[38] There is no
reference in the founding papers to any individual instance where
payments made to the first respondent were not
reflected on the
owners’ accounts. There is not a single instance referred to in
the papers where interest was being charged
on accounts that were
fully paid up. In respect of the alleged hand over of members to the
first respondent’s attorneys reference
is made to the matter of
one Le Grange of Unit 68 within the scheme. In respect of Mr Le
Grange Jaggers states as follows:
“
It is not
clear what the amount of the arrear levies for this member was. The
member claims to have paid this arrear amount, yet
the First
Respondent’s attorneys continued with legal action which
resulted in default judgment as well as a warrant of execution
against the unit.”
[39] On behalf of the
respondents these allegations too are denied. Mr Le Grange did not
make an affidavit.
[40] It follows that in
my view these averments on behalf of the applicant do not assist.
They are no more than the conclusions
of Mr Jaggers himself.
[41] Even if I were to
accept all these allegations I do not think that it can justify the
relief sought. Where the first respondent
contends that it has a
valid claim against any of the members of the applicant he is
entitled in law to ask a court to adjudicate
upon his case. Section
34 of the Constitution provides that:
“
Everyone
has the right to have any dispute that can be resolved by the
application of law decided in a fair public hearing before
a court
or, where appropriate, another independent or impartial tribunal or
forum.”
[42] It is that forum
where the summons is ultimately issed which will determine whether or
not there is merit in the claim. I do
not think that the applicant
can establish a clear right to prevent either of the respondents from
instituting action in terms
of their contract against any defaulting
member. Such defaulting member is entitled to raise any dispute which
it may have and
to require of the respondents to prove their case in
the proper forum.
[43] Mr
Abrahams
,
however, seeks to bolster his argument in respect of the relief
sought in paragraph 2.4 of the Notice of Motion with reference
to
section 26 of the Constitution. He argues that members who face legal
action may have their property sold in execution. These
properties,
so he submits, are their homes and accordingly they stand to suffer
major prejudice.
[44] Again, section 26
of the Constitution has not been raised in the papers at all. In any
event, it seems to me that the applicant
is in this respect too
placing the cart before the horse. Questions of execution against
residential property arise only where
judgment has being granted. It
too is a matter for consideration of the court hearing an application
to declare the property executable.
If any property owner disputes
the claim for execution or raises relevant circumstances which
militate against an order for execution
then it is a matter for the
court hearing the application to determine.
[45] In all the
circumstances I do think that the applicant’s have made a case
for the relief which they seek and the application
accordingly falls
to be dismissed.
Costs
[46] Mr
Scott
,
who appears on behalf of the respondents, has urged me to make a
punitive costs order against the applicant’s in this matter.
He
has referred to the manner in which the application was launched, as
a matter of urgency, without any reference in the papers
to a basis
for urgency. He relies too on the fact that a rule
nisi
and an
interim interdict was sought and obtained
ex parte
, which rule
was discharged at the second appearance. Mr
Scott
argues that there is clearly no merit in the application and that it
should never have been brought at all.
[47] That may be so,
however, to grant a punitive costs order in this matter would strike
merely at the individual members of Allan
Hendricks who would in the
final analysis be required to pay for the errors of their trustees.
There is nothing in the papers to
show that they were aware of the
manner in which this application was conducted or that they bear any
blame in that regard. In
the exercise of my discretion I do not think
that this is an appropriate matter to grant a punitive costs order.
[48] In the result I
make the following order:
The application is
dismissed.
The applicant is
ordered to pay respondents’ costs of the application.
________________________
J W EKSTEEN
JUDGE OF THE HIGH
COURT
Appearances
:
For Applicant: Mr
Abrahams
instructed by Nash van Dayar Attorneys,
Port Elizabeth
For Respondents: Adv
P
Scott SC
instructed by Pierre Kitching Attorneys,
Port Elizabeth