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[2022] ZAECELLC 11
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Industrial Development Corporation of South Africa Limited v Calab Developers (PTY) Ltd and Others (16/2021) [2022] ZAECELLC 11 (31 May 2022)
NOT
REPORTABLE
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE CIRCUIT
LOCAL DIVISION, EAST LONDON)
Case No. 16/2021
In the matter between:
INDUSTRIAL DEVELOPMENT
CORPORATION OF SOUTH
AFRICA LIMITED
Applicant
and
CALAB DEVELOPERS (PTY)
LTD
First Respondent
SHERIFF, EAST LONDON
HIGH COURT
Second Respondent
PURPLE SUNSHINE
TRADING (PTY) LTD
Third Respondent
SOUTH AFRICAN BOARD
FOR SHERIFFS
Fourth Respondent
SIPUNZI ATTORNEYS
Fifth Respondent
REASONS IN RESPECT OF
RULING IN
APPLICATION FOR
INTERIM
INTERDICT PENDING PART
B
HARTLE J
[1]
On 19 November 2021 the
applicant issued out an application on an urgent basis (under the
same case number as a prior action issued
by the first respondent
against the third respondent and First National Bank) claiming the
following relief under PART A:
“
1.
That the Applicant’s non-compliance with Rule 6 of the uniform
rules be condoned and the forms
and service provided (for) in terms
of the Rules be dispensed with and the matter be disposed of as one
of urgency in terms of
Rule 6 (12)(a);
2.
That the writ of execution issued on 18 November 2021, against the
movable property, corporeal
and incorporeal, against the third
respondent be stayed pending the finalization and determination of
Part B;
3.
That the writ of execution against the third respondent dated 30
August 2021, in respect
of the Double Cab Isuzu Bakkies, white in
colour, with registration numbers JKK 828 EC/JFS 588 EC
[1]
and JFS 585 EC (“Motor Vehicles”); be stayed pending
finalization of Part B to be instituted, duly supplemented, within
21
days from the date of this order by the applicant.
Alternatively, should
the Motor vehicles have been sold at public auction:
4.
That the respondents be interdicted from passing transfer of
ownership and registration of
the motor vehicles described in the
notice of sale in execution dated 25 October 2021, more specifically
Double Cab Isuzu Bakkie
with registration number JFS 588 EC, held on
16 November 2021, under the above case number to any person, natural
or juristic,
pending the finalization of Part B to be instituted,
duly supplemented, within 21 days from the date of this order by the
applicant.
5.
that the application be referred for complaint for the conduct of the
second respondent to
the South African Board of Sheriffs in terms of
Section 44(1) of the Sheriffs Act 90/1986.
6.
That the application be referred to the legal practice council for
complaint against the
conduct of the fifth respondent.
7.
That the respondents, pay the costs of the application, on an
attorney and client scale,
jointly and severally, one paying the
other to be absolved, if so opposed. (
sic
)
[2]
The
relief which it indicated would ultimately be pursued under PART B
was for an order that “a writ of execution against
the third
respondent dated 30 August 2021, in respect of motor vehicles
[2]
be declared unlawful and set aside” (its interest in these
motor vehicles was based on the fact that they had been notarially
pledged to it by the third respondent as security pursuant to a loan
extended to it), that the “sales in execution”
(
sic
)
[3]
dated 27 September and 28 October 2021 in respect of the two motor
vehicles, held on 14 October 2021 and 16 November 2021 respectively,
be declared unlawful and set aside, and that “the respondents”
pay its costs on a punitive scale.
[3]
The
matter initially came before the duty judge on 23 November 2021 but
was struck off the roll because the papers were not in order.
[4]
[4]
A directive was issued
by my colleague permitting the applicant’s papers to be
supplemented and updated. The matter was re-enrolled
for hearing
before me. The issue of urgency was reserved for determination by the
court hearing the matter.
[5]
In a certificate of
urgency filed on behalf of the applicant dated 19 November 2021 it
was recognized that the first of the two
pledged motor vehicles had
already been sold in execution “around” 21 October 2021
in consequence of which the applicant
acknowledged that it had
already “lost its real right in respect of the first motor
vehicle”. The second motor vehicle
was set to have been sold in
execution on 16 November 2021. This sale too was acknowledged to have
happened already as was intimated
by the alternative relief prayed
for under Part A set out above, but the applicant hoped to stave off
its completion on the expectation
that “transfer and
registration should not yet be complete”. Counsel on behalf of
the applicant, Mr. Mathopo, lamented
that the applicant had been
unable to acquire a full set of the court papers in respect of the
judgment debt that had foregone
the attachment (in explaining the
uncertainty regarding the status of the second sale in execution) but
asserted that the anticipated
urgent application warranted “extreme
urgency consideration due to the immediate and permanent nature of
the transfer of
ownership, should it occur”.
[6]
Mr. Mathopo filed a
revised certificate of urgency after the matter was initially struck
from the roll insisting that the urgency
that had pertained at the
outset when the application was launched remained and asserted that
“the relief sought by the applicant
and the immediate relief is
alive and imminent”.
[7]
The following brief
background is relevant.
[8]
Calab Developers (first
respondent) had entered into a loan agreement with the third
respondent (Purple Sunshine) in March 2018.
As security for that
obligation Purple Sunshine had pledged the two Double Cab Isuzu motor
vehicles referred to in the applicant’s
prayers above (“the
vehicles”), to Calab Developers under two special notarial
covering bonds that were duly registered
with the Deeds Office in
2018 and 2019 respectively.
[9]
In
the first bond (BN 4360/2018) the two vehicles are vaguely described
in an annexure to the loan agreement as two in quantity
“Double
Cabs Isuzu” with a unit price valuation of “R 398 248.2”
(sic).
[5]
In the second special
notarial covering bond (BN 3748/2019) the vehicles are specifically
described by their make, model, further
asset description and more
importantly by their registration letters and numbers. The earlier
2017 model was referenced in this
regard as JFS 588 EC and the latter
2018 model as JFS 585 EC.
[10]
The
first respondent obtained a judgment in this court against Purple
Sunshine (the third respondent) in EL Case No. 16/2021
[6]
on 17 June 2021. It consequently issued a warrant of execution
against Purple Sunshine’s property to satisfy its judgment
debt
pursuant to which the sheriff (second respondent) evidently attached
the motor vehicles.
[7]
The motor
vehicle with registration letters and numbers JFS 585 EC was sold in
execution at a public auction on 14 October 2021.
The second vehicle
with registration letters and numbers JFS 588 EC was sold in
execution at a public auction on 16 November 2021.
[11]
On 16 November 2021 the
applicant’s attorneys addressed a letter to the sheriff
alluding to the sale of the last vehicle that
had happened that day,
asserting
inter alia
in this respect that:
“
2.4
My instructions are further to advise you that the said motor vehicle
sold in execution is owned and is the property
of my client in terms
of the Special Notarial Bond entered into between my client and
Purple Sunshine Trading 70 (Pty) Ltd.
3.
I have been instructed to demand from you that you do not pay over
the proceeds of the sale
in execution of the above motor vehicle to
the attorneys of the execution creditor. (Identified earlier in the
correspondence as
the fifth respondent)
4.
Counsel is currently finalizing an application to set aside the sale
in execution and to
interdict your offices from paying the proceeds
of the sale in execution to the attorneys for creditor until
finalization of our
application by the High Court.”
[12]
Evidently (and in my
view not unsurprisingly because of its confusing and vague content,
and the lack of any firm intimation that
the sheriff was being asked
to embark upon a formal process in terms of Uniform Rule 58 or what
basis existed to vitiate the sale
or render the sheriff’s
conduct in respect thereof subject to judicial scrutiny) this letter
evoked no response from the
sheriff.
[13]
It further emerged that
the applicant’s attorneys had on 12 November 2021, days before
the 16 November 2021 sale in execution
and in anticipation thereof,
also placed the sheriff, fifth respondent (acting on behalf Calab
Developers) and Purple Sunshine
on terms as follows:
“
Dear
Sirs
We refer to the Notice of
Sale in Execution dated 25 October 2021 attached herein for your
attention.
Please be advised of the
following:
1.
The Sheriff East
London, on the instructions of Sipunzi Attorneys, has attached and
intends to sell in execution a movable asset,
KB 2004 Isuzu Bakkie,
as described in the Notice of Sale in Execution;
2.
The
asset belongs to the IDC
[8]
and
is registered under the IDC’s Special Notarial Bond Number:
4360/2018,
[9]
attached herein
for ease of reference, and therefore cannot be sold in execution
without the IDC’s written consent;
[10]
3.
Please
regard in this correspondence as notice advising your offices that
the rightful title holder of the asset is the IDC;
[11]
and
4.
Should
your offices instruct the Sheriff to proceed with the sale of this
motor vehicle on 16 November 2021, the IDC will take legal
steps and
seek an adverse cost order.
[12]
Kindly confirm receipt of
this email and that the sale will not proceed.
We request this
confirmation before or on 15 November 2021, 12h00.
Please
note that the IDC’s rights remain reserved.
”
[14]
The sheriff replied
within minutes and indicated that it would be referring the
applicant’s attorney’s email to the
instructing attorney
(the fifth respondent) for their comment and reply.
[15]
The
applicant alleges however that the sheriff did not reply, yet it
failed to take the threatened steps by 15 November 2021 which
it had
intimated that it would in order to protect its interests in the
motor vehicle.
[13]
[16]
The first and fifth
respondents, in reply to the applicant’s allegation in its
founding affidavit that it had amply warned
the parties of the
applicant’s interest in the vehicle before the sale but that it
had flat out ignored its entreaties, replied
as follows:
“
AD
PARAGRAPH 17 THEREOF
8.
The contents hereof are noted. The deponent assert that in its
response thereto telephonically
to the 4
th
Respondent (sic)
[14]
it had
advised the sheriff that it (was) not persuaded by the allegations
claiming interest by correspondence but rather a proper
court process
should be instituted by whomsoever claiming interest over the
attached property, failing which the 4
th
Respondent may proceed with the sale in execution.”
[17]
It
is common cause that the applicant did not formally request the
sheriff to launch interpleader proceedings. It is also worth
mentioning that the special notarial bond referenced in the
applicant’s correspondence would not necessarily and with the
requisite specification required by the provisions of section 1 (1)
of the Security by Means of Movable Property Act, no 57 of
1993, have
identified the vehicle about to be sold in execution on 16 November
2021 as an especially hypothecated asset under the
bond warranting
the legal consequences contemplated by that section in respect
thereof.
[15]
[18]
The applicant also
picked up, from correspondence copied to it after the fact, that a
director of Purple Sunshine had alerted the
sheriff, on 13 September
2021 already, to the applicant’s interest in assets that had
been “tagged”, I assume
by the sheriff who had attached
these at the request of the fifth respondent acting on the
instructions of Calab Developers in
the execution process. It is not
clear from the correspondence relied upon by the applicant in the
application before me what was
sent as an email attachment to the
sheriff in this respect, but the director wrote as follows concerning
such attachment:
“
On
Monday, Sep 13, 2021 at 4.04 PM Pamela Bukashe-Nkukwana
<pamela@pst70.co.za˃ wrote:
Afternoon,
As discussed please
receive the attached. I will also be sending you the assets register
which confirms all the tagged items belonging
to IDC till our 40
million loan is paid up.
With thanks
Pam, Bukashe”.
[19]
It is evident that the
sheriff responded to this communication, within minutes, to convey
the fact that although the fifth respondent
had been copied in on the
email, the sheriff’s instructions were “to proceed in
terms of the warrant of execution”.
[20]
It is apparent that
Purple Sunshine did not share its concerns with the applicant at all
in this respect.
[21]
The
applicant relied on all of these interactions to suggest a collusion
between the fifth respondent (acting on behalf of Calab
Developers)
and the sheriff and a willful disregard and compromise of its
security rights in respect of the property of Purple
Sunshine
attached by Calab Developers in order to satisfy the judgment debt
which it had obtained against it. Further, apart from
vaguely
asserting some sort of conspiracy between Calab Developers and Purple
Sunshine by emphasizing that the order giving rise
to the judgment
debt had been obtained “by consent”, there was nothing on
the papers to plausibly sustain the kind
of “clandestine
collusion” contended for by the applicant.
[16]
[22]
Not
surprisingly - given the aspersion of misconduct on its part in
lawfully executing against the motor vehicle in question, Sipunzi
Attorneys who had carried forth the mandate of Calab Developers to
sell the motor vehicle in the process of executing the judgment
against Purple Sunshine (together with its client) opposed the
application.
[17]
Calab
Developers denied that it had acted unlawfully in executing against
the motor vehicles or that it had made itself guilty
of any collusion
with Purple Sunshine to defeat the applicant’s security over
either vehicle.
[23]
Calab
Developers further claimed to have been unaware of the applicant’s
interest in the vehicles at least until it was informed
on 12
November 2021 thereof. But even having been so informed of the
applicant’s special notarial bond, it did not consider
that it
was not entitled to proceed with the sale in execution on 16 November
2021. Indeed, there was nothing lawfully precluding
it from doing
so.
[18]
[24]
Additionally, it
rejected the notion that the matter was urgent, especially since the
sale in execution had run its course by the
time the application was
launched, and delivery of the vehicle had been taken by the bidder at
the auction sale. The applicant
failed to attach Annexure “NR3”
to its supplementary affidavit, but it is apparent from the averments
made on its behalf
in this respect that the Sheriff had produced a
vendor’s roll and an invoice on 16 November 2021 already,
suggesting an accounting
of the sale proceeds by that date. Evidently
the horse had bolted by then, so to speak, leaving the applicant
wanting only in respect
of a copy of an agreement of sale and proof
of transfer of the vehicle sold at the auction, neither which, as it
turns out, would
ultimately have availed themselves arising from the
process, given the nature of sales by public auctions.
[25]
Purple Sunshine, which
had in fact caused all the fuss, offered no resistance to the
application and the sheriff also kept his silence,
leading the
applicant to submit at the hearing that in the absence of any
challenge from the sheriff to the very serious allegations
against it
of collusion with Sipunzi Attorneys and its client, and of
purportedly serious flaws in the sale process, that it has
established its pleaded case on the papers and was entitled to the
relief sought against the sheriff at least.
[26]
Co-incidentally
the flaws relied upon did not impress upon me any suggestion that the
sale in execution of 16 November 2021 was
fatally flawed.
[19]
[27]
Even
assuming an awareness on the part of Calab Developers of an interest
by the applicant in the second Isuzu Cab by the time of
the sale by
12 November 2021, there was nothing precluding it from having made
the attachment of the vehicle in the first place
and instructing the
sheriff to proceed with its sale by public auction on 16 November
2021.
[20]
[28]
It
is not uncommon for the sheriff to “take instructions”
from a judgment creditor concerning whether the sale is to
proceed or
not, but once the sheriff proceeds with the sale he acts as an
officer of the law and is required to complete the process
to
finality.
[21]
[29]
The sheriff would have
been obliged to carry on with the sale of the movable property
attached subject only to a formal interpleader
application
interposing.
[30]
Uniform Rule 45 (7)(a)
provides as follows in this regard:
“
(7)
(a) Where any movable property is attached as aforesaid the sheriff
shall where practicable
and
subject to rule 58
sell it by public auction to the highest bidder after due
advertisement by the execution creditor in a newspaper circulating in
the district in which the property has been attached and after
expiration of not less than 15 days from the time of seizure
thereof.”
(Emphasis added)
[31]
Uniform Rule 58 in turn
provides as follows:
“
58
Interpleader
(1)
Where any person, in this rule called 'the applicant', alleges that
he is under any liability in respect of which he is or expects
to be
sued by two or more parties making adverse claims, in this rule
referred to as 'the claimants', in respect thereto, the applicant
may
deliver a notice, in terms of this rule called an 'interpleader
notice', to the claimants. In regard to conflicting claims
with
respect to property attached in execution, the sheriff shall have the
rights of an applicant and an execution creditor shall
have the
rights of a claimant.
[22]
(2) (a) Where the claims
relate to money the applicant shall be required, on delivering the
notice mentioned in subrule (1) hereof,
to pay the money to the
registrar who shall hold it until the conflicting claims have been
decided.
(b) Where the claims
relate to a thing capable of delivery the applicant shall tender the
subject-matter to the registrar when delivering
the interpleader
notice or take such steps to secure the availability of the thing in
question as the registrar may direct.
(c) ….
(3) The interpleader
notice shall-
(a) state the nature of
the liability, property or claim which is the subject matter of the
dispute; (b) call upon the claimants
within the time stated in the
notice, not being less than 15 days from the date of service thereof,
to deliver particulars of their
claims; and
(c) state that upon a
further date, not being less than 15 days from the date specified in
the notice for the delivery of claims,
the applicant will apply to
court for its decision as to his liability or the validity of the
respective claims.
(4) There shall be
delivered together with the interpleader notice an affidavit by the
applicant stating that-
(a) he claims no interest
in the subject-matter in dispute other than for charges and costs;
(b) he does not collude
with any of the claimants;
(c) he is willing to deal
with or act in regard to the subject-matter of the dispute as the
court may direct.
(5) If a claimant to whom
an interpleader notice and affidavit have been duly delivered fails
to deliver particulars of his claim
within the time stated or, having
delivered such particulars, fails to appear in court in support of
his claim, the court may make
an order declaring him and all persons
claiming under him barred as against the applicant from making any
claim on the subject-matter
of the dispute.
(6) If a claimant
delivers particulars of his claim and appears before it, the court
may-
(a) then and there
adjudicate upon such claim after hearing such evidence as it deems
fit;
(b) order that any
claimant be made a defendant in any action already commenced in
respect of the subject-matter in dispute in lieu
of or in addition to
the applicant;
(c) order that any issue
between the claimants be stated by way of a special case or otherwise
and tried, and for that purpose order
which claimant shall be
plaintiff and which shall be defendant;
(d) if it considers that
the matter is not a proper matter for relief by way of interpleader
notice dismiss the application;
(e) make such order as to
costs, and the expenses (if any) incurred by the applicant under
paragraph (b) of subrule (2), as to it
may seem meet.
(7) If an interpleader
notice is issued by a defendant in an action, proceedings in that
action shall be stayed pending a decision
upon the interpleader,
unless the court upon an application made by any other party to the
action otherwise orders.”
[32]
In this instance and
despite the communications addressed to the sheriff in respect of the
applicant’s interest in the motor
vehicle firstly by the
director of Purple Sunshine on 13 September 2021 and secondly by the
applicant’s attorneys on 12 November
2021, there is nothing in
such correspondence which beckoned him to have commenced such
proceedings, which process in itself would
have suspended the sale
from going ahead, and/or the proceeds from being paid to Calab
Developers.
[33]
Despite the provisions
of rule 45 (10) which dictate that where property subject to a real
right of any third person is sold in
execution such sale shall be
subject to the rights of such third person unless he otherwise
agrees, it is ostensibly through the
medium of the interpleader
process that the competing claims of Calab Developers (as execution
creditor in respect of its judicial
pledge) and the applicant (as
secured creditor with its established rights in terms of section 1 of
the Security by Means of Movable
Property Act, No. 57. of 1993 to the
motor vehicle) was required to have been determined. In other words,
the execution sale, without
any interpleader process interposing,
would not
per se
be rendered invalid simply because of the competing interests of a
third person contemplated by the provisions of rule 45 (10).
[34]
Mr. Mathopo conceded
that it had only occurred to the applicant that such a formal
interpleader process was necessary (and desirable)
when the matter
was argued before me. It was further suggested that I might order the
sheriff to conduct such a process, but not
only was there no clarity
of such a claim suggested to the sheriff by the correspondence in
itself, but the horse had clearly bolted
by then, so to speak, and in
my view the urgency had been lost to the applicant by the time the
matter was argued before me.
[35]
More
especially, the purchaser who bid for the vehicle at the auction
would have taken delivery of the vehicle at the sale. This
much is
evident from the processes for auction prescribed under the
Consumer
Protection Act, No. 68 of 2008
and the regulations promulgated
thereunder in respect of sales in execution.
[23]
[36]
It occurred to me by
the further warrant of execution dated 18 November 2021, the
execution of which the applicant also sought to
restrain, that the
execution sale of 16 November 2021 had still not yielded sufficient
monies to defray the costs of execution
and the judgment debt, hence
Calab Developer’s attempt at this point (after the 16 November
2021 auction sale) to attach
Purple Sunshine’s right, title and
interest under a Nedbank account for a balance of R89 765.45,
together with interest
and costs.
[37]
Since no correlation
between that attachment (if an attachment was made by the sheriff
pursuant to the issue of the writ) and the
applicant’s real
right or interest in the movables of Purple Sunshine generally was
established, I saw no compunction to
stay execution of this last
writ. Again, the forward trajectory after an attachment (if made by
the sheriff), could have been staved
off by formal interpleader
proceedings which would have had the same effect as an interdict
assuming the applicant had made out
a proper case for it, which in my
view it did not.
[38]
In the result after
hearing the parties’ submissions, I issued the following order:
“
[1]
The applicant has failed to make out a case for the relief
sought in
prayers 1 to 7 of its notice of motion under caption Part A.
[2] The applicant is to
pay the first and fifth respondent’s costs of opposing the
applicant’s claim under Part A.
[3]
Part B of the applicant’s claim remains extant for the
applicant to pursue, if so advised, on the ordinary opposed motion
court roll.”
[24]
B HARTLE
JUDGE OF THE HIGH
COURT
DATE OF HEARING:
7
December 2021
DATE OF REASONS:
31
May
2022*
*Reasons delivered
electronically on this date by email to the parties.
APPEARANCES
:
For the applicant:
Mr. T Mathopo instructed by Mngadi Attorneys c/o Bax Kaplan
Russel Inc., East London (ref. Mrs. Beetge
Magnus).
For the first and
fifth respondents: Mr. Kalimashe instructed by Sipunzi Attorneys,
East London (ref. Mr. Sipunzi).
For the second, third
and fourth respondents: No appearance.
[1]
There
appeared to have been uncertainty on the part of the applicant
regarding which vehicles were requested to be attached under
the
writ of execution dated 30 August 2021 and a suggestion that the
vehicle with registration letters and numbers JKK 828 EC
may have
been confused with the motor vehicle ultimately sold in execution on
16 November 2021 (JFS 588 EC) in which the applicant
claimed its
interest by virtue of a special notarial covering bond in existence.
According to the first and fifth respondents,
however, they managed
to attach a vehicle with registration letters and numbers JKK 828 EC
which the third respondent purported
to sell to Car Connections in
Nahoon, East London. This in fact suggests that a third Isuzu motor
vehicle was in the mix and
that the motor vehicle with registration
letters and numbers JFS 588 was probably attached under a different
warrant of execution
than the one relied upon by the applicant as
Annexure “FA9”.
[2]
See
footnote 1 above. The vehicle which was sold in execution on 16
November 2021 (JFS 588 EC) and which the applicant’s
interest
is founded upon is not at all referred to in the writ of execution,
the practical effect of which the applicant sought
to stay.
[3]
The
applicant was ostensibly referring to the notices advertising the
sales in respect of each of the two motor vehicles. Annexure
“FA
10” possibly applies although it merely refers to a “Double
Cab, Isuzu Bakkie.” Annexure “FA
12” self
evidently applies in respect of the intended sale of the second
motor vehicle (JFS 588 EC) which was set to take
place at 10h00 on
16 November 2021.
[4]
The papers
were still not quite in order by the time the matter appeared before
me. Pages were missing or the order in which
they were
arranged confused. Annexures referred to in emails were also
missing. The most important document, which would
have
evidenced an accounting to the first respondent of the proceeds from
the auction sale by the time this application was launched,
Annexure
NR3 to the applicant’s supplementary affidavit, was also not
included in the papers provided to the court for
the hearing. A
further anomaly (although I did not ask the parties to address this
aspect at the hearing) is that the application
was issued as an
interlocutory one under an original action between different parties
than those in the present matter.
[5]
Section 1
(1) of the Security by Means of Movable Property Act, No 57 of 1993
requires the movable property notarially hypothecated under
the
Act’s provisions to be “specified and described in the
bond in a manner that renders it
readily
recognizable
”
in order for it to be deemed to have been pledged to a mortgagee as
effectually as if it had been pledged and delivered
to the
mortgagee.
[6]
As
indicated elsewhere this is the case number of the action between
Calab Developers and Purple Sunshine.
[7]
Although no
warrant of execution is in evidence in respect of the motor vehicle
with registration letters and numbers JFS 588
EC, it appeared to me
to be totally implausible that the sheriff would have proceeded to
sell it without a warrant or an attachment
having been made under
such a writ. There is a reference in the sale notice to a warrant of
execution dated 19 July 2021 which
suggests that there may be an
additional writ in contention that did not surface in the papers
before the court.
[8]
Again, this
information is confusing, misleading, or plainly wrong.
[9]
This too is
incorrect and does not appear from the 2018 bond.
[10]
This is
also not correct except
vis-à-vis
the applicant and Purple Sunshine. Calab Developers would by then as
a judgment creditor have been vested with a real right under
a
judicial pledge conferring on it the right to have the motor vehicle
sold by the sheriff and to be paid from the proceeds at
least before
other unsecured creditors were paid. See Silberberg and Schoeman’s
The
law of Property
,
6
th
Ed, at par 17.3 and the footnotes cited there.
[11]
Strictly
speaking this statement is incorrect.
[12]
An
after-the-fact legal process was threatened rather than requesting
the sheriff to issue out an interpleader on the basis of
a competing
claim.
[13]
In Bokomo v
Standard Bank van Suid Afrika Bpk
1996 (4) SA 450
(C) the court held
that a notarial bondholder obtains real rights over bonded property
as if such property had been mortgaged.
In Lief NO v Dettman
[1964] 2 All SA 448
(A) the court observed that the only real rights
in favour of the mortgagee created by the registration of a bond are
rights
in respect of the mortgaged property, e.g., the right to
restrain its alienation and the right to claim a preference in
respect
of its proceeds on insolvency of the mortgagor. These real
rights, however, can only exist in respect of a debt, existing or
future, and it follows that they cannot be divorced from the debt
secured by them. In this instance the applicant seemed
to have
invoked the right to take possession of the property on the basis of
a bond breach by Purple Sunshine because of the
attachment and
alleged compromise or arrangement with its creditors, or on the
basis of its belief that’s its interests
under the bond were
in any way imperilled by any act or omission on the part of Purple
Sunshine. By the time the applicant learnt
of the impending auction
sale it should have asserted its rights under the bond (notably to
retake possession of the motor vehicle
inter
alia
and if necessary to have disposed of it) on the basis of the known
attachment. Its misguided belief that the harm would only
materialise once the bidder took possession and transfer of the
motor vehicle pursuant to the sale or that that was the outer
limit
by when it had to take steps to protect its interest under the
bond(s) was its own misfortune.
[14]
The
deponent clearly meant the sheriff, i.e., the second respondent.
[15]
I mention
this only to highlight what might have been in the sheriff’s
mind at the time when he had to make the decision.
A sheriff no
doubt often finds himself in the position where he is subject to
considerable risk in the discharge of his duties
but if he is
referred to a bond and on the face of it no risk is borne out by
proceeding with the sale in execution of a motor
vehicle bearing no
obvious connection or hypothecation thereunder, he ought to have had
no qualms in carrying out his duty prescribed
by section 43 (1) of
the Superior Court Act, no 10 of 2013 by executing on the warrant
and proceeding with the sale.
[16]
It can
hardly be suggested that Calab Developers, in exercising its real
right to proceed with the sale in execution pursuant
to the
attachment, even if it was informed that the vehicle was
hypothecated under a notarial pledge, acted fraudulently in
instructing the sheriff to proceed, or expecting him to proceed to
finality. By attaching the motor vehicle, it acquired a real
right,
known as
pignus
judicale
,
to the property. This entitled it, subject to the
qualifications set forth in section 43 of the Superior Courts Act,
to proceed with the sale in execution and to an entitlement to the
proceeds of the sale of the property. Dream Supreme Properties
11 CC
v Nedcor Bank Ltd and Others
2007 (4) SA 380
(SCA) at [14],[18],
[24] and [26].
[17]
The first
and fifth respondents were also at risk of having punitive costs
awards made against them if they did not oppose the
relief sought by
the applicant under Part A.
[18]
Dream
Properties,
Supra
,
at par [18].
[19]
As
indicated elsewhere the notice of the intended sale followed
pursuant to an attachment of the motor vehicle (presumably
predicated
on a writ dated 19 July 2021). I have also noted that the
description of the motor vehicle with registration letters and
numbers
JKK 828 EC was deliberate and possibly concerns a third
Isuzu motor vehicle belonging to Purple Sunshine. The notice of sale
dated 7 October 2021 was correctly criticized for being vague in
respect of the description of that motor vehicle but does not
appear
to be necessarily fatal. The suggestion that the sheriff sold the
same vehicle twice seems entirely implausible. Finally,
the
submission, not raised on the papers but during argument, that the
sale was vitiated by the absence of the sheriff serving
a notice of
attachment on the applicant in terms of Rule 45 (8) (b) is entirely
misplaced. The provisions of Rule 45 (8)
(b) apply to the
situation where the property sought to be attached is the
interest
of
the execution debtor
(not creditor) in the property pledged, leased, or sold under a
suspensive condition to or by a third person, as the case may
be.
(For this reason, par [30] of the Labour Court judgement relied upon
by Mr Mathopo in Griekwaland Wes Korporatief and others
v Sheriff
Hartswater Warren and others (Case no J 2404/05) cannot be correct
neither could it have provided a basis in my view
for the applicant
to successfully argue later that the sale
in
casu
fell to be set aside for want of service of the notice of attachment
on the applicant.)
[20]
Dream
Properties, Supra, at paras [14] and [18].
[21]
Sedibe v
United Building Society
1993 (3) SA 671
(T); Schoerie NO v Syfrets
Bank Ltd
1997 (1) SA 764
(D) 773; Mpakathi v Kghotso Development CC
2003 (3) SA 429
(W) par 8. See also section 43 (1) of the Superior
Courts Act, real with Rule 45 applicable in this case.
[22]
The
jurisdictional fact for the application of the rule is the existence
of adverse claims. Since the sheriff would have
been obliged
to carry on with the execution, the intimation that competing claims
existed with respect to the property attached
in execution which
required him to deviate from the normal procedure would had to have
been clearly outlined for him so as to
persuade him that he was
faced with two
prima
facie
valid and enforceable claims, or the threat of such claims, in
respect of the motor vehicle.
[23]
See
section 45
of the
Consumer Protection Act, No. 68 of 2008
read
together with the regulations promulgated thereunder in terms of
section 120
(1) of the CPA.
Consumer Protection Act
Regulations
,
Government
Gazette
34180
GN R293, 1 April 2011.
(Regulation 32
deals with the
disposal of motor vehicles by public auction).
[24]
In issuing
the order under paragraph [3] above, I recognized that the perceived
anomalies in the legal process underscoring the
sale might be real,
or the sheriff’s conduct possibly subject to review, or the
last writ of 18 November 2021 somehow justifying
an interpleader
going forward, hence this avenue was left open to the applicant to
still pursue, if so advised.