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[2023] ZAECELLC 8
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Petersen v Gqosha and Another (1574/2022) [2023] ZAECELLC 8 (25 April 2023)
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Certain
personal/private details of parties or witnesses have been
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IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, EAST LONDON CIRCUIT COURT)
CASE NO. 1574/2022
In
the matter between:
GARTH
PETERSEN
First
applicant
SARAH-JANE
PETERSEN
Second
applicant
and
KHAYALETHU
WISEMAN GQOSHA
First
respondent
BUFFALO
CITY METROPOLITAN MUNICIPALITY
Second
respondent
JUDGMENT
LAING
J
[1]
This is an application for an order
evicting the first respondent and other occupiers from a residential
property situated at B[…]
D[…], D[…], E[…]
L[…] (‘the property’).
Applicants’ case
[2]
The previous owner of the property
was a Mr Colin Kriel. As security for various loans that he had
obtained, Mr Kriel registered
six mortgage bonds against the
property. A creditor, Shumayela Properties (Pty) Ltd (‘the
company’), subsequently instituted
action proceedings under
case number EL 835/2016 and obtained judgment against him, whereupon
the company made application for
execution against the property in
terms of rule 46(1), read with rule 46A, of the Uniform Rules of
Court (‘URC’). The
court granted an order to that effect,
subject to any rights that the first respondent had as occupier of
the property.
[3]
The applicants purchased the property
from Mr Kriel on 12 February 2021 after concluding negotiations with
the attorneys for the
judgment creditor (i.e., the company). The
transfer of the property was registered on 28 July 2021.
[4]
As a backdrop to the above, there had
been a dispute about Mr Kriel’s prior sale of the property to
the first respondent.
This had formed the subject of action
proceedings brought by Mr Kriel under case number EL 381/2019, in
terms of which he had sought
the cancellation of the sale and the
first respondent’s eviction from the property. The first
respondent had denied the existence
of the sale but had argued that
he was entitled to occupation. This was because the parties had
entered into a separate agreement
in terms of which Mr Kriel had
allegedly granted the first respondent the right to occupy the
property, pending the repayment of
a loan.
[5]
The applicants pointed out that the
first respondent had failed to register any right against the
property. There was no impediment
to the purchase thereof.
[6]
In accordance with the agreement of
sale concluded with Mr Kriel, the applicants were entitled to vacant
occupation of the property
on the date of registration of transfer.
Despite the applicants’ delivery of a notice to vacate on 4
August 2021, the first
respondent refused to cooperate and relied on
the right of occupation allegedly granted to him by Mr Kriel. He,
furthermore, refused
access to the property for purposes of the first
applicant’s investigation of a possible water leak. He also
refused access
when the first applicant attempted to do so in the
company of a police officer on 19 August 2021.
[7]
The applicants, in desperation, found
alternative accommodation for the first respondent and offered to pay
four months’ worth
of rental and the removal costs, but to no
avail.
[8]
A subsequent account from the second
respondent indicated that water consumption at the property had
increased substantially, confirming
their suspicion of a possible
leak. The applicants were liable for the charges but were unable to
address the problem without the
first respondent’s cooperation.
[9]
On 2 November 2021, the applicants
instituted urgent application proceedings against the first
respondent under case number EL 1281/2021.
The matter was struck off
the roll and subsequently re-enrolled, whereafter it was dismissed on
9 June 2022.
[10]
Pending finalisation of the dispute
with the first respondent, the applicants have been constrained to
secure rented accommodation
at considerable expense. They have also
placed their belongings in storage. The second applicant previously
operated her legal
practice from home but has been unable to do so
properly from temporary premises. The applicants and their children
have lived
in a state of limbo for well over a year and the
uncertainty, overall, has taken an emotional toll on the family.
[11]
In the meanwhile, municipal rates and
service charges continue to accumulate to the first applicant’s
account, without benefit
of access to or use of the property. The
applicants’ request that the first respondent settle such
expenses was refused.
When the first applicant was afforded an
opportunity to gain limited access to the property on 4 April 2022,
he was charged an
amount of R 2,500 by the attorneys for the first
respondent as an inspection
in
loco
fee. The
property was in considerable disrepair, with a collapsed wooden deck,
exposed electrical wiring, cracked and broken windows,
and damaged
guttering.
[12]
Mr Kriel’s supporting affidavit
accompanied the application, explaining how the first respondent came
to be in occupation
of the property. The first respondent had
previously lent Mr Kriel a considerable amount of money to lease fuel
storage tanks situated
at the Black Sea port of Novorossiysk in
Russia. Subsequently, Mr Kriel permitted him to take occupation of
the property on or
about 29 February 2016, allegedly in anticipation
of the first respondent’s purchase thereof. A dispute arose
regarding compliance
with the terms of the deed of sale and continued
occupation of the property. The first respondent asserted that Mr
Kriel had permitted
him to take occupation as security for repayment
of the loan. Mr Kriel denied this and instituted action proceedings
for cancellation
of the deed of sale and eviction of the first
respondent. These were withdrawn after the attachment of the property
by Shumayela
Properties (Pty) Ltd.
First respondent’s
case
[13]
The first respondent raised two
points
in limine
:
the first pertained to compliance with the regulations for the
Justices of the Peace and Commissioners of Oaths Act 16 of 1963;
the
second pertained to the impact of the applicants’ earlier
application proceedings (case number EL 1281/2021), to the
effect
that the dispute was now
res
judicata
. These
will be dealt with later in the paragraphs that follow.
[14]
In his answering affidavit, the first
respondent averred that he had entered into a verbal agreement with
Mr Kriel to take occupation
of the property as security for the loan
that he had provided. He and his family consequently moved to the
property on or about
29 February 2016.
[15]
Subsequently, on or about 25 April
2016, Mr Kriel had informed him that he was in arrears with mortgage
bond repayments and had
requested that he conclude a deed of sale
regarding the property so that Mr Kriel could ‘buy time’
from the relevant
bondholder. The first respondent did so and
continued to remain in occupation.
[16]
Whereas the first respondent admitted
that the applicants are the owners of the property, he asserted that
he was entitled to the
benefits of a lien or pledge in relation
thereto. He contended that the court had already made such a
determination in the earlier
application proceedings. Mr Kriel had
neither cancelled the underlying verbal agreement nor repaid the
loan. The first respondent,
so he argued, was entitled to remain in
occupation. This would come to an end if either Mr Kriel or the
applicants settled the
outstanding amount owed.
[17]
Turning to Mr Kriel’s
supporting affidavit, the first respondent indicated that the second
applicant had introduced him to
Mr Kriel, who had presented to him a
business opportunity. This had resulted in the first respondent’s
provision of a loan
in the amount of US$ 86,500. The terms of the
loan were recorded in a written agreement and are not entirely
relevant for immediate
purposes, save to state that Mr Kriel was
required to repay double the value of the loan within 30 days,
together with payments
linked to the supply of fuel stored at
Novorossiysk. The first respondent provided a further loan, such that
Mr Kriel’s liability
amounted to US$ 249,550 plus interest of
15% per annum, calculated from 23 September 2015.
[18]
Mr Kriel’s failure to repay the
loan precipitated the onset of financial difficulties for the first
respondent. His house
was attached by a judgment creditor, prompting
his negotiation with Mr Kriel for the possible purchase of the
property for what
was owed in terms of the loan. They failed to agree
on the purchase price, however, and the deal fell through.
Nevertheless, the
first respondent alleged that he and Mr Kriel
concluded a verbal agreement in terms of which he would take
occupation of the property,
pending Mr Kriel’s repayment. The
first respondent would not be liable for occupational rental or rates
and service charges.
[19]
The first respondent confirmed that
the subsequent conclusion of a deed of sale for the purchase of the
property was a sham. It
was done merely to ease some of the pressure
on Mr Kriel in relation to his mortgage bond repayments. The first
respondent’s
occupation of the property arose by reason of the
verbal agreement with Mr Kriel. He denied that he was an unlawful
occupier.
In reply
[20]
The applicants pointed out, in reply,
that the court had never made a finding in the earlier application
proceedings on the existence
or otherwise of a lien or pledge in
favour of the first respondent. The court had merely dismissed the
application because of a
successful special plea of
lis
pendens
, with
reference to Mr Kriel’s action proceedings.
[21]
Furthermore, the applicants argued
that the debt owed by Mr Kriel to the first respondent became due on
23 September 2015. In the
absence of any interruption, the debt had
run to prescription.
[22]
Regarding the verbal agreement to the
effect that the first respondent took occupation of the property to
secure his loan to Mr
Kriel, the applicants contended that this was
not competent without the bondholder’s consent.
Main issues to be
decided
[23]
The first respondent’s points
in limine
must be considered. The argument made
regarding
res
iudicata
requires
closer examination.
[24]
If the court is satisfied that there
is no basis for the above, then it will be necessary to decide
whether it would be just and
equitable to order the first
respondent’s eviction from the property. This will entail,
inter alia
,
the determination of whether he is indeed an unlawful occupier, which
will, in turn, depend on the merits of his claim to the
benefits of a
lien or pledge, as alleged.
[25]
The following paragraphs deal with
the points
in
limine
.
Compliance with Act 16
of 1963
[26]
The first respondent argues that the
first applicant’s founding affidavit does not comply with the
regulations to Act 16 of
1963 since the commissioner of oaths failed
to insert the place and date of the declaration. To that effect,
regulation 4(1) provides
that:
‘…
Below
the deponent’s signature or mark the commissioner of oaths
shall certify that the deponent has acknowledged that he
knows and
understands the contents of the declaration and he shall state the
manner, place and date of taking the declaration.’
[1]
[27]
It is not disputed that there was
non-compliance. The applicants subsequently filed, in reply, an
affidavit by the commissioner
of oaths in question, Ms Kerri de la
Querra, who confirmed that she had commissioned the first applicant’s
founding affidavit
on 9 September 2022 at her offices, situated at
P[…] Street, B[…], E[…] L[…] .
[28]
As the
legal representative for the first respondent acknowledged in
argument, non-compliance with the regulations is not fatal.
In
S
v Munn
,
[2]
Van den Heever observed that:
‘
Compliance
with the regulations provides a guarantee of acceptance in evidence
of affidavits attested in accordance therewith, subject
only to
defences such as duress and possibly undue influence. Where an
affidavit has not been so attested, it may still be valid
provided
there has been substantial compliance with the formalities in such a
way as to give effect to the purpose of the legislator…’
[3]
[29]
In the present matter, the first
respondent asserted that it was unlikely that the founding affidavit
had been signed and commissioned
on 9 September 2022. This was
because the applicants had already brought an application for leave
to appeal against the judgment
in the earlier application proceedings
(case number 1281/2021) and only withdrew it a week later, on 16
September 2022. The later
date was also when the notice of motion was
dated.
[30]
The first respondent has, however,
not alleged duress or undue influence or any other irregularity
regarding the first applicant’s
affidavit. He has also not
disputed where it was commissioned. Whether it was signed and
commissioned on 9 or 16 September 2022
is entirely irrelevant.
Nothing turns on the point and the court is satisfied that there has
been substantial compliance with the
regulations.
Res iudicata
[31]
The
first respondent’s next point is that the present application
flounders on the principle of
res
iudicata
.
The requirements for a successful defence to that effect were set out
in
National
Sorghum Breweries Ltd (t/a Vivo African Breweries) v International
Liquor Distributors (Pty) Ltd
,
[4]
where the Supreme Court of Appeal listed them as ‘
idem
actor
,
idem
reus
,
eadem
res
and
eadem
causa petendi
’
.
[5]
The court went on to hold that:
‘
This
means that the exception can be raised by a defendant in a later suit
against a plaintiff who is “demanding the same
thing on the
same ground” (per Steyn CJ in
African
Farms and Townships Ltd v Cape Town Municipality
1963
(2) SA 555
(A), at 562A); or which comes to the same thing, “on
the same cause for the same relief” (per Van Winsen AJA in
Custom
Credit Corporation (Pty) Ltd v Shembe
1972
(3) SA 462
(A), at 472A-B…); or which also comes to the same
thing, whether the “same issue” had been adjudicated upon
(see
Horowitz
v Brock
1988
(2) SA 160
(A), at 179A-H). The fundamental question in the appeal is
whether the same issue is involved in the two actions: in other
words,
is the same thing demanded on the same ground, or, which comes
to the same, is the same relief claimed on the same cause, or, to
put
it more succinctly, has the same issue now before the court been
finally disposed of in the first action?’
[6]
[32]
The
principle operates to bring litigation to an end after a matter has
already been decided. A final judgment must be given effect,
even
where it is wrong.
[7]
In
Molaudzi
v S
,
[8]
the Constitutional Court explained that:
‘…
The
underlying rationale of the doctrine of
res
iudicata
is
to give effect to the finality of judgments. Where a cause of action
has been litigated to finality between the same parties
on a previous
occasion, a subsequent attempt by one party to proceed against the
other party on the same cause of action should
not be permitted. It
is an attempt to limit needless litigation and ensure certainty on
matters that have been decided by the courts.’
[9]
[34]
It is common cause that the parties
and the relief sought in both the earlier and the present application
are the same. The first
respondent argued that Hartle J dismissed the
earlier application because she found that the premise upon which the
applicants
had relied was not true and that they had withheld
critical information. No mention had been made of the first
respondent’s
occupation of the property by reason of his claim
to a lien or pledge that had allegedly arisen from Mr Kriel’s
indebtedness.
Consequently, he argued, the applicants had failed to
prove that he was an unlawful occupier.
[35]
The
first respondent raised, furthermore, the application of the
Henderson
principle
as considered in
Democratic
Alliance v Brummer
,
[10]
within the context of the defence of issue estoppel. This requires
elaboration.
[36]
In
Royal
Sechaba Holdings (Pty) Ltd v Coote and another,
[11]
the Supreme Court of Appeal discussed the principle of issue
estoppel, remarking that it could be invoked successfully in
situations
where the relief sought or cause of action was not the
same as that in the case already decided. This was because the common
law
requirements for
res
iudicata
had
been relaxed by the courts in appropriate circumstances.
[12]
Provided that the parties were the same and the issue to be decided
was the same, the defence of
res
iudicata
was
still available. It has become customary, however, to refer to the
defence, when used in such situations, as ‘issue estoppel’,
applying the corresponding terminology that is used in English
law.
[13]
[37]
Returning
to
Brummer
,
mentioned by the first respondent, a full bench explained that issue
estoppel had ‘taken root in our law as a subsidiary
of the
principle of
res
iudicata
’
.
[14]
Wille J observed as follows:
‘…
Issue
estoppel applies where an issue of fact or law was an essential
element of a prior final judgment. The issue cannot be revisited
in
subsequent proceedings before another court even if a different cause
of action is relied upon or different relief is claimed.
[15]
Our courts have recognised that a strict application of issue
estoppel could result in unfairness in some unusual circumstances,
but this is typically applied in cases where the nature of the issue
is in dispute or at least open to some doubt…
…
Issue
estoppel applies when different relief based on different causes of
action is sought in the subsequent case, if it involves
the
determination of the same issue of fact or law.
[16]
I take the following from
Ekurhuleni
,
where it was held that-
“
the
submission that
res
iudicata
does
not apply because of the lack of sameness in the cause of action is
misconceived. Sameness is determined by the identity of
the question
previously set in motion.”
[17]
…
Issue
estoppel developed precisely because requiring sameness between the
two causes of action allows parties to relitigate the
same issue by
garbing these up in different causes of action. The authority not to
apply issue estoppel for reasons of justice
and equity needs to be
evaluated with reference to the
Henderson
[18]
principle.
This principle provides,
inter
alia
,
that when a given matter becomes a subject of litigation-
“
the
court requires the parties to that litigation to bring forward their
whole case, and will not (except under special circumstances)
permit
the same parties to open the same subject of litigation in respect of
matter which might have been brought forward as part
of the subject
in contest, but which was not brought forward, only because they
have, from negligence, inadvertence, or even accident,
omitted part
of their case.”
…
This
doctrine has been fully assimilated into our law. The doctrine
applies equally to pure claims of
res
iudicata
and
to claims based on issue estoppel…’
[19]
[38]
The
Henderson
principle must not be confused with
issue estoppel. Whereas Wille J’s point was that the former
must inform the application
of the latter, the concepts are
distinguishable. As this court understands it, the
Henderson
principle requires a party to present
his or her case in its entirety, rather than subsequently attempt to
litigate aspects of it
that were previously omitted. In contrast,
issue estoppel is a defence (derived from the principle of
res
iudicata
) that can
be raised when the same issue has already been adjudicated to
finality between the same parties.
[39]
The first respondent contended, with
reference to the above principles, that the applicants were precluded
in the circumstances
from instituting another application against
him, based on the same relief and the same cause of action. They
ought to have placed
all relevant information before the court in the
earlier application to demonstrate that the first respondent was an
unlawful occupier.
That issue, i.e., whether he was an unlawful
occupier, was the same in both the earlier and the present
application.
[40]
The applicants, in turn, focused on
the basis upon which Hartle J dismissed the earlier application. They
asserted that the court
found that the first respondent had
successfully raised a plea of
lis
pendens
regarding
the action proceedings brought by Mr Kriel against the first
respondent (case number EL 381/2019). Consequently, they
argued, the
court held that the parties should involve themselves in such
proceedings, which entailed a determination of the first
respondent’s
reliance upon a lien or pledge in relation to Mr Kriel’s
indebtedness. Hartle J was unable to make a finding
on whether the
first respondent was an unlawful occupier, pending finalisation of
the action proceedings. Once a determination
had been made, the
applicants could approach the court afresh.
[41]
Furthermore, the applicants pointed
out that Mr Kriel had subsequently withdrawn the above action
proceedings. There had, moreover,
been no counterclaim. The
litigation had come to an end. The only avenue open to the
applicants, consequently, was the institution
of the present
application proceedings.
[42]
It is
necessary, at this stage, to consider more closely the decision
handed down in the earlier application.
[20]
After considering the facts placed before her, including the
applicants’ failure to have laid bare every legally relevant
detail, as well as the first respondent’s vagueness regarding
the basis for his claim to the lien or pledge, Hartle J held
as
follows:
‘…
In
my view all the elements of a successful plea of
lis
pendens
avail
the first respondent in the circumstances and given his reservations
that the applicants purported to defeat his right of
retention by
purchasing the property from Colin Kriel whilst knowing full well
that he was claiming a lien or pledge over it (a
concern not
unreasonably held by him), it appears to me to be appropriate that
the applicants involve themselves in the finalization
of the pending
action. No doubt the matter can also be resolved earlier by the debt
which is the subject matter of the pledge or
lien being settled or
secured to the first respondent’s satisfaction.
…
In
given circumstances, a court can and should stay eviction proceedings
if the outcome of other proceedings impacts the merits
of the
eviction or, if factual disputes raised on the papers can only be
resolved by oral evidence. Either or both situations apply
in
casu
.
I
cannot determine the issue whether the first respondent is an
unlawful occupier on motion (especially since the applicants have
not
entirely taken this court into their confidence) neither can I find
that the pending litigation between Colin Kriel and the
first
respondent is legally irrelevant.
To
the contrary, and according to the doctrine of notice, the applicants
at the time they bought the property, on their own showing,
knew that
the first respondent claimed a “lien” (or pledge) and in
the result that right of retention ought to prevail
against them as
successors in title if the court in the pending action finds in the
first respondent’s favour in this regard.
…
I
have considered ordering a stay of these proceedings, but my concern
is that the premise for the application set forth by the
applicants
in the papers is not a true one and that critical information has
been withheld from the court. The launch of the present
application
was also unnecessary in the light of the pending litigation in East
London Case No. 381/2019 which ought to dispose
of the question
whether the first respondent’s right of retention on the basis
contended for can prevail against the owner’s
rei
vindicatio
.’
[21]
[43]
The court subsequently dealt with the
applicant’s non-compliance with the procedural requirements set
out in section 4(2)
of the Prevention of Illegal Eviction From and
Unlawful Occupation of Land Act 19 of 1998 (‘PIE’).
Thereafter, Hartle
J remarked that:
‘…
By
the first respondent’s own admission, his primary concern is
his contention that he is not an unlawful occupier within
the meaning
of the definition in the PIE Act. Once that issue has been resolved
the applicants can approach the court afresh, alternatively
can seek
a directions order in the pending action to be served timeously
before the hearing.’
[22]
[44]
This court agrees with the first
respondent that Hartle J dismissed the earlier application because
the premise upon which the applicants
had relied was not true and
that they had withheld critical information. The decision, however,
clearly reveals that the court
made no determination whatsoever
regarding the issue of whether the first respondent was an unlawful
occupier. Hartle J merely
held that the first respondent’s plea
of
lis pendens
had merit. The action proceedings,
pending at the time, could have been decisive.
[45]
Ultimately, the first respondent’s
legal representative conceded during argument in the present matter,
when pressed by this
court, that no determination had been made of
the issue in question. This was an important concession, correctly
made.
[46]
The special plea of
res
iudicata
is only
available when a court in an earlier case between the same parties
has already granted or refused the same relief premised
on the same
cause of action. To put it more elementarily, the same thing must
have already been decided on the same grounds. Alternatively,
a party
may invoke issue estoppel purely on the basis that the same issue has
already been determined, notwithstanding the fact
that the usual
requirements for
res
iudicata
have not
been met. Crucially, the special plea, however it is framed, depends
on a prior adjudication that is, at the very least,
dispositive of
the issue in question.
[47]
In the present matter, it cannot be
argued that the decision of Hartle J disposed of the issue of whether
the first respondent is
an unlawful occupier. That issue remains very
much alive. Consequently, the first respondent’s point
in
limine
fails. The
court is satisfied that the application has successfully navigated
the perils of
res
iudicata
and that
it is necessary to investigate the merits of the matter in the
paragraphs that follow.
Discussion
[48]
The merits of the application will be
discussed in the paragraphs that follow, in accordance with the
various issues that have emerged.
Dispute of fact
[49]
At the heart of the first
respondent’s defence is his reliance on a lien or pledge over
the property, derived from a verbal
agreement with Mr Kriel to the
effect that he could take occupation as security for the loan. In
contrast, Mr Kriel has denied
the existence of such agreement and
asserted that the first respondent’s occupation merely came
about in anticipation of
the purchase of the property.
[50]
Where
the material facts are in dispute and where no request has been made
for the matter to be referred for oral evidence, the
principles in
Stellenbosch
Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd
apply
[23]
where
Van Wyk J, writing for the full bench, held that:
‘
where
there is a dispute as to the facts a final interdict should only be
granted in notice of motion proceedings if the facts as
stated by the
respondents together with the admitted facts in the applicant’s
affidavits justify such an order.’
[24]
[51]
A
court may, however, reject the respondent’s version when his or
her allegations are patently implausible. The authority
for this is
the oft-quoted decision in
Plascon-Evans
Paints v Van Riebeeck Paints
,
[25]
where
the erstwhile Appellate Division,
per
Corbett
JA, held as follows:
‘…
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… 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…
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…’
[26]
[52]
In the present matter, there is no
clear indication that the first respondent’s allegations are so
far-fetched or untenable
as to persuade the court to reject them.
From the papers, both Mr Kriel and the first respondent are
experienced businesspeople
with healthy appetites for risk. The
prospect of failure in a deal involving the lease of fuel storage
tanks at Novorossiysk appears
not to have deterred either of them. It
is common cause, moreover, that Mr Kriel was experiencing financial
difficulties at the
time. A temporary arrangement for the first
respondent to take occupation of the property as a guarantee for
repayment of the Novorossiysk
loan, followed by the conclusion of a
contrived deed of sale to stave off the bondholder, is not completely
implausible. To this
must be added, for further consideration, the
unlikelihood of Mr Kriel’s version that he blithely permitted
the first respondent
to take occupation before the proper formulation
and conclusion of a deed of sale that astutely addressed the terms of
prior occupation
and protected the former’s rights overall. If
done correctly, then the resulting deed of sale would also have
served to prevent
the need for Mr Kriel’s subsequent action
proceedings (case number EL 381/2019).
[53]
The court is persuaded, consequently,
to accept the first respondent’s version that the lien or
pledge, as claimed, arose
from the averred agreement. This, however,
is where difficulties for the first respondent begin to arise.
Lien or pledge
[54]
A lien
can be described as a right of retention or
ius
retentionis
.
It is defined as the right to retain physical control over another’s
property, whether movable or immovable, to secure payment
of a claim
relating to the expenditure of money or something of monetary value
by the possessor on that property until the claim
has been
satisfied.
[27]
It is not the
first respondent’s case that he has spent money or done work on
the property, in accordance with a contractual
obligation towards Mr
Kriel or otherwise. On the strength of the definition alone, the
first respondent does not have a lien.
[28]
[55]
A
pledge, on the other hand, is a limited real right of security in a
movable asset. It is created by delivery of the asset to the
pledgee,
pursuant to an agreement between him- or herself and the owner of the
asset, to secure the fulfilment of an obligation
to the pledgee by
the pledgor or a third party.
[29]
The pledgee enjoys a preference in relation to the proceeds of the
pledged asset in a sale of execution. Importantly, the subject
matter
of a pledge must be a movable asset.
[30]
A pledge must, accordingly, be distinguished from the concept of
mortgage, which refers to a real right of security in the immovable
asset of another, created by registration in the deeds registry
pursuant to an agreement between the parties. The right serves
to
secure an indebtedness due to the creditor, usually described as the
principal obligation.
[31]
It
cannot be said that the first respondent in the present matter enjoys
the benefits of either a pledge or a mortgage.
[56]
If the first respondent has neither a
lien nor a pledge, then what right does he enjoy? At best, he has (or
had, as shall be explained)
a contractual right against Mr Kriel to
continue to occupy the property until Mr Kriel has (or had) fulfilled
his obligation to
repay the loan. The right was, of course, subject
to the continued existence of such obligation. The applicants have,
however,
pleaded prescription.
Prescription
[57]
In terms of section 10(1), read with
section 11(d)
, of the
Prescription Act 68 of 1969
, a debt shall be
extinguished by prescription after the lapse of three years. Under
section 12(1)
, prescription shall commence to run as soon as the debt
is due. Furthermore, under section 14(1), the running of prescription
shall
be interrupted by an express or tacit acknowledgment of
liability by the debtor.
[58]
Here, the first respondent’s
loan to Mr Kriel consisted of various tranches, the last of which
having been released on or
about 23 September 2015. In the most
favourable scenario for the first respondent, the running of
prescription was interrupted
on 29 February 2016, when Mr Kriel
tacitly acknowledged his liability by permitting the first respondent
to take occupation. The
latter had, accordingly, until 28 February
2019 to recover his loan, failing which the provisions of
section
10(1)
of the above Act would take effect. The first respondent has
not refuted the allegation that he has taken no steps to enforce his
claim against Mr Kriel. This much was acknowledged by his legal
representative in argument. In the circumstances, Mr Kriel’s
debt to the first respondent must be deemed to have become
extinguished by prescription. To put it another way, Mr Kriel’s
obligation has fallen away. Commensurately, the first respondent no
longer has any right to occupy the property.
Rule 46A
[59]
The
first respondent has raised certain contentions within the context of
rule 46A of the Uniform Rules of Court (‘URC’).
The rule
in question provides for judicial oversight in relation to execution
against residential immovable property, so that the
constitutional
right to adequate housing is protected.
[32]
[60]
It appears to be the first
respondent’s argument that once the property was declared
executable, as was done by Zilwa J on
12 January 2021 upon
application made by Mr Kriel’s judgment creditor, Shumayela
Properties (Pty) Ltd, the property could
not be alienated in any
manner other than a sale in execution. This was because only the
court had authority to control the way
execution, as a process of
court, should be carried out. The first respondent also argued that
the applicants failed to heed the
condition imposed by Zilwa J to the
effect that the sale of the property was subject to any rights which
the first respondent may
have as an occupier.
[61]
The
decision in
Graham
v Graham
,
[33]
as cited by the first respondent, is authority for the proposition
that execution is a process of the court, and that a court has
inherent authority to control its own process, subject to such rules
as there are.
[34]
This was
confirmed in
Strime
v Strime
,
[35]
similarly cited. This court respectfully agrees with the above, which
is, in any event, entrenched under section 173 of the Constitution.
[62]
The order made by Zilwa J, however,
was clearly pursuant to an application brought by the judgment
creditor in terms of rule 46A,
which serves as a safeguard against
the abuse of a judgment debtor’s constitutional right to
adequate housing. It declared
the property to be specially
executable, authorised the issuing of a writ of execution, set a
reserve price, and stipulated that
the conditions of sale were to
indicate that the sale was subject to the first respondent’s
rights as an occupier. Importantly,
the order did not prescribe the
way the property was to be sold. It simply granted authority for
execution against the property
in circumstances where it was used for
residential purposes, as envisaged in terms of rule 46A. Whether the
property was sold by
public auction or consequent to negotiations
between the judgment creditor’s attorneys and private
purchasers, as was the
situation here, is immaterial.
[63]
In
relation to the argument that the applicants failed to heed the
condition imposed by Zilwa J, it may well be so that Mr Kriel
and the
applicants did not specifically record the above condition in the
subsequent deed of sale. That does not mean, however,
that the
transaction should be treated as invalid. The first respondent has
brought no counterapplication to set aside the sale
of the property.
Moreover, the condition in question merely stated the obvious: that
the sale was subject to any rights that the
first respondent may have
as an occupier. The decision in
Firstrand
Bank Ltd v Mgedesi,
[36]
mentioned by counsel for the applicants, indicates that the subject
matter of a rule 46A application does not relate to the rights
of an
occupier who is not the judgment debtor. He or she enjoys separate
but comprehensive legislative protection under PIE.
[37]
Eviction proceedings
[64]
The applicants have expressly brought
the application for eviction in terms of section 4(2) of PIE. The
sheriff served notice of
the proceedings on both respondents on 23
January 2023, in anticipation of the hearing on 16 February 2023 and
as required under
section 4(2), read with section 4(5).
[65]
The
seminal decision of the Supreme Court of Appeal in
Ndlovu
v Ngcobo; Bekker and Bosch v Jika
[38]
highlighted the main objectives and principles of PIE. These have
been summarised as follows,
inter
alia
:
[39]
PIE applies to all unlawful occupiers, irrespective of whether their
occupation of the land was previously lawful; the effect of
PIE is to
delay or suspend the exercise of a landowner’s full proprietary
rights until a determination has been made on whether
it is just and
equitable to evict the unlawful occupier and under what conditions;
provided that all the procedural requirements
have been met, a
landowner is entitled to approach a court based on ownership and the
occupier’s unlawful occupation, the
occupier’s bearing an
evidential onus in this regard.
[40]
[66]
Both
the applicants and the first respondent have referred to
City
of Johannesburg v Changing Tides 74 (Pty) Ltd and others
.
[41]
In that matter, Wallis JA dealt with an application brought by a
private party for the eviction of the unlawful occupiers of a
dilapidated building situated in Doornfontein, Johannesburg. The
court held that, regarding the relationship between sections 4(7)
and
4(8) of PIE, there were two enquiries. The first was whether it was
just and equitable to grant an eviction order, having had
regard to
all relevant factors, which included whether there was alternative
land or accommodation, to be assessed against the
protection given to
the landowner under section 25 of the Constitution. The second was
what justice and equity demanded in relation
to the date of the
implementation of any order granted and what conditions should be
attached thereto.
[42]
Furthermore, in relation to onus, the court held that, where section
4(7) applied, it was the duty of the applicant to demonstrate
that he
or she had complied with the relevant notice requirements, that the
respondents were in unlawful occupation, and that sufficient
information had been presented to satisfy the court that it would be
just and equitable to grant the order sought.
[43]
[67]
In the present matter, the applicants
contended that a court must grant the order if the provisions of
section 4 of PIE had been
met. The first respondent argued that the
provisions had not been met and that he has a valid defence.
[68]
There
is no dispute that the sheriff served notice of the proceedings on
the respondents. It is common cause, too, that the applicants
did not
obtain the directions of the court for the contents and manner of
service of the section 4(2) notice. In
Cape
Killarney Property Investments (Pty) Ltd v Mahamba and others
,
[44]
Brand AJA held as follows:
‘…
The
Act [PIE] has its roots,
inter
alia
,
in 26(3) of the Constitution, whereby “no one may be evicted
from their home without an order of court made after consideration
of
all the relevant circumstances”. Accordingly the purpose of
section 4(2) is clearly to afford the respondents in eviction
proceedings a better opportunity than they would have under the Rules
to put all the circumstances that they allege to be relevant
before
the court.’
[45]
[69]
In the present matter, the section
4(2) notice was preceded by the applicants’ notice of motion
and accompanying affidavits,
served on 19 September 2022. The first
respondent filed his notice of opposition on 28 September 2022. The
section 4(2) notice
itself was comprehensive. It set out the date
upon which the application would be heard, the nature of the relief
sought, and the
grounds relied upon by the applicants. It explained
that the first respondent would be entitled to appear before the
court on the
above date to defend the case and to state the reasons
why he should not be evicted, as well as his right to legal
representation.
It invited the first respondent to file an affidavit
that dealt with his personal circumstances, including whether the
property
was occupied by elderly or disabled persons, children, or
whether it pertained to a household headed by women. It also invited
the first respondent to deal with his right to housing, and whether
he would be rendered homeless and whether alternative accommodation
was or could be made available. The notice indicated that the above
information was necessary to assist the court in deciding whether
the
order should be granted.
[70]
It can hardly be said that the above
notice does not comply substantially with the requirements of section
4 of PIE. This is not
a matter involving a group of destitute and
disempowered respondents, where socio-economic circumstances render
them particularly
vulnerable to the litigation conducted by the
applicants. The first respondent is, by his own account, a
businessperson of considerable
experience and ability. He is legally
represented. Eviction proceedings have been pending since at least 25
March 2019, when Mr
Kriel’s attorneys indicated that their
client had cancelled the deed of sale and demanded that the first
respondent vacate
the property. This was followed shortly afterwards
by Mr Kriel’s action proceedings (subsequently abandoned) for,
inter alia
,
the eviction of the first respondent, which, in turn, was followed by
the applicants’ ill-fated earlier application proceedings
before Hartle J. For the first respondent to suggest that he has not
been afforded an opportunity to put all relevant circumstances
before
the court is simply not correct. No prejudice has been caused by the
applicants’ failure to have obtained the court’s
directions for the contents and manner of service of the section
notice. It would serve absolutely no purpose to issue such directions
at this stage.
[71]
The court has already found that the
first respondent no longer has any right to occupy the property. He
has enjoyed the continuous
use thereof without payment of rental,
rates, or service charges, notwithstanding the prescription of Mr
Kriel’s obligation
to repay the loan. This remained the
position after the registration of transfer on 28 July 2021, almost
two years ago. The applicants,
in contrast, have been compelled to
secure rented accommodation and the storage of household effects at
considerable cost. They
have lived in a state of limbo and
uncertainty. The emotional toll that this has had on them, as well as
their children, has never
been refuted. The second applicant has,
moreover, been unable to operate her legal practice properly.
[72]
The papers intimate that the second
applicant appears to have been involved in the conclusion of the
original business arrangement
between the first respondent and Mr
Kriel. The papers also suggest that both applicants were aware of the
dispute between the two
businesspeople and the potential risks
involved at the time of the purchase of the property. The overall
impression, however, is
that the conduct of the first respondent has
been far from reasonable and cannot escape criticism. He has allowed
the property
to fall into a state of neglect and disrepair,
obstinately refused access, and rendered very little cooperation in
attending to
as minor a problem as a water leak. Moreover, the
charging of an ‘inspection
in
loco
’
fee to
the first applicant for limited access to his own property on 4 April
2022, smacks of nothing less than cynicism.
Relief and order to be
made
[73]
Despite the applicants’
invitation to do so in the section 4(2) notice, the first respondent
has not placed any evidence before
the court that an eviction order
would affect any elderly or disabled persons who may currently reside
at the property. He has
not made mention of any children. Such
information is within the exclusive knowledge of the first
respondent. It cannot be expected
of the applicants to have attempted
to establish such details when the first respondent has consistently
refused access to the
property and acted in a hostile manner towards
them.
[74]
The first respondent has, moreover,
rejected the applicants’ offer of four months’ rental in
relation to alternative
accommodation, and the costs of storage.
Quite what more could have been expected of the applicants is hard to
say.
[75]
In the circumstances, the court is
satisfied that it would be just and equitable to order the eviction
of the first respondents
and any other occupiers from the property.
Mindful of the history of this matter, the respective circumstances
of the parties involved,
and the possibility that, at some point, the
vacation of the property would be necessary, it would seem just and
equitable that
the date for the implementation of the order is not
delayed for longer than required. The court is not of the view that
any conditions
need to be attached to the order.
[76]
The only remaining issue is that of
costs. There appears to be no reason why the usual order should not
follow to the effect that
the applicants are entitled to recover the
expenditure incurred in pursuit of their application.
[77]
The following order is made:
(a)
the application is granted and the
first respondent and all other persons occupying the property through
or under him are hereby
evicted from 28 Bonnie Doon Place, Bonnie
Doon, East London;
(b)
the first respondent and the above
persons are ordered to vacate the property within 60 days of the date
of this order;
(c)
if the first respondent and the above
persons fail to vacate the property as ordered, then the sheriff is
authorised and directed
to implement and give effect to the order
forthwith; and
(d)
the first respondent is ordered to
pay the costs of the application.
JGA LAING
JUDGE OF THE HIGH
COURT
APPEARANCE
For
the applicants:
Adv
S Collett
Instructed
by
Van
Rensburg & Associates
For
the respondents:
Mr
L Godongwana
Instructed
by
Godongwana
Ngonyama Pakade Attorneys
Date of hearing: 16
February 2023.
Date of delivery of
judgment: 25 April 2023.
[1]
Regulation 4(1) of the
Regulations
Governing the Administering of an Oath or Affirmation, published in
terms of GNR 1258 of 21 July 1972.
[2]
1973 (3) SA 734 (NC).
[3]
At 737. See, too,
S
v Msibi
1974
(4) SA 821 (T).
[4]
[2000] ZASCA 159
;
2001 (2) SA 232
(SCA).
[5]
At 239.
[6]
Ibid.
[7]
RC
Claassen,
Claassen’s
Dictionary of Legal Words and Phrases
(LexisNexis,
July 2022 – SI 25).
[8]
2015 (8) BCLR 904 (CC).
[9]
At paragraph [16].
[10]
2021 (6) SA 144 (WCC).
[11]
2014 (5) SA 562 (SCA).
[12]
At paragraph [12]. See,
too,
Boshoff
v Union Government
1932
TPD 345
;
Kommissaris
van Binnelandse Inkomste v Absa Bank Bpk
1995
(1) SA 653
(A);
Smith
v Porritt and others
2008
(6) SA 303
(SCA); and
Hyprop
Investments Ltd and others v NSC Carriers and Forwarding CC and
others
2014
(5) SA 406 (SCA).
[13]
Smith v Porritt
,
supra
n 12, at paragraph [10].
[14]
Brummer
,
supra
n 10,
a
t
paragraph [72],
per
Gamble J, writing for
the majority.
[15]
Smith v Porritt
,
op cit
.
[16]
Aon South Africa
(Pty) Ltd v Van den Heever NO and others
2018
(6) SA 38
(SCA), at paragraph [40].
[17]
Ekurhuleni
Metropolitan Municipality v Germiston Municipal Retirement Fund
2010 (2) SA 498
(SCA),
at paragraph [31].
[18]
Henderson v Henderson
[1843] EngR 917
;
(1843) 3 Hare 100
([1843-1860] All ER Rep 378), at 114-115 (Hare).
[19]
Brummer
,
supra
n
10, at paragraphs [26] to [29],
per
Wille
J, dissenting.
[20]
Petersen and another
v Gqosha and another
(EL
1281/2021) [2022] ZAECELLC 12 (9 June 2022), accessed on 17 April
2023 at
http://www.saflii.org.za/za/cases/ZAECELLC/2022/12.html
[21]
At paragraphs [30] to
[32], emphasis added, footnotes omitted.
[22]
At paragraph [35].
[23]
1957 (4) SA 234 (C).
[24]
At 235.
[25]
1984
(3) SA 623 (A).
[26]
At 634F-635C.
[27]
TJ Scott, ‘Lien’,
LAWSA
(LexisNexis, vol 26(1),
3ed, 2020), at paragraph 292.
[28]
See
United
Building Society v Smookler’s Trustees & Golombick’s
Trustee
1906
TS 623
, at 631;
Van
Niekerk v Van den Berg
1965
(2) SA 525
(A), at 538-541;
Brooklyn
House Furnishers (Pty) Ltd v Knoetze & Sons
1970 (3) SA 264
(A), at
270F; and
Goudini
Chrome (Pty) Ltd v MCC Contracts (Pty) Ltd
[1992] ZASCA 208
;
1993
(1) SA 77
(A), at 85E-F.
[29]
M Dendy, ‘Mortgage
and pledge’,
LAWSA
(LexisNexis, vol 29,
3ed, 2020), at paragraph 405.
[30]
Oertel v Brink
1972 (3) SA 669
(W), at
674A-B.
[31]
M Dendy,
op
cit
,
at paragraph 326.
[32]
DE van Loggerenberg,
Erasmus:
Superior Court Practice
(Jutastat
e-publications, RS 20, 2022), at D1-632H.
[33]
1950 (1) SA 655 (T).
[34]
At 658.
[35]
1983 (4) SA 850
, at
852A. See, too,
Windybrow
Theatre v Maphela and others
(2016)
37 ILJ 2641 (LAC), at paragraph [14].
[36]
2019 JDR 2252 (MN).
[37]
At paragraph [15].
[38]
2003 (1) SA 113 (SCA).
[39]
DE van Loggerenberg,
op
cit
,
at D9-1 to D9-3.
[40]
Ibid. The learned writer
observed that the Supreme Court of Appeal did not decide whether the
ultimate onus lay with the landowner
or the occupier. However, the
Constitutional Court held, in
Port
Elizabeth Municipality v Various Occupiers
[2004] ZACC 7
;
2005
(1) SA 217
(CC), at 235F-G, that, although it was incumbent on the
parties to make all relevant information available to the court,
technical
questions regarding onus should not play an unduly
significant role in the enquiry.
[41]
2012 (6) SA 294 (SCA).
[42]
At paragraph [25].
[43]
At paragraph [30].
[44]
2001 (4) SA 1222 (SCA).
[45]
At paragraph [20].