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[2024] ZAECQBHC 11
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Anderson and Another v Standard Bank of SA Limited and Others (986/2019) [2024] ZAECQBHC 11 (13 February 2024)
FLYNOTES:
PROPERTY – Restitution –
Sale
induced by fraud
–
Owners
sought loan and signed documents – Unwittingly selling home
and later having to vacate – Seeking vindicatory
relief –
Whilst applicants may have been negligent in signing
documentation, alternatively, naive, they were clearly
misled as
to nature of transactions – Caveat subscriptor of no
application in face of fraud – Vindicatory action
cannot be
equated to “debt” for prescription – Deed of
sale declared null and void – Declared that
applicants are
owners of the immovable property and entitled to restitution.
SAFLII Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION, GQEBERHA)
Case
No. 986/2019
In
the matter between:-
BENITA
ANDERSON
First
Applicant
CLAUDE
GRAHAM ANDERSON
Second
Applicant
and
THE
STANDARD BANK OF SA LIMITED
First
Respondent
SOUTHERN
SPIRIT PROPERTY 131 (PTY) LIMITED
Second
Respondent
DON
FRASER
Third
Respondent
JOHAN
NEL
Fourth
Respondent
TRACEY
BERYD NEL
Fifth
Respondent
REGISTRAR
OF DEEDS KINGWILLIAM’S TOWN
Sixth
Respondent
JUDGMENT
BANDS
J:
[1]
At the centre of this
dispute is a fraudulent reverse-mortgage scheme devised and
implemented by the now deregistered company, Asset
Management
Specialists (Pty) Ltd (“
AMS
”
),
to which approximately 150 financially distressed individuals fell
victim, resulting in the loss of their homes; the very thing
that
they sought to protect against when approaching AMS for financial
assistance. Unsurprisingly, this is not the first
time that the
AMS scheme has come under fire, having previously received judicial
attention in numerous matters, most notably by
the then Eastern Cape
Division of the High Court, Grahamstown,
[1]
in
Tshatshu
and Another v Standard Bank of SA Limited and Others
,
to which I return.
[2]
[2]
The applicants, who
contend to have been deceived by AMS, seek vindicatory relief,
[3]
which is evidenced by their request for restitution in respect of erf
2[…], Westering, Gqeberha, more commonly referred
to as 1[…]
L[…] C[…], Westering, Gqeberha (“
the
immovable property
”
).
[3]
The application is
opposed by the fourth and fifth respondents (“
the
respondents
”
)
who are the current registered owners of the property.
Primarily, the respondents argue that the applicants, at all material
times, had the requisite intention to dispose of the immovable
property and accordingly they were not defrauded.
Alternatively,
they contend that in the event of a finding that the
applicants were the victims of fraud; their claim for return of the
immovable
property has prescribed. Whilst the respondents
initially adopted the attitude that the application was not
vindicatory in
nature,
[4]
this
contention was, correctly so, not persisted with when the matter came
before me for argument. It was accepted by both
counsel
appearing in the matter that the factual findings relating to the
mechanism and nature of the scheme, as per the judgment
of Revelas J
in
Tshatshu
,
in the absence of an appeal of that decision and any evidence to the
contrary, stand.
The
AMS scheme
[4]
In short, AMS approached the general public by way of
advertising,
offering distressed property owners what they believed to be a
solution to their cash flow problems. This solution
took the
form of what AMS referred to as their “product”, which
provided would-be clients (“
the client
”) seeking
to raise finance, but unable to do so due to having been blacklisted
with the credit bureau, an answer to their
quandary by obtaining a
loan on their behalf at a preferential interest rate, through an AMS
shelf company. A mortgage bond
would be registered over the
immovable property to serve as security for the loan. To
participate in the scheme and qualify
for the AMS’ product, the
client had to be the owner of immovable property with sufficient
equity.
[5]
The mechanism through which the scheme operated is described
in
detail in
Tshatshu.
For the purposes of this judgment,
is suffices to set out as follows. The client’s immovable
property would be
sold and transferred to an AMS shelf company (in
this instance, the second respondent), specifically incorporated for
this purpose.
The client was at all times led to believe
that the immovable property would simply be transferred to the shelf
company,
in which it would “
rest
” (in other words,
in which it would be held) on behalf of the client.
[6]
AMS raised the finance by utilising creditworthy individuals,
with
proven income and clean credit records, as guarantors to provide
security in the form of suretyships in favour of the relevant
banking
institution (“
the creditor
”) on behalf of the
shelf companies. The guarantor, in return for participating in
the scheme, would receive a fee equal
to 5% of the amount raised by
the mortgage bond. This was but one of many costs for which the
client would become liable,
under the scheme.
[7]
An example of the additional costs, all of which are
included in the
total loan amount (together with the guarantor’s fee), appears
from the final reconciliation account addressed
to the second
applicant by AMS, which includes: (i) payment of the amount owing to
the banking institution in order to discharge
the existing home loan;
(ii) payment to the client of the monies as and for the “loan”;
(iii) all transaction costs
associated with the transfer and
registration of the immovable property from the client to the shelf
company; (iv) commission to
AMS equal to 7.5% of the total finance
raised; and (v) other ancillary costs and fees. In the
present matter, the cumulative
cost of the transaction was
R785,000.00.
[8]
The client would be required to enter into a written
agreement of
lease with the shelf company in respect of the immovable property.
In terms thereof, the client would be liable
for the payment of
monthly rental at a rate equal to the bond repayments for which the
shelf company was liable to the bank, which
amount, given the above
fees, was invariably much higher than the client’s initial bond
repayment prior to becoming embroiled
in the scheme.
[9]
Revelas J, in
Tshatshu
, highlighting the fraudulent and
pernicious character of the scheme, utilised the following example:
“
An individual
who had been servicing a bond of for instance R857,061.00, would,
once he or she has signed up with AMS, end up servicing
a bond of R3
million in lease payments to a shelf company
.”
[10]
How this could be, is
immediately apparent
ex
facie
the
final reconciliation statement addressed to the applicants in
casu
.
The applicants, prior to contracting with AMS were liable for
R131,548.01 under their existing home loan agreement.
Following
their engagement with AMS, and in order to finance a loan in the
amount of R100,000.00,
[5]
the
applicants had not only alienated their property, valued at
R785,000.00, for an effective price of R231,548.01 (R131,548.01
to
settle their existing home loan and R100,000.00 being the funds
“advanced” to the applicants in terms of the loan
with
AMS) but became liable for the payment of monthly rental to reside in
the property equal to the repayments due in terms of
a significantly
higher home loan, in the amount of R785,000.00.
[11]
Even more disturbing is that the client, effectively having financed
the above
and who is now, in law, no more than the lessee of the
immovable property sold to the shelf company, enters into an option
agreement
with the shelf company. In terms of this latter
agreement, the client is granted an option to repurchase the
immovable property
from the shelf company, against payment of the
same price that the applicant sold the immovable property for, to the
shelf company.
The
facts of the present dispute
[12]
The applicants purchased the immovable property during 1992 for an
amount of
R138,000.00 and the property was registered in both of
their names. A mortgage bond securing their home loan was
registered
over the immovable property in favour of ABSA bank.
Some thirteen years later, during May 2005, the second applicant
noticed
an advert in the local newspaper, the Herald, offering loans
to the public. The applicants sought to effect certain
renovations
to their home but were unable to approach other
mainstream financial institutions for finance as they were
experiencing financial
difficulties.
[13]
This being so, they responded to the advert and were invited to meet
with AMS
agents, Wilma and Ben Breytenbach (“
the
Breytenbach’s
”) at the offices of AMS in Humewood.
Significantly, the Breytenbach’s were the same AMS agents who
featured in
Tshatshu.
I pause to mention that the
respondents, notwithstanding this fact, coupled with the further
factual findings to which Reveals
J arrived regarding the fraudulent
nature of the scheme, advanced no reason why the
modus operandi
of AMS, through their agents, would be any different in respect of
their dealings with the applicants.
[14]
On meeting with the Breytenbach’s, the applicants were advised
that:
(i) they would qualify for a loan of R100,000.00; the immovable
property would be placed in a company for safe-keeping until such
time that the applicants’ loan had been repaid; and (iii) the
repayment structure would be confirmed during a further meeting.
[15]
During the subsequent meeting, the applicants signed the
documentation presented
to them, which they understood to serve as
confirmation of the loan (for which the immovable property would
serve as security)
and for the purposes of placing the immovable
property “
into a company for safe-keeping
”, but
which instead constituted: (i) a deed of sale entered into between
the applicants and the second respondent in respect
of the immovable
property; (ii) an option to purchase the immovable property; (iii) a
notice of cancellation; and (iv) a power
of attorney to pass
transfer. The applicants, much like the applicants in
Tshatshu,
were emphatic that they never realised that by signing the
aforesaid documentation, they were selling their house to the second
respondent. This was never their intention. As set out
above, by entering into the agreements, the applicants alienated
their property to the second respondent for R785,000.00. From
this, the applicants “benefitted” from R231,548.01
as set
out in paragraph [10] above. I use the term benefitted loosely,
as the amounts received were not unencumbered for
the reasons set out
above.
[16]
The R100,000.00 received in respect of the “loan” was
utilised
by the applicants to renovate the immovable property and to
pay off household debt.
[17]
Whilst the applicants were initially liable for payment of an amount
of R4,750.00
per month, under the agreement, this soon escalated to
R7,100.00 per month. All attempts to contact AMS to obtain
reasons
for the increase proved to be unsuccessful.
[18]
During or about late 2006; alternatively, early 2007, the applicants
received
a phone call from one Phillip Taljaard (“
Taljaard
”),
who identified himself as AMS’ attorney. Taljaard advised
the applicants that AMS was the subject of investigation
and that
they should stop making payments to AMS. The applicants acted
in accordance with the advice received. They
attempted to
contact the Breytenbach’s in an endeavour to obtain further
information, however their telephones had been disconnected.
All attempts to contact the AMS Head Office proved fruitless.
The first applicant eventually traced Wilna Breytenbach via
the
Facebook social media platform, who advised her that “
AMS
had deleted all data from the computers and had terminated the phone
lines
”.
[19]
During 2010, the applicants approached attorney, Eugene Raymond
(“
Raymond
”), to investigate the matter and to
establish the position regarding the immovable property. Whilst
Raymond made initial
inquiries regarding the loan, he passed away
shortly thereafter.
[20]
The applicants, acting on
the assumption that they would be contacted by an official from AMS
or an attorney acting on its behalf,
took no further steps for a
period of four years until they were contacted by attorney Claude
Knoesen (“
Knoesen
”
).
[6]
According to the applicants, Knoesen advised them that they owed a
gentleman by the name of Don Fraser, the third respondent
in these
proceedings, money and that they had been living in his home free of
charge for a period of seven years. The applicants
state that
they were shocked and dismayed by what was conveyed to them.
They did not know who Don Fraser was.
[21]
Ultimately, the applicants contend that Knoesen advised them that
they had
no choice but to move out of the immovable property as it no
longer belonged to them. The applicants, under threat of legal
consequences
should they refuse to vacate the immovable property and
believing to be lacking any form of a remedy, reluctantly vacated the
immovable
property.
[22]
Later during 2016, the applicants, having read about
Tshatshu
in the local newspaper, approached the Legal Resources Centre for
legal assistance, which thereafter culminated in the present
application.
It was only at this juncture that the machinations
of the scheme became known to them.
[23]
As foreshadowed above, the respondents argue that the applicants, at
all material
times, had the requisite intention to dispose of the
immovable property. Whilst the respondents concede that they
have no
direct knowledge of: (i) the facts set forth by the
applicants, including their engagement with AMS and the
Breytenbach’s;
and (ii) the fraudulent nature of the scheme
(which they do not deny), they argue that it is inconceivable that a
person such as
the first applicant, who was employed as a personal
assistant to a life insurance broker at Mortgage SA at the time of
contracting
with AMS, would sign all of the documentation and still
be under the impression that they were only applying for a loan and
that
the immovable property was not being sold to the second
respondent. On this basis, it was contended that a real
agreement
between the applicants and the second respondent was
concluded in order to transfer ownership of the immovable property to
the
second respondent, who obtained good title to the property.
This is the very same argument that was raised in
Tshatshu.
[24]
As succinctly set out by Revelas J at paragraph [39] of
Tshatshu
,
with reference to various other decisions pertaining to reverse
mortgage schemes:
“
The
courts, when dealing with these type of matters have generally
adopted the approach that individuals who had been fraudulently
induced to sell their homes, were entitled to vindicatory relief –
the registration of their properties into their names
and declaratory
orders rendering the documents underpinning the impugned transactions
null and void. The applicants
argued that the facts of
their case were on all fours with the facts in the ABSA v
Moore and Quartermark cases. The
applicants
submitted that these two decisions of the Supreme Court of Appeal
enjoin me to grant the relief as set out in their
notice of motion.”
[25]
Lewis JA writing for the
Supreme Court of Appeal in
Absa
Bank Limited v Moore
,
[7]
which dealt with a comparable scheme, commonly referred to as the
Brusson Scheme, summed up the unusual features thereof, which
features Revelas J found to be equally applicable to the AMS scheme.
The summary at paragraph [24] of the judgment reads
as follows:
“
The
unusual features include: the investor does not really intend buying
the property and never takes occupation; the client does
not really
intend selling the property and does not lose occupation; the
investor pays nothing, but applies for a bond over the
property as he
has a good credit rating; the price payable in terms of the
instalment sale agreement accrues not to the investor
but to Brusson;
all payments are made to Brusson; in the event of default by the
clients, Brusson is entitled to take transfer
of the property.”
[26]
The question which needs to be determined is whether the applicants
performed
the alleged legal act knowingly, with the aim of bringing
about the legal consequences it entails. In other words, did
the
applicants intended to transfer the immovable property to the
second respondent, or were they instead induced to sign the
documentation
by way of a fraudulent misrepresentation, believing
that they would retain ownership of the immovable property.
[27]
I cannot agree with the respondents that the applicants knowingly
entered into
the agreements with the necessary intention of selling
the property to the second respondent. I am of the view that
the respondents’
allegations, regarding the applicants’
alleged knowledge (which at best is speculation), in the face of the
applicants’
positive assertions, amounts to no more than a bare
denial and are insufficient to raise a genuine dispute of fact.
[28]
As articulated by
Binns-Ward J in
Absa
Bank Ltd v Erf 1252 Marine Drive (Pty) Ltd and Another
:
[8]
“
the
import of the Plascon-Evans rule is so well established
that it hardly bears stating: it is to the effect that where
there is
a dispute of fact on the papers final relief may be granted in an
application only if it is justified by the averments
in the
affidavits of the applicant which are either admitted or not disputed
by the respondent, together with the facts alleged
by the
respondent.
It
is, however, the qualifications and exceptions to that simple
principle that are sometimes overlooked
…”
[Own emphasis].
[29]
As pointed out by the
learned judge of appeal in
Plascon-Evans
Paints v Van Riebeeck Paints
:
[9]
“
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 (see in this regard Room Hire Co (Pty)
Ltd v Jeppe Street Mansions (Pty) Ltd
1949
(3) SA 1155
(T)
at 1163 - 5; Da Mata v Otto NO
1972
(3) SA 858
(A)
at 882D - H). 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 (cf Petersen v Cuthbert & Co Ltd
1945
AD 420
at
428; Room Hire case supra at 1164) 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
(see eg Rikhoto v East Rand Administration Board and
Another
1983
(4) SA 278
(W)
at 283E - H). Moreover, there may be exceptions to this general rule,
as, for example, where the allegations or denials of the
respondent
are so far-fetched or clearly untenable that the Court is justified
in rejecting them merely on the papers (see the
remarks of Botha AJA
in the Associated South African Bakeries case, supra at
924A).”
[30]
It is inconceivable that any homeowner would sell their immovable
property
worth R785,000.00 for an amount of R231,548.01, the
breakdown of which I have dealt with, and then utilise the monies
left over,
following the settlement of the existing home loan, to
renovate a property which they no longer owned but instead occupied
as a
tenant, all the while paying rental equal to the monthly home
loan instalment, which was far in excess of what they were originally
paying (as owner).
[31]
It further defies logic that the applicants would: (i) in selling
their immovable
property, cover the transfer fees (which are usually
for the account of the purchaser); (ii) forego the majority of the
financial
benefit associated with the sale (which accrued to AMS);
and (iii) agree to the repurchase of the property from the purchaser
for
the full amount of R785,000.00, particularly if regard is had to
the computation of such amount.
[32]
The respondent’s
reliance on the final reconciliation to support their case, does not
assist the respondents.
[10]
That fees were raised in respect of the transfer and registration of
the immovable property, is not inconsistent with the
version of the
applicants that they, at all material times, were led to believe that
the immovable property would be “placed”
in the second
respondent for safekeeping and that the immovable property would
serve as security for the loan.
[33]
Whilst the applicants may have been negligent in signing the
documentation;
alternatively, naïve, they were clearly misled as
to the nature of the transactions, believing them to serve some other
purpose
entirely, as was the case in
Moore
and
Tshatshu
;
the principles enunciated in such decisions, being equally applicable
to the present case. I am accordingly satisfied that
as the
applicants had no genuine intention to transfer ownership of the
immovable property, the purported transfer under the agreements
is
ineffectual to convey valid title to the second respondent, in the
absence of which, the second respondent was unable, in law,
to
transfer ownership in the immovable property to the respondents.
[34]
Applying
Legator
McKenna Inc v Shea
[11]
and
Nedbank
Ltd v Mendelow NNO
[12]
at
para 12:
“
It
is trite that where registration of a transfer of immovable property
is effected pursuant to fraud or a forged document, ownership
of the
property does not pass to the person in whose name the property is
registered after the purported transfer. Our system
of deeds
registration is negative: it does not guarantee the title that
appears in the deeds register. Registration is ‘intended
to
protect the real rights of those persons in whose names such rights
are registered in the Deeds Office’. And
it is a
source of information about those rights. But registration
does not guarantee title, and if it is effected as
a result of a
forged power of attorney or of fraud, then the right apparently
created is no right at all.
”
[35]
The respondents’
reliance on
caveat
subscriptor
is
of no application in the face of fraud and accordingly, such argument
must fail.
[13]
[36]
As stated above, the respondents further argue that in the event of a
finding
that the applicants were the victims of fraud; their claim
for return of the immovable property has prescribed.
[37]
The respondents’
reliance on
Rens
v Standard Bank of South Africa Limited and Others
[14]
to support their argument is misplaced, the law having been settled
by the Supreme Court of Appeal in
Absa
Bank Ltd v Keet
,
to which I am bound
.
[15]
In this respect, the court stated as follows at paragraph [25]:
“…
the
view that the vindicatory action is a ‘debt’ as
contemplated by the
Prescription
Act which
prescribes
after three years is, in my opinion, contrary to the scheme of the
Act. It would, if upheld, undermine the significance
of the
distinction which the
Prescription
Act draws
between
extinctive prescription, on the one hand and acquisitive prescription
on the other. In the case of acquisitive prescription
one has to do
with real rights. In the case of extinctive prescription one has to
do with the relationship between a creditor and
a debtor. The effect
of extinctive prescription is that a right of action vested in the
creditor, which is a corollary of a ‘debt’,
becomes
extinguished simultaneously with that debt.
In
other words, what the creditor loses as a result of operation of
extinctive prescription is his right of action against the debtor,
which is a personal right. The creditor does not lose a right to a
thing. To equate the vindicatory action with a ‘debt’
has
an unintended consequence in that by way of extinctive prescription
the debtor acquires ownership of a creditor’s property
after
three years instead of 30 years that is provided for in
s
1
of
the
Prescription
Act. This
is
an absurdity and not a sensible interpretation of the
Prescription
Act.
”
[38]
In light of the aforesaid and given the vindicatory nature of the
relief sought
by the applicants, the respondents’ argument in
respect of prescription must fail.
[39]
A further legal point
raised by the respondents is that of estoppel. In essence, the
respondents contend that “
[t]he
applicants knew for many years that the property was registered in
someone else’s name. They failed to take any
steps to
rectify the position and in doing so allowed the sale of the property
to us to occur
.”
Without belabouring the point, not only is this an incorrect synopsis
of the facts before me, but a party seeking
to rely on estoppel must
satisfy the requirements set out by the Supreme Court of Appeal in
Aris
Enterprises (Finance) v Protea Assurance
[16]
and thereafter in
Pangbourne
Properties Ltd v Basinview Properties (Pty) Ltd,
[17]
which the respondents, on the facts of the present matter, have
failed to do.
[40]
A further argument raised
on behalf of the respondents was that the applicants have benefitted
from an unmerited windfall in that
prior to their engagement with
AMS, they owed the bank an amount of R131,548.01. Following
their engagement, not only did
the applicants receive an amount of
R100,000.00 in cash as and for the loan, but the bond over the
immovable property was extinguished.
The respondents contend
that it will be an unconscionable outcome should the applicants be
allowed to “
walk
back into a property (on which they previously owed a substantial
sum) bond free
”
.
This argument of course does not take into account the substantial
sums of money paid by the applicants to the second respondent
as and
for “
rental”
to reside in the immovable property. Leaving this aside, and
even if the applicants
will
be better off than prior to the fraud, should I come to the
applicants’ assistance (which is in any event not clear on
the
facts of this matter), the applicants, much like the respondents are
innocent parties. Significantly, the first respondent
bank has
chosen not to oppose the application. The Constitutional Court
in
Absa
Bank Limited v Moore and Another
,
[18]
faced with a similar argument,
albeit
having been raised on
behalf of the bank, stated as follow at paragraphs [56] and [57]:
“
[56]
Beneath these contentions lies the Bank’s complaint that the
Moores received an unmerited windfall
at its expense. It is
true that the Moores are better off now than before the fraud, and
that the Bank, having lost its secured
loan to the Moores, now has
only an unsecured claim against Mr Kabini, who is probably good for
nothing. But the Moores justly
defend that this was not their
fault. Their bond debt to the Bank was discharged because the
Bank decided to take Mr Kabini,
whom it thought now owned the
property, as its debtor in their stead. It was the Bank that
decided to grant a loan to Mr
Kabini. We don’t know what
background checks it did, or could have done, on him. We know
nothing about the conveyancing
attorney whom it employed, and who
accepted all the documents at face value. The discharge of the
Moores’ debt was
not subject to a condition that Mr Kabini
would prove a worthy debtor. And, on the facts before us, there
is no basis to
develop our law so as to impose one.
[57]
In the way things have turned out, on what we have before us, the
outcome is not unjust.
The Bank, which enjoyed the
institutional resources and power to protect itself against the
fraudulent scheme, but didn’t
do so, has to suffer the loss its
loan to Mr Kabini caused to it.”
[41]
In the event that the respondents are held to the terms of their loan
agreement
in respect of the immovable property, for which the bank
would ultimately have lost its security, the respondents are free to
institute
a claim for damages against whichever party they deem to be
responsible for their loss; alternatively, to pursue any other legal
remedy seeking whatever relief they deem appropriate, in the
circumstances of the matter. This falls outside the ambit of
this judgment.
[42]
The argument on behalf of
the respondents that as they are innocent purchasers, the applicants
have no right of recourse against
them for the return of the
property, is without merit. So too is their misplaced reliance
on the decision of
Preller
& Others v Jordaan.
[19]
Preller
is not authority for such
proposition. What the court found was that where a party,
despite the fraudulent conduct, intended
to transfer the title in the
property, even though willingness to do so may have been the result
of undue influence, it constitutes
a valid act, which is not void but
only voidable. In such instance, ownership passes between the
relevant parties and the
property may not be reclaimed by way of the
rei
vindicatio
.
Where however, as in present matter, a party signs a deed of sale,
thinking it to be something else, and accordingly has
no intention to
bring about the legal consequences of a sale, such act has no legal
consequences.
Conclusion
[43]
For all of the above reasons, it follows that the applicants are
entitled to
the relief sought, including the costs of the
application, which ought to follow the event.
[44]
The following order is issued:
1.
The following documents are declared null and void and of no force
and effect and are accordingly set
aside:
1.1
Deed of Sale entered into between the Applicants
and the Second Respondent, dated the 23 July 2007;
1.2
Option to Purchase entered into between the
Applicants and the Second Respondent dated the 16 October 2007;
1.3
Notice of Cancellation entered into between the
Applicants and the Second Respondent dated 16 October 2007;
1.4
Power of Attorney to Pass Transfer dated 6
September 2005.
2.
It is declared that the applicants are the owners of ERF 2[…],
Westering, Gqeberha, also known
as 1[…] L[…] C[…],
Westering, Gqeberha (“
the immovable property
”).
3.
The applicants are entitled to restitution in respect of the
immovable property.
4.
The second and third respondents are ordered to pay the costs of the
transfer of the immovable property
into the name of the applicants.
5.
The fourth and fifth respondents are ordered to pay the costs of the
application.
I
BANDS
JUDGE
OF THE HIGH COURT
Date
heard:
10
August 2023
Date
of judgment:
13
February 2024
For
the applicants:
Mr
Naidu
Instructed
by:
Legal
Aid South Africa
1
Uitenhage Road
North
End
For
the 4
th
and 5
th
respondents:
Adv
Mullins SC
Instructed
by:
Howard
Collen Attorneys
11A
Shirley Street
Newton
Park
Gqeberha
[1]
Now
known as the Eastern Cape Division, Makhanda.
[2]
(1787/2014) [2016] ZAECGHC 43 (6 May 2016).
[3]
The
full relief sought, as set out in the notice of motion is as
follows:
“
1.
That the following agreements purportedly
concluded between the Applicants and the Second and Third
Respondents
are declared to be invalid and unlawful and of no force
and effect:
1.1
Deed of Sale entered into between the
Applicants and the Second Respondent, dated the 23
rd
July 2007;
1.2
Option to Purchase entered into between the
Applicants and the Second Respondent dated the 16th October 2007;
1.3
Notice of Cancellation entered into between
the Applicants and the Second Respondent dated 16th October 2007;
1.4
Power of Attorney to Pass Transfer dated 06th
September 2005.
2.
That the agreements listed in paragraph 1 above are set aside.
3.
It is declared that the Applicants are entitled to restitution of
ERF 2[…], Westering,
Port Elizabeth, also known as 1[…]
L[…] C[…], Westering, Port Elizabeth.
4.
That the Second and Third Respondents be ordered to pay the costs of
the transfer of the property
into the name of the Applicants.
5.
Granting the Applicants leave to supplement their Founding
Affidavit, should the need arise.
6.
That any of the Respondents who oppose this application pays the
costs of the Application.
7.
Further and/or alternative relief.
”
[4]
Which
argument has a bearing on the defence based on prescription.
[5]
Whist the applicants cite a total loan amount of R100,000.00, the
loan amount payable to the applicants as recorded in the statement
is in the cumulative amount of R130,194.52, payable in two separate
instalments of R43,000.00 and R87,194.52 respectively.
[6]
I
am aware of the dispute on the papers pertaining to whom Knoesen was
purportedly representing at the time. In this respect,
the
applicants contend, from their understanding, that Knoesen had been
acting on the instruction of Mr Fraser’s attorney
who was
based in East London, whilst the respondents contend that he was
acting on the instruction of the applicants. No
confirmatory
affidavit was filed on behalf of Knoesen dealing with this aspect.
For the purposes of this judgment, I deem
it unnecessary to resolve
this dispute, which in no way has a bearing on the final outcome of
the matter.
Interestingly
however, even on the respondents’ version, Knoesen, at the
time of his involvement, which was shortly prior
to the applicants
having vacated the immovable property, stated, in respect of such
property, that the applicants “
sort of believe it’s
their house
.”
[7]
2016 (3) SA 97 (SCA).
[8]
(23255/2010)
[2012] ZAWCHC 43
(15 May 2012).
[9]
1984 (3) 623 (AD) at 634I – 635A-C.
[10]
Nor
does the consent to install the pre-paid electricity meter upon
which the respondents rely, which in any event was after the
fact.
[11]
2010
(1) SA 35
(SCA).
[12]
2013
(6) SA 130
(SCA).
[13]
Absa
Bank Limited v Moore
2016
(3) SA 97 (SCA) at paragraph [17].
[14]
(371/14) [2015] ZAECPEHC 14.
[15]
2015
(4) 474 (SCA) at paragraph [25].
[16]
1981
(3) SA 274 (AD).
[17]
(381/10)
[2011] ZASCA 20
(17 March 2011).
[18]
2017 (1) SA 255
(CC).
[19]
1956
(1) SA 483
(AD).