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[2023] ZAFSHC 82
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Maseloa and Another v Nyandu and Others (3835/2022) [2023] ZAFSHC 82 (22 March 2023)
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,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 3835/2022
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
BOTHATELO
PEARL
MASELOA
First Applicant
MOJALEFA
JOSEPH
MASELOA
Second Applicant
And
LUCKY
MATHEWS
NYANDU
First Respondent
MAKHOSAZANE
ELIZABETH NYANDU
Second Respondent
THE
STANDARD BANK OF
SA
Third Respondent
SHERIFF,
BLOEMFONTEIN
WEST
Fourth Respondent
REGISTRAR
OF DEEDS, BLOEMFONTEIN
Fifth Respondent
HEARD
ON:
20 OCTOBER 2022
JUDGMENT
BY:
DANISO, J
DELIVERED
ON:
This
judgment was handed down electronically by circulation to the
parties' representatives by email and by release to SAFLII. The
date
and time for hand-down is deemed to be 11h00 on 22 March 2023.
[1]
The applicants seek an order against the first and the second
respondent (“the
respondents”) for the setting aside of
the sale in execution in which the respondents purchased the
immovable property number
[....] Donegal [....] situate at portion
[....] of plot [....], Donegal Smallholdings in the Bloemfontein
(“the property”)
on 2 June 2021.
[2]
The applicants also seek: the rescission of the order (“the
court order”)
made by Chesiwe, J on 20 August 2021 in terms of
Rule 46A (9)(e) of the Uniform Rules of Court confirming the sale in
execution;
a declaratory order that their offer to purchase the said
property in the amount of R2.1 million from the registered owners Mr
and Mrs Tsomela (‘the judgment debtors”) on 4 May 2021 be
declared valid and binding, an order for the transfer and
the
property into their names and; an interdict prohibiting the transfer
of the property to the respondents.
[3]
The background facts are generally of common cause: The application
arises from the
action instituted by the third respondent (“Standard
Bank”) against the judgment debtors under case number 3791/2019
after they defaulted on the instalments of their mortgage bond held
by Standard bank in respect of the property. Standard Bank
consequently obtained a judgment against the judgment debtors on 6
November 2019 in the amount of R2 279 020.43 together
with
interest and costs. On 16 January 2020, the property was declared
especially executable in terms of rule 46A, a reserve price
was set
at R1 953 955.30. A warrant of execution against the
property was also authorised and subsequently issued by
the Registrar
on 4 February 2020.
[4]
Following the above, the property was provisionally sold by public
auction to the
respondents as the highest bidders in the amount of
R1.4 million. Having considered the Sheriff’s report as
contemplated
in Rule 46A(9)(d)
[1]
Chesiwe, J issued the court order on 20 August 2021 confirming the
provisional sale.
[5]
It is also common cause that transfer of the property has not taken
place.
[6]
The application is premised on the grounds that the court order was
granted erroneously
because, at the time the court made the said
order both the Sheriff and the court were not aware of the
applicants’ offer
to purchase the property at a higher amount
than the reserve price and the amount the property was ultimately
sold in execution
otherwise, the Sheriff would have included this
fact in his report and brought it to the attention of the court. In
turn, the court
would not have granted the order authorising the sale
at the amount of R1.4 million which is evidently to the detriment of
both
Standard Bank and the judgment debtors as it leaves a massive
shortfall of over R700 000.00 which must still be recovered from
the judgment debtors.
[7]
The applicants submit that the whole reason for a reserve price is to
protect the
interests of the bank and judgment debtors that there
should be no shortfall which the bank will have to recoup from the
judgment
debtors accordingly, it would be just and equitable that the
sale in execution be set aside and the court order is rescinded.
[8]
The applicants further state that they have duly complied with their
offer to purchase
in that upon the acceptance of the offer by the
judgment debtors, the applicants have since paid and guaranteed the
full purchase
price therefore, their offer to purchase must be
declared valid and the ownership of the property must be transferred
to the them.
[9]
The respondents oppose the application on the grounds that the
applicants have no
locus standi
to seek the relief in the
notice of motion particularly, an order for the setting aside of the
sale in execution and the rescission
of the court order essentially
as they were not party to the proceedings in which those orders were
granted. The applicants are
not affected by the orders made in those
proceedings therefore they have no direct and substantial legal
interest in the attachment,
sale in execution, or transfer of the
property pursuant to the orders made under case 3791/2019.
[10]
The respondents also contend that the application is bad in law in
that, the facts relied upon
by the applicants as relevant to the
hearing of rule 46A (9(6) only arose after the property was
auctioned. In any event, the judgment
debtors as owners of the
property and also as parties affected by the court order did not
bring those facts before court nor raise
any prejudice. The judgment
debtors are also not joined in these proceedings therefore it cannot
be said that the court order was
granted erroneously.
[11]
With regard to the validity of the offer to purchase, the respondents
aver that the owners could
not have validly concluded a deed of sale
of the property as it was already declared especially executable,
judicially attached
and also sold in execution to satisfy the
judgment without having first obtained the release of the property
from judicial attachment.
The offer to purchase is on that basis
unenforceable and the fifth respondent would not permit the transfer
of the property to
the applicants until the attachment has been
uplifted namely, the judgment debt has been satisfied.
[12]
The respondents further state that the applicants are not entitled to
interfere with or undermine
the respondents’ real rights to the
attached property therefore the relief sought to interdict the
transfer of the property
to the respondents is unsound. Furthermore,
the requirements for a final interdict have also not been made out in
the applicants’
affidavit.
[13]
In the replying affidavit, the applicants insist that they have shown
that they have direct and
substantial legal interest in the subject
matter of the application in the sense that they are prejudicially
affected by the court
order. The court order was indeed granted
erroneously because their offer was not brought to the attention of
the court which would
have been a sufficient factor to be considered
by the court to protect the interests of both the parties.
[14]
Then in argument, the applicants aver that the application is
premised on the provisions of rule
42(1) (a). It is also the
applicants’ case that in the alternative to the orders sought
in the notice of motion, the matter
should be remitted back to court
and the parties be informed that the matter will be heard in terms of
rule 46A (9)6).
[15]
Thus was in short the submissions made by the respective parties.
[16]
In terms of rule 42 (1) (a) any party affected by an order
erroneously obtained or granted in
their absence may apply to the
court for a variation or rescission of the impugned order. The
requirements to be met by an applicant
who seeks to rescind an order
on the basis that it was erroneously granted in their absence were
alluded to by Corbett, J reciting
the
provisions
of rule 42(1) (a)
in
United
Watch & Diamond Co v Disa Hotels
[2]
where he said
:
“
an
applicant for an order setting aside or varying a judgment or order
of Court must show, in order to establish locus standi,
that he
has an interest in the subject-matter of the judgment or order
sufficiently direct and substantial to have entitled him
to intervene
in the original application upon which the judgment was given or
order granted”.
[17]
The principle was recently restated in
Zuma
v Secretary of the Judicial Commission of Inquiry into Allegations of
State Capture, Corruption and Fraud in the Public Sector
Including
Organs of State and Others
[3]
as follows:
“
[50] …when
a rescission application is brought, a litigant must meet the
jurisdictional requirements for rescission, set
out in rule 42(1)(a)
or the common law, before a court can exercise its discretion to
rescind an order.”
[18]
It is common cause that the process in terms of which the property
was sold in execution is in
line with provisions of rule 46A (1) and
(2) which provide thus:
“
(1)
This rule applies whenever an execution creditor seeks to execute
against the
residential immovable property of a judgment debtor.
(2) (a) A
court considering an application under this rule must—
(i) establish whether
the immovable property which the execution creditor intends to
execute against is the primary residence of
the judgment debtor; and
(ii) consider
alternative means by the judgment debtor of satisfying the judgment
debt, other than execution against the judgment
debtor’s
primary residence.
(b) A court
shall not authorise execution against immovable property which is the
primary residence of a judgment debtor
unless the court, having
considered all relevant factors, considers that execution against
such property is warranted.”
[19]
It is also common cause that the impugned order was granted in the
absence of the applicants
as they were not parties in the proceedings
resulting in both the execution proceedings and the subsequent court
order and as concisely
pointed out in
Petrus
Johannes Bestbier and Others v Nedbank Limited:
[4]
“
[18]
Simply put, rule 46A was meant to protect indigent debtors who were
in danger of losing their homes and give effect to
s 26 of the
Constitution
.
[20] “T
he
aim of rule 46A is to assist the Court in considering whether the s
26 rights of
the
judgment debtor
(my emphasis) would be violated if his/her house is sold in
execution. Rule 46A contains procedural prescripts, not substantive
law.
[20]
I am unable to perceive how the mere purchase of the property after
it was sold in execution
for that matter, would render the applicants
to be the affected parties as contemplated in
rule
42(1)(a)
[5]
let alone
to
have a
direct
and substantial interest in the subject-matter entitling them to
intervene in the application upon which the impugned order
was
granted.
[21]
I am also not persuaded by the applicants’ contention that the
matter should be remitted
back to court and the parties be informed
that the matter will be heard in terms of rule 46A(9)(c). For the
reason that, the provisions
of rule 46A(9)(c) do not entail a new
process but a reconsideration of the reserve price set in terms of
rule 46A(8)(e). The court
merely has to take into account the
evidence placed before it by the Sheriff
[6]
and the judgment debtors as these are the interested protagonists in
these proceedings not a “disinterested” third
party. It
is also important to note that on the applicants’ own
submission the Sheriff was also not privy to the offer and
the
respondents also did not bring it to the attention of the court. For
these reasons,
the
respondents’ objection against the applicant’s lack of
locus
standi
to
seek the setting aside of the sale in execution and the rescission of
the court order prevails and it is accordingly upheld.
[22]
It is indisputable that the applicants’ offer to purchase the
property was accepted by
the judgment debtors on 3 June 2021, a day
after the property was sold in execution to the respondents to
satisfy a judgment debt.
[23]
It
is trite that an attachment in execution creates a
pignus
judiciale
in
that, the
control
of the property attached passes from the judgment debtor to the
officer entrusted with the execution of the writ, the dominium
of the
debt remaining with the judgment debtors
[7]
therefore,
as
correctly contended by the respondents the judgment debtors could not
have validly concluded a sale agreement to sell a property
judicially
attached and sold in execution without
having
first obtained the release of the property from judicial attachment.
I accordingly hold that the applicants’ offer to purchase the
property from the judgment debtors is invalid and unenforceable
consequently, absent an
underlying
iusta
causa
(sale agreement) the applicants are disentitled to the transfer of
the property.
[24]
Regarding the interdict to prohibit the transfer of the
property to the respondents, there
is not even
an attempt in the applicants’ founding affidavit to aver the
requirements of a final interdict
or any other interdict for
that matter.
[25]
Having regard to the facts of this matter, I have consequently
arrived at the conclusion that
the applicants have not made out a
case for the relief sought in the notice of motion, the application
ought to be dismissed.
Costs
[26]
There is no reason why the costs should not follow the result.
[27]
In the premises, the following order is issued
:
(1)
The application is dismissed with costs.
N.S.
DANISO, J
APPEARANCES:
Counsel
on behalf of Applicants:
Adv. JJ Buys
Instructed
by:
Willie Botha Inc.
BLOEMFONTEIN
Counsel
on behalf of 1
st
and 2
nd
Respondents:
Adv. HJ van der Merwe
Instructed
by:
Bezuidenhouts Inc.
BLOEMFONTEIN
[1]
“Where the reserve price is not achieved at a sale in
execution, the sheriff must submit a report to the court, within
five days of the date of the auction, which report shall contain—
(i) the date, time and place at which the auction sale
was
conducted; (ii) the names, identity numbers and contact details of
the persons who participated in the auction; (iii) the
highest bid
or offer made; and (iv) any other relevant factor which may assist
the court in performing its function in paragraph
(c).
[2]
1972
(4) SA 409
(C) at
414D-G
&
415
A-B;
Parkview
Properties (Pty) Ltd v Haven Holdings (Pty) Ltd
1981
(2)
SA 52
(T)
at
54H-55C;
M
inister
of Finance v Afribusiness
NPC
2022
(4) SA 362
(CC)
[3]
[2021]
ZACC 28
[4]
(case number 150/2021)
[2022]
ZASCA 88
(13 June 2022).
[5]
Zuma
at
para 52.
[6]
Rule 46A(9)(d).
[7]
Reynders
v Rand Bank BPK
1978
(2) SA 630
(T).