Summary of Judgment

1. Introduction

This judgment concerns an application for leave to appeal in the Gauteng Division of the High Court, Pretoria. The applicant, ERF 23 Magaliesig CC, sought leave to appeal to the Full Court of the division against the entirety of an earlier judgment and order granted on 29 April 2022.

The respondents were Firstrand Bank Limited (as first respondent) and the Sheriff, Sandton North (as second respondent). The application for leave to appeal was opposed by the first respondent.

The procedural history, as reflected in the judgment, is that the court had previously refused relief in which the applicant sought a declaratory order that a sale in execution of the applicant’s immovable property was unlawful and invalid, together with ancillary relief, alternatively that the sale be set aside. Dissatisfied with that outcome, the applicant brought the present application for leave to appeal.

The general subject-matter of the dispute, as it emerged in the leave application, concerned the lawfulness of a sale in execution of immovable property and, in particular, the relevance and application of Rule 46A (including the question of a reserve price) to property used as a residence, albeit registered in the name of a close corporation.

2. Material Facts

The judgment did not restate the full factual matrix in detail, noting that the “salient factual background” had already been captured in the main judgment and would not be repeated. However, the material facts that were expressly relied upon in this leave-to-appeal judgment were connected to the grounds advanced for leave and the competing submissions about Rule 46A, the reserve price, and the nature of the property.

It was treated as common cause that the immovable property in question was sold in execution without a reserve price. It was also stated that the property was sold below market value, with the contention (advanced in argument) that this caused irreparable prejudice to Ms Jacqueline Motshegwa.

In relation to occupation and use, it was recorded that, although the property was registered in the name of a close corporation, Ms Motshegwa was the sole member of the close corporation and the property was utilised for residential purposes, with Ms Motshegwa residing there together with two minor children.

A further chronologically relevant fact for purposes of the legal dispute was that Rule 46A came into operation before the sale in execution occurred, although (on the applicant’s version) it was not in place when the property was declared specially executable. This sequencing was central to the applicant’s contention that Rule 46A should have shaped the procedure at the sale stage, including the setting of a reserve price.

The judgment also recorded the emergence of later authority relevant to the debate: on 13 June 2022, the Supreme Court of Appeal decided Petrus Johannes Bestbier and Three Others v Nedbank Limited, which was invoked by the applicant in support of the proposition that the matter raised a compelling reason for an appeal to be heard.

3. Legal Issues

The central legal questions in the leave-to-appeal proceedings concerned whether the applicant satisfied the statutory test for leave to appeal under section 17(1) of the Superior Courts Act 10 of 2013.

Within that enquiry, the applicant’s grounds raised a cluster of interrelated questions about the application of Rule 46A, including whether the court had erred in treating the applicant’s reliance on Rule 46A as seeking retrospective operation, and whether Rule 46A—characterised by the applicant as procedural rather than substantive—should have governed the sale stage because it was operative at the time the property was actually sold.

In addition, the submissions traversed whether the protections associated with Rule 46A and the setting of a reserve price could apply where the property is owned by a close corporation (or, by extension in argument, a trust), but used as a primary residence by a natural person and minor children. This aspect implicated the application of law to fact, insofar as it required determining whether the relevant procedural protections were available on the facts presented.

The leave-to-appeal enquiry itself was primarily a value judgment guided by a statutory threshold—whether there were reasonable prospects of success on appeal, or some other compelling reason for the appeal to be heard—applied to the grounds advanced and the evolving case law referred to by the parties.

4. Court’s Reasoning

The court began by identifying the governing standard for leave to appeal in section 17(1) of the Superior Courts Act 10 of 2013, emphasising that leave may only be granted where the judge is of the opinion that the appeal would have reasonable prospects of success, or there is some other compelling reason for the appeal to be heard, including conflicting judgments.

In explaining the practical content of this threshold, the court relied on The Mont Chevaux Trust v Tina Goosen & 18 Others 2014 JDR 2335 (LCC), where it was held that the threshold for leave to appeal has been raised under the Superior Courts Act. The judgment highlighted the shift from the former formulation, which asked whether another court might come to a different conclusion, to the stricter statutory language that an appeal would have reasonable prospects of success. The court treated this as a more stringent standard than that under the repealed Supreme Court Act 59 of 1959.

Turning to the grounds advanced, the court recorded the applicant’s contention that there had been a misdirection in finding that reliance on Rule 46A entailed retrospectivity. On the applicant’s formulation, Rule 46A was not invoked to alter the earlier order declaring the property specially executable, but rather to require that, because the Rule was in force before the sale, the sale process should have complied with it, including the consideration of a reserve price.

The judgment also noted the respondent-facing submissions as they were presented in the leave application: that the sale without a reserve price was said not to comply with the decision referred to as Mokebe 2018 (6) SA 492 (GJ), and that the property was sold without a reserve price and below market value; furthermore, that although held by a close corporation, it was used as a residence by the sole member and minor children. At the same time, the judgment recorded the first respondent’s reliance on the Folscher judgment (cited as 2011 (4) SA 314 (GP)) for the proposition that immovable property owned by an entity such as a company, close corporation, or trust is not protected by the amended Rule requiring judicial oversight, and the assertion that this was also the finding in Mokebe.

A significant part of the applicant’s motivation for leave to appeal was that the Supreme Court of Appeal decision in Petrus Johannes Bestbier and Three Others v Nedbank Limited had considered whether Rule 46A applied where the property sought to be declared executable was owned by a trust and was the primary residence of trust beneficiaries. The applicant relied on this as a “compelling reason” and as supporting reasonable prospects that an appellate court might accept that residential property owned via an entity could nonetheless attract the protections associated with Rule 46A.

After considering the arguments advanced for the proposition that another court might take a different view, the court concluded that there was a reasonable prospect that another court would differ from the conclusion reached in the main judgment. On that basis, and applying section 17(1), the court held that leave to appeal should be granted, and further ordered that costs in the leave application should be costs in the appeal.

5. Outcome and Relief

The court granted leave to appeal to the Full Court of the Gauteng Division, Pretoria, against the whole of the judgment/order granted on 29 April 2022.

The court further ordered that the costs of the application for leave to appeal would be costs in the appeal.

Cases Cited

The Mont Chevaux Trust v Tina Goosen & 18 Others 2014 JDR 2335 (LCC).

Van Heerden v Cronwright & Others 1985 (2) SA 342 (T).

Acting National Director of Public Prosecutions v Democratic Alliance (unreported, Gauteng Division case no 19577/09, 24 June 2016).

Notshokovu v S (unreported, Supreme Court of Appeal case no 157/15, 7 September 2016).

Mokebe 2018 (6) SA 492 (GJ).

Folscher judgment 2011 (4) SA 314 (GP).

Petrus Johannes Bestbier and Three Others v Nedbank Limited (Supreme Court of Appeal, 13 June 2022).

Legislation Cited

Superior Courts Act 10 of 2013 (section 17(1)).

Supreme Court Act 59 of 1959 (referred to as repealed legislation for comparative purposes).

Rules of Court Cited

Uniform Rule 46A (referred to in the judgment as Rule 46(A)).

Held

The court held that, applying section 17(1) of the Superior Courts Act 10 of 2013, the applicant demonstrated reasonable prospects of success on appeal in the sense that another court would differ from the conclusions reached in the main judgment.

Leave to appeal was accordingly granted to the Full Court, and the costs of the leave application were ordered to be costs in the appeal.

LEGAL PRINCIPLES

The threshold for granting leave to appeal under section 17(1) of the Superior Courts Act 10 of 2013 is more stringent than the former test under the repealed Supreme Court Act, because the statutory language requires a conclusion that the appeal would have reasonable prospects of success, not merely that another court might reach a different conclusion.

Leave to appeal may be granted where the court is satisfied that the appeal would have reasonable prospects of success, or where there is some other compelling reason why the appeal should be heard, including the presence of conflicting judgments on the matter under consideration.

In evaluating leave to appeal, the court makes an evaluative determination based on the grounds advanced and the relevant legal context, including later authority relied upon by a party as supporting reasonable prospects or a compelling reason for appellate reconsideration.