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[2019] ZAECPEHC 42
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Mooville (Pty) Ltd and Another v Land and Agricultural Bank of South Africa and Others (2667/17) [2019] ZAECPEHC 42 (9 July 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH
CASE
NO: 2667/17
REPORTABLE
In
the matter between:
MOOVILLE
(PTY)
LTD
1
ST
Applicant
WILLEM
JANSEN VAN
VUUREN
2
ND
Applicant
And
LAND
AND AGRICULTURAL BANK OF SOUTH
1
st
Respondent
AFRICA
(1
ST
Applicant in the
main application)
CPAD
FARM
HOLDINGS
2
ND
Respondent
(1
st
Respondent in the
main application)
MR
MONGESI ALFRED
MDE
3
RD
Respondent
(2
ND
Respondent in the
main application)
THE
NATIONAL DIRECTOR
PUBLIC
4
TH
Respondent
PROSECUTIONS
(Third Respondent in the
main application)
THE
MINISTER OF RURAL DEVELOPMENT
5
TH
Respondent
AND
LAND
REFORM
(4
TH
Respondent in the
main application)
MIKE
TIMKOE TRUSTEES
CC
6
TH
Respondent
(5
TH
Respondent in the
main application)
DONALD
GEORGE DUKE JACKSON
7
TH
Respondent
(6
th
Respondent in the
main application)
THE
MASTER OF THE HIGH
COURT
8
TH
Respondent
(7
TH
Respondent in the
main application)
REGISTRAR
OF DEEDS CAPE TOWN
9
TH
Respondent
(8
TH
Respondent in the
main application)
JUDGMENT
VAN
ZYL DJP:
[1]
This is an interlocutory application wherein a company known as
Mooville (Pty) Ltd
and a Mr W J van Vuuren (the applicants) are
seeking leave to intervene in, and be joined as applicants in
application proceedings
(the main application) instituted by the Land
and Agricultural Bank of South Africa (the Bank) for,
inter alia,
the variation of a forfeiture order granted by this Court in terms of
the provisions of section 53(1)(a) of the Prevention of Organised
Crime Act 121 of 1998 (POCA). The application to intervene is
opposed by the fourth respondent in the main application, namely
the
Minister of Rural Development and Land Reform (the Minister).
The basis of the opposition is that the applicants do not
have a
direct and substantial interest in the subject matter of the dispute
raised in the main application.
[2]
The forfeiture order that is the subject matter of the main
application relates to
three farms located in the Humansdorp area. In
the forfeiture proceedings the farms were collectively referred to as
Honeyville
Farm (the properties). A company known as CPAD Farm
Holdings (Pty) Ltd (the company), is the registered owner of the
properties.
The Bank held a mortgage bond over the properties
as security for monies lend and advanced to the company. When
the company
failed to honour the terms of the loan agreement the Bank
obtained a judgment in its favour, pursuant to which a warrant of
execution
was issued, and the properties were attached by the Sheriff
of the Court.
[3]
Subsequent to the attachment of the properties, the Director of
Public Prosecutions
(the DPP) applied for, and was granted a
preservation order in terms of POCA in respect of the properties.
The order
prohibited anyone from dealing with the properties
pending the determination of an application to declare the properties
forfeit
to the State. It further provided for the appointment
of a
Curator bonis
(the Curator), and directed that “
any
person who has an interest in the property and who intends opposing
the application for an order forfeiting the property to
the State or
applying for an order excluding his or her interest from a forfeiture
order in respect of the property, must enter
an appearance giving
notice of his or her intention in terms of section 39(3) of POCA”.
The Curator is cited in the main application as the fifth respondent.
[4]
The Bank instructed their attorneys to protect its interests.
The DPP and the
State Attorney acting on its behalf, informed the
Bank’s attorney that it would not be necessary for the Bank to
enter an
appearance in the forfeiture application, and that the order
declaring the properties forfeit to the State would exclude the
Bank’s
secured interest in the properties arising from the
mortgage bond. However, when the order was granted, and to the
Bank’s
surprise, that did not happen. Instead, the
forfeiture order simply provided that the appointed Curator “
shall
cause the property to be handed back to the Department of Rural
Development and Land Reform for re-allocation in terms of
all
applicable procedures, and as such to sign all necessary documents in
regard thereto. This will be regarded as payment
to the State.”
[5]
When the Bank raised its concerns about the wording of the order it
was given the
assurance by the State Attorney in writing that the
forfeiture order “
did not purport to
refer to any other pre-existing rights, which are were recognised
throughout,”
and that should “
your
client have any qualms about the above exposition … we will
not oppose an amended order spelling out the above …”.
The Curator, appointed to administer the properties, subsequently
received an offer to purchase the properties from the applicants
in
the application to intervene. The Bank agreed to the sale of
the properties on the basis that the full proceeds of the
sale would
be paid to it as a secured creditor of the company. The Bank
further stated in correspondence to the Curator that
it would require
a variation of the forfeiture order to provide for the transfer of
the properties to a third party, and for the
proceeds of the sale to
be paid to the Bank.
[6]
On 25 May 2015 the Curator entered into a written deed of sale in
terms whereof the
properties were sold to the applicants. The
purchase price was R8 000 000 (eight million rand) payable
in cash
against registration of transfer. The Curator is
recorded as being the seller in his capacity as “
Curator
Bonis
” of CPAD Farm Holdings …
appointed in terms of Order of Court in Case no: 3627/04”.
The purchaser was the second applicant acting
on behalf of a company to be incorporated. (the second
applicant).
[7]
When the Bank failed to receive any firm assurances from the DPP and
the Minister
with regard to the payment to it of the full proceeds of
the sale of the properties, it proceeded to launch the main
application
in August 2017. It seeks the following relief:
(a) a variation of the forfeiture order to make the forfeiture of the
properties to the State subject to the rights of the bond holders,
and (b) “
That it be declared that the
Fifth Respondent is entitled to proceed with the sale of the property
described herein before subject
to the rights of the bond holders.”
[8]
It is only the Minister that is opposing the application and the
relief sought.
His/her opposition is essentially twofold:
That the officials of the DPP and the office of the State Attorney
were not authorised
to act on behalf of the Department of Rural
Development and Land Reform (the Respondent) when they gave
undertakings with regard
to the rights of the Bank arising from the
mortgage bond, and that the proceeds of the sale should be shared by
the Bank and the
Department who were both “
victims”
of the fraud which the forfeiture order was intended to address.
Such an order is, it was contended, is consistent with intention
of
the Act, namely to “
protect the
interests of the innocent third parties who have become the victims
of a fraudulent activity.”
[9]
The application to intervene is framed in terms of Rule 12 of the
Court Rules.
It provides that “
Any
person entitled to join as a plaintiff or liable to be joined as a
defendant in any action may, on notice to all parties, at
any stage
of the proceedings apply for leave to intervene as a plaintiff or a
defendant. The court may upon such application
make such order,
including any order as to costs, and give such directions as to
further procedure in the action as to it may seem
meet.”
[10]
The provisions of Rule 12 are made applicable to all proceedings by
way of application by Court
Rule 6(14). The question is whether
the applicants are “
entitled”
to intervene as parties in the main application. An applicant
for intervention is entitled to intervene in pending legal
proceedings if he or she has a direct and substantial interest in the
proceedings concerned, has
prima facie
proof
of his or her interest, and the application is made seriously, and is
not frivolous. (
SA Riding for the
Disabled Association v Regional Land Claims Commissioner and Others
2017 (5) SA 1
(CC) at paras [9] to [11];
Minister
of Local Government and Land Tenure v Sizwe Development
1991 (1) SA
677
(Tk) at 678J-679A; Ex Parte Sudurhavid (Pty) Ltd: In
re Namibia Marine Resources (Pty) Ltd v Ferina (Pty) Ltd
1993 (2) SA
737
(Nm) at 742A-J; Nelson Mandela Metropolitan Municipality v
Greyvenouw CC
2004 (2) SA 81
(SE) at 89A-C; National Director
of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) at para
[85]
;
Investec Bank Ltd v Mutemeri
2010 (1) SA 265
(SCA) at para [38] and
United Watch & Diamond Co v Disa Hotels
1972
(4) SA (C) at 415 C-H. See also
van
Loggerenberg Erasmus Superior Court Practice
2
nd
ed at D1-137 to D1-139
.)
[11]
The interest of the applicant for intervention in the proceedings
must be a legal interest in
the subject matter of that proceedings,
which may be prejudicially affected by the Court’s judgment.
It is a direct
and substantial interest “
in
the issues involved and the order which the Court might make.”
(
United Watch &
Diamond Co v Disa Hotels supra
at 415 F.
See also
National Director of Public
Prosecutions v Zuma supra
at para [85].) In
Gordon v Department of Health, Kwazulu Natal
[2008] ZASCA 99
;
2008 (6) SA 522
(SCA) in para [9] the Court lucidly explained it as
follows:
“
The test is
whether a party that is alleged to be a necessary party, has a legal
interest in the subject-matter, which may be affected
prejudicially
by the judgment of the court in the proceedings concerned. In
the
Amalgamated engineering Union
case (
supra)
it was found that: ‘the question of joinder should …
not depend on the nature of the subject-matter …
but …
on the manner in which, and the extent to which, the court’s
order may affect the interests of third parties.
The court
formulated the approach as, first, to consider whether the third
party would have
locus standi
to
claim relief concerning the same subject-matter, and then to examine
whether a situation could arise in which, because the third
party had
not been joined, any order the court might make would not be
res
judicata
against him, entitling him to
approach the courts again concerning the same subject-matter and
possibly obtain an order irreconcilable
with the order made in the
first instance. This has been found to mean that if the order
or ‘judgment sought cannot
be sustained and carried into effect
without necessarily prejudicing the interests’ of a party or
parties not joined in the
proceedings, then that party of parties
have a legal interest in the matter and must be joined.”
(Quoted
with approved in
Investec Bank Ltd v Mutemeri
2010 (1) SA 265
(SCA) at para [38].)
[12]
If the applicant in the intervention application has a right that is
adversely affected, or likely
to be affected by the order sought in
the main application, permission to intervene must be granted.
“
If the applicant shows that it has some
right which is affected by the order issued, permission to intervene
must be granted.
For it is a basic principle of our law that no
order should be granted against a party without affording such party
a predecision
hearing. This is so fundamental that an order is
generally taken to be binding only on parties to the litigation.”
(Jafta J in
SA Riding
for the Disabled Association v Regional Land Claims Commissioner and
Others
supra
at paras [9] to [11]. See also
Nelson
Mandela Metropolitan Municipality v Greyvenouw
supra
at para [9].)
[13]
In argument counsel for the applicants submitted, with reliance on
the decision of the Supreme
Court of Appeal in
Smyth
v Investec Bank Ltd
2018 (1) SA 494
(SCA),
that leave to intervene may also be granted on the basis of
convenience. In that matter the Court made reference to
the
fact that the authors of
Herbstein & Van
Winsen - The Civil Practice of the High Courts of South Africa
vol 1 5
th
ed at
page 225 to 226 state that joinder is competent
either on the basis of convenience, or on the basis that
the party
whose joinder is in question has a direct and substantial interest in
the subject matter of the action. The Court
in Smyth v Investec
Bank Ltd
supra
did not
comment on the correctness of that statement. Instead it
proceeded to determine the issue raised on the basis that
the
appellants in the matter on the facts lacked a legal interest in the
subject matter of the litigation. (at para [55].)
[14]
The view point expressed by the learned authors of Herbstein &
Van Wisen is not without merit.
It gives recognition to the
interplay and the close link between joinder of parties. (
United
Watch & Diamond Co v Disa Hotels
supra
at 415 C). It is also consistent with the notion that in the
context of joinder or intervention, the Court Rules have not
abolished the common law principles, and that if a matter cannot be
resolved by recourse to the rules, resort can be made to the
common
law. (
Ex Parte Sudurharid (Pty) Ltd:
In re
Namibian Marine Resources (Pty) Ltd v
Ferina (Pty) Ltd
1993 (2) SA 737
(Nm) at 742
E-F and Rabinowitz and Another NNO v Ned-Equity Insurance Co Ltd
1980
(3) SA 415
(W)). It addresses the anomaly that if the Court has
a discretion to grant leave to intervene as some authors contend,
that
discretion would not exist if the party seeking leave to
intervene is required, as in the case of joinder or of right, to show
that he has a direct and substantial interest in the subject matter
of the case. (See Harms Civil Procedure in the Superior
Courts
at page B - 112(5) and
SA Riding
for the Disabled Association v Regional Land Claims Commissioner and
Others supra
at [11].) It
further gives recognition to the view that a distinction should be
made between necessary or obligatory
joinder on the one hand, and an
entitlement to be joined for other reasons, such as on the grounds of
convenience, on the other,
and that different considerations or
principles find application in each instance. In the former,
the question is whether
the order of the Court may affect the
interests of third parties, while the latter focuses upon the nature
of the subject matter
of the dispute.
[15]
However, it is the aforementioned distinction that may lend support
to the viewpoint that Rule
12 is solely concerned with the
intervention of persons whose interests may be prejudicially affected
by the order of the Court
in existing proceedings, while Rule 10 on
the contrary, is concerned with the essential features of the
plaintiff’s right
of action and the similarity of the issues
raised therein in the context of avoiding a multiplicity of actions,
and where considerations
such as convenience or the saving of costs
may become relevant. (
Van Loggerenberg
op cit
at page D1-139 footnote 5) In
terms of Rule 10 any number of persons may join as plaintiffs or
defendants in one action, provided
that the right to relief of the
proposed plaintiffs, or the question arising between the defendants
and the plaintiff, depends
upon a determination of substantially the
same question of law or fact. However, any uncertainty that may
have existed, appears
to have been cleared up by the decision of the
Constitutional Court in
SA Riding for the
Disabled Association v Regional Land Claims Commissioner and Others
supra
, and consequently that the test of a
direct and substantial interest in the subject matter of the case, is
the only and the decisive
criterion. “
It
is now settled that an applicant for intervention must meet the
direct and substantial interest test in order to succeed.”
(para [9].) I do not find it necessary to express any further
views on this aspect. The reason is that the present
matter can
be decided without any reference to considerations of convenience.
[16]
Turning then to apply the principles of intervention to the present
matter, the aim of the applicants
in the intervention application is
clearly to protect their interest in the enforcement of their rights
arising from the deed of
sale. The Bank’s interest is
twofold, namely to protect its rights as mortgagee, and to receive
payment of the proceeds
of the sale of the properties. To
achieve this the Bank not only ask that its rights as mortgagee be
given recognition in
the forfeiture order, but also that the Curator
must be declared to be entitled to proceed with the sale of the
properties.
In his or her answering affidavit the Minister did
not pertinently deal with the “
entitlement”
of the Curator to proceed with the sale of the properties, save to
state that an objection was raised to the sale, and that during
the
relevant time period dealt with by the Bank in its papers, the
Department had not yet made a decision with regard to its position
and its rights in terms of the forfeiture order. However, in
the application to intervene, the Minister has now clarified
matters,
and the issue relating to the authority of the Curator was
pertinently raised by the Minister by placing the authority
of the
Curator to sell and give transfer of the properties in dispute.
The contention was that it could only take place with
the approval of
the Minister, and that the Curator did not receive such approval.
[17]
The declaratory order that the Bank seeks in the main application
raises the authority of the
Curator as an issue. It requires
the Court to make a determination with regard to his authority to
proceed with the sale
of the property. The determination of
this issue is likely to effect the rights of the applicants in terms
of the deed of
sale in the manner as envisaged in
Gordon
v Department of Health Kwazulu-Natal supra
at
para [9]. In argument it was submitted on behalf of the
Minister that the deed of sale has no legal validity, and that
the
applicants have consequently failed to establish a legal right that
will be adversely affected, or is likely to be affected
by the order
sought. For this submission reliance was placed on the absence
in the forfeiture order of such authority, the
Curator’s
confirmation that he had no authority, and that the deed of sale does
not comply with
section 2(1)
of the
Alienation of Land Act 68 of
1981
.
Section 2(1)
provides that a “
deed
of alienation”
in respect of land must
be signed by the parties thereto “
or by
their agent acting on their written authority.”
[18]
It is not necessary to consider the validity of the deed of sale in
these proceedings.
The reason is simply that in an intervention
application the applicant is required to provide nothing more than
prima facie
proof of
his or her interest and the right to intervene, and need not go
further to also show a prospect of success, or satisfy
the Court that
he or she will be successful in the main proceedings (
SA
Riding for the Disabled Association v Regional Land Claims
Commissioner and Others supra
at para [9].)
It is sufficient for an applicant to rely on allegations which, if
they can be proved in the main proceedings,
would entitle him or her
to succeed. In
Nelson Mandela
Metropolitan Municipality v Greyvenouw CC supra
at para [8] – [9] the Court stated the position as follows:
“
[8]
In my view, the denial of unlawful conduct on the part of the
respondents is no bar to the application to intervene.
In much
the same way as the issue of standing is a preliminary issue in which
the merits are assumed in favour of the applicant,
in an application
to intervene the question is whether, on the applicant’s
version, he or she is, in the words of
Rule 12
, ‘entitled to
join as a plaintiff”.
[9]
In order to satisfy this requirement, an applicant must furnish
prima
facie
proof of his or her interest
(and hence his or her right to intervene) but he or she need not go
further to satisfy the Court that
he or she will succeed in the end
of the day…”
(See
also
Ex parte Moosa:
In re
Hassim v Harrop-Allin
1974 (4) SA 412
(T) at 416F; M
inister of
Local Government and Land Tenure v Sizwe Development
1991 (1) SA 677
(Tk) at 678J-679A;
Ex
parte Sudurhavid (Pty) Ltd
: In re
Namibia Marine Resources (Pty) Ltd v Ferina
(Pty) Ltd
supra
at
742G-H; Harms
op cit
at page B-112(5), and
Van Loggerenberg op cit
at page D1-140).
[19]
To conclude, the applicants have a legal interest in the
properties. Their interest
prima
facie
arises from the deed of sale. The
relief claimed by the Bank requires a determination of the authority
of the Curator who
was the seller of the properties in the deed of
sale. A decision with regard to his authority to proceed with
the sale, where
that authority was placed in issue, is likely to
adversely affect the validity of the sale, and consequently the
applicants’
rights arising therefrom. I am accordingly
satisfied that they have a direct and substantial interest in the
outcome of the
main application, and the order which the Court might
make, and that the application for intervention is not frivolous, or
not
made seriously.
[20]
In the circumstances I am of the view that the applicants are
entitled to succeed in the application
for intervention.
[21]
There is one final matter. In addition to seeking leave to
intervene in the main application,
the applicants asked for an
amendment of the relief claimed by the Bank in its notice of motion.
The suggested amendment
was to the effect that the Curator be
declared to be entitled to proceed with the sale, with specific
reference to the deed of
sale entered into between the applicants and
the Curator on 25 May 2015. The proposed amendment does not in
my view advance
the matter. Should the court hearing the main
application find that the Curator did have authority to deal with the
properties
at the relevant time, the order in its present form will
adequately protect the applicants interests. In the event if a
finding
that the Curator acted without authority at the time, the
suggested amendment will not assist the applicants, and they may have
to seek alternative relief in order to give validity to the deed of
sale. It is always open to the applicants, if so advised,
to in
due course seek an appropriate amendment of the notice of motion in
the main application in terms of the Court Rules.
[22]
For these reasons I accordingly make the following order:
(a)
The applicants for intervention are granted leave to intervene as
second and third applicants
respectively in the main application
under case number 2667/2017.
(b)
The applicants shall deliver any further affidavit(s) required to
stand as their founding
affidavit(s) in the main application within
fifteen days of the date of this order.
(c)
The costs occasioned by the opposition to the application to
intervene shall be paid
by the fifth respondent (the Minister of
Rural Development and Land Reform).
__________________
D
VAN ZYL
DEPUTY
JUDGE PRESIDENT
Counsel
for the Applicants:
Adv R G Buchanan SC
Counsel
for the Respondents: Adv T
Zietsman
Date
Heard:
30 May 2019
Judgment
Delivered:
9 July 2019