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[2021] ZAGPPHC 196
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Fulsome Properties (Pty) Ltd v Selepe and Others (14001/2021) [2021] ZAGPPHC 196 (6 April 2021)
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REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE NUMBER: 14001/2021
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED
DATE: 6
APRIL 2021
In the matter between
FULSOME PROPERTIES
(PTY)
LTD
APPLICANT
(Registration
Number:[…])
and
FIONA GONTSE
SELEPE
FIRST RESPONDENT
LENTSE INVESTMENTS
(PTY) LTD
SECOND RESPONDENT
(Identity Number:[…])
THE REGISTRAR OF
DEEDS, PRETORIA
THIRD RESPONDENT
JUDGMENT
DOSIO
AJ:
INTRODUCTION
[1]
This is an urgent application brought by Fulsome
Properties (Pty) Ltd (“the
applicant”). The application
is opposed by Lentse Investments (Pty) Ltd (“the second
respondent”). The first
and third respondents did not file a
notice to oppose.
[2]
The applicant initially sought relief as
incorporated in Part A,
B and C of the notice of motion, however the
applicant has now requested that part B and C be postponed.
The
relief sought by the applicant is as follows:
“
1.1.
Part
A – Urgent Interdictory Relief:
-
a)
To interdict and restrain the first and second respondents from
communicating
and
interfering
in any manner whatsoever with the applicant’s tenant/s residing
at the property situated at UNIT […] (SECTIONAL
TITLE SCHEME
NUMBER: […]), which is more commonly known as UNIT […],
[…] & […] STREETS, MUCKLENEUK
(‘unit […]’),
and the tenants situated at the property UNIT […] (SECTIONAL
TITLE SCHEME NUMBER: […]),
which is more commonly known as
UNIT […], […]STREET, […], […] (‘unit
[…]’).
b) An interdict prohibiting the
second respondent from taking transfer of the property situated at
unit […] pending
the outcome of Part B to the application.
c) An interdict
prohibiting the first respondent from transferring the property
situated at unit […] to
any other person pending the outcome
of Part B and C to the application.
d) An interdict restraining the
first and second respondents from continuing to deal or to trade with
unit […] or Unit
[…] in any respect, pending the
outcome of Part B and C to the application.
e) Compelling the second
respondent to return to the applicant a copy of the key set it
had made in respect of the property
situated at unit […]
f) The first and second
respondents be ordered to pay the costs of the urgent application on
an attorney and client
scale.
1.2.
Part B – Declarator
: -
a) To be postponed for the
determination of the rights of the parties in relation to the sale
and transfer of the property
situated at unit […] in the
ordinary cause.
1.3.
Part C – Application to compel Specific performance
: -
a)
To be postponed for enrolment in the ordinary course.”
[3]
The crisp question is whether the applicant’s right to
possession, use and enjoyment
of the property situated at unit 23
Jacqmar, trumps the rights of the second respondent in respect to the
same property.
BACKGROUND
[4]
The first respondent is the registered owner of the properties
situated
at unit […] and at unit […].
[5]
On 1 October 2020, the applicant entered into a written purchase
and
sale agreement in respect of unit […] with the first
respondent. The property was sold to the applicant for the purchase
price of R300 000.00. A deposit in the amount of R100 000.00 was paid
to the first respondent upon signature of the purchase and
sale
agreement. The balance of the purchase price, namely R200 000.00, was
to be paid to the first respondent against registration
of the
property into the name of the applicant.
[6]
On 4 October 2020, the applicant entered into a second written
purchase
and sale agreement with the first respondent in respect of
unit […]. The property was sold to the applicant for the
purchase
price of R165 000.00. A deposit in the amount of R65 000.00
was paid to the first respondent upon signature of the purchase and
sale agreement. The balance of the purchase price, namely R100 000.00
was to be paid to the first respondent against registration
of the
property into the name of the applicant.
[7]
In terms of both purchase and sale agreements, it was specifically
agreed that the applicant would be entitled to vacant occupation of
the properties as from 31 October 2020, from which date the
applicant
would be entitled to full beneficial use and enjoyment of the
respective properties.
[8]
The applicant effected payment of the two respective deposits in
the
sum of R100 000.00 and R65 000.00 to the first respondent
and performed its obligations in full. The applicant then
placed a
tenant in unit […] with effect from 1 November 2020 and
entered into a written lease agreement with the current
tenant on 13
November 2020.
[9]
On 18 January 2021 due to the first respondent’s failure to
furnish the applicant’s attorneys of record with the requested
FICA documentation, or to sign the form allowing the release
of the
bond cancellation figures, the applicant’s attorneys wrote a
letter of demand to the first respondent, requesting
her to remedy
her breach of the purchase and sale agreement within a period of 7
(seven) days. On 27 January 2021, the applicant’s
attorneys
wrote a further letter to the first respondent where she was advised
that due to her failure to remedy her breach of
the purchase and sale
agreement, the applicant would institute an application to compel
specific performance by the first respondent.
[10]
On 11 November 2020, the second respondent entered into an instalment
sale
agreement with the first respondent in terms of which the first
respondent sold the property situated at unit […] to the
second respondent.
[11]
In terms of the instalment sale agreement concluded between the first
respondent and the second respondent, possession, benefits and risks,
profit and loss in respect of the property situated at unit
[…]
would be given to the second respondent from date of registration of
the recordal of the agreement at the Deeds office,
which occurred on
10 February 2021.
[12]
On 1 March 2021, the second respondent’s attorneys
telephonically
contacted the applicant’s tenants to advise them
to vacate unit […]. The tenants were further advised by e-mail
that
the monthly rental was to be paid to the second respondent with
effect from 1 March 2021. On 11 March 2021 a representative of the
second respondent went to unit […] and took the keys from the
tenant to make a copy.
[13]
On 3 March 2021 the applicant’s representative advised the
second respondent’s
attorney that the second respondent was in
no position to demand rental from unit […] as the applicant
had purchased the
property from the first respondent. On 3
March 2021, the second respondent’s attorney in writing
informed the applicant
that they had concluded an instalment sale
agreement with the first respondent on 11 November 2020 and that the
instalment sale
agreement was registered and recorded in the Pretoria
Deed’s Registry on 10 February 2021.
[14]
On 12 March 2021, the applicant’s attorneys wrote a letter to
the second respondent’s
attorneys, demanding that they furnish
the applicant’s attorneys with a written undertaking by no
later than close of business
on 16 March 2021, that the second
respondent would stop dealing or trading with unit […] in any
respect. Secondly, that
the second respondent would stop interfering
or communicating with the applicant’s tenant and thirdly, that
the second respondent
would apply to the Registrar of Deeds to cancel
the endorsement registered against the title deed of unit […]
in favour
of the second respondent. Fourthly, the second respondent
was asked to return the copy of the set of keys in respect to unit
[…]
to the applicant.
[15] Due
to the failure of the second respondent delivering such an
undertaking, the
applicant then launched this urgent
application.
SUBMISSIONS BY THE APPLICANT
[16]
The applicant contends that there has been proper compliance with the
prerequisites
for an interdict as incorporated in Part A of the
notice of motion.
Prima
facie
right
[17] The
applicant contends that it concluded a purchase and sale agreement in
respect to unit […]
with the first respondent on 1 October
2020, which is more than a month prior to the conclusion of the
instalment sale agreement
between the first respondent and the second
Respondent. The applicant contends that it has placed proof of its
performance in terms
of the respective purchase and sale agreements
by annexing proof of the deposits paid to the first respondent. In
contrast, it
was argued that the second respondent has failed to
annex any such proof of its alleged performance in terms of the
instalment
sale agreement with the first respondent.
[18]
The applicant’s legal representative argued that in line with
the legal
maxim,
qui prior est tempore
potior est iure
, the applicant’s
right to possession, use and enjoyment of the property trumps that of
the second respondent, in that the
right of possession and vacant
occupation was transferred to the applicant on 31 October 2020,
whereas the possession and vacant
occupation of unit […] was
only transferred to the second respondent on 10 February 2021, which
is the date that the instalment
sale agreement was registered and
recorded in the Pretoria Deed’s Registry. Reference was also
made to the
nemo plus iuris rule
which stipulates that no person may transfer more
rights than they hold, and that due to the fact that the first
respondent transferred
the right of […] to the applicant, it
could not thereafter transfer the same right to someone else.
Irreparable
harm
[19]
The applicant contends that the second respondent acted unlawfully in
attempting
to deprive the applicant’s tenants of the use and
enjoyment of the property by trying to evict the tenants from unit 23
Jacqmar,
thereby exposing the applicant to a breach of its duty to
provide undisturbed use and enjoyment of the property to the tenant
as
required by the Unfair Practice Regulations to the
Rental Housing
Act no. 50 of 1999
. The applicant’s legal representative argued
that this was exacerbated by the second respondent’s refusal to
relinquish
the set of keys to the applicant.
[20]
The applicant contends that unless this Court grants the interdictory
relief sought,
the second respondent shall continue to attempt to
gain access to unit […] and to threaten the applicant’s
tenants.
The applicant contends that the second respondent attempted
to gain occupation of unit […] as far back as November 2020.
This is notwithstanding that in terms of the instalment sale
agreement the second respondent was only entitled to vacant
occupation
of unit […] from 10 February 2021, which is the
date of the recordal of the instalment sale agreement at the deed’s
Office.
[21]
Furthermore, as a result of the second respondent’s conduct,
the tenant has
not paid the applicant the rental due for the month of
March 2021 and the tenants have given notice to vacate unit […]
at
the end of March 2021. The applicant contends that the same
protection of a prohibitory interdict should be afforded to any new
tenant placed in occupation of unit […].
Balance
of convenience
[22]
The applicant contends that as a result of the fact that the second
respondent does
not have a right to possession of the property, owing
to the right of possession having already passed to the applicant,
this Court
should not even consider whether harm or the balance of
convenience comes into play in respect of the second respondent. The
applicant’s
legal representative contended that the second
respondent cannot claim to suffer prejudice where it is not, nor ever
was, in possession
of the property. By contrast, it was argued that
the applicant shall suffer severe prejudice as it has already placed
tenants in
the property under a valid agreement of lease.
[23]
The applicant contends it has suffered greater financial loss than
the second respondent
as it paid the first respondent a deposit of
R100 000.00 in respect of the sale of unit […], as
compared to the second
respondent who merely paid a deposit of
R65 000.00 to the first respondent. The applicant’s
legal representative
argued that the second respondent cannot contend
that it is prejudiced by reason of it being required to pay the
monthly bond,
levy and rates in respect of unit […], as the
second respondent itself bound itself to this obligation in the
instalment
sale agreement.
[24]
The applicant contends that there is a serious risk and possibility
that the second
respondent will pay 50% of the purchase price and
proceed to take transfer of the property, thereby thwarting the
applicant’s
rights in respect to unit […], arising from
the terms of the purchase and sale agreement entered with the first
respondent.
As a result, the balance of convenient favours the
applicant in interdicting the second respondent from taking transfer
of unit
[…].
No alternative relief
[25]
The applicant states it did everything it could to prevent further
interference by
the second respondent in respect to unit […]
arising out of the double sale, however, this proved fruitless and
the second
respondent persists in opposing this matter and to gain
access to the unit.
SUBMISSIONS BY THE RESPONDENT
[26]
Counsel for the second respondent argued that the second respondent
was
bona fide
in
its dealings with the first respondent and that the interdictory
relief the applicant claims must be dismissed as the applicant
has
not met all the necessary requirements.
Prima facie
right
[27]
The second respondent contends that the contention of the applicant
that the
existence of the “first” sale renders the
“second” sale to the second respondent void is not the
case as
confirmed in the case of
Gugu
and Another v Zongwana and Others
[2014]
1 All SA 203
ECM, (“
Gugu v
Zongwana
”
). It was argued further
that the second respondent obtained a limited real right to unit […]
by registration taking place
in the Deeds Office.
Irreparable harm
[28]
Counsel argued the only harm that the applicant would experience
would be a
loss of rental income and that this can be undone by the
award of damages.
Balance of convenience
[29]
The respondent’s Counsel contends that the balance of
convenience must
favour the second respondent because the second
respondent will have to continue to pay the bond, rates and taxes,
levies as well
as lose potential rental income. In addition, should
the interdict be granted the second respondent would be in breach of
its contract
with the first respondent.
[30]
Counsel contends that to date the following amounts have been paid,
namely,
R65 000.00 as a deposit to the first respondent; arrear
levies of R4403.00; R20 423.00 to First National bank (“FNB”),
(who is the bondholder and who granted consent to register the
recordal with the Deeds office). In addition, the second respondent
is contractually obliged to pay the bond of R3500 per month.
[31]
Counsel argued that if FNB is not paid, there is the real prospect
that judgment
may be obtained against the first respondent and the
property sold on execution to the detriment of all parties. It was
argued
that it would not be just and equitable to grant the interdict
as the second respondent would suffer more prejudice and that the
balance of convenience favours the second respondent.
No alternative remedy
[32]
Counsel argued that the applicant has a legal remedy, namely, a claim
for damages
that would adequately redress any monetary loss.
EVALUATION
[33]
It is trite that in order for a Court to grant an interdict in favour
of an
applicant, it must be satisfied that there has been proper
compliance with the prerequisites of an interdict, which are, (1) a
prima facie
right;
(2) a well-grounded apprehension of irreparable harm if the interim
relief is not granted, (3) that the balance of convenience
favours
the granting of an interim interdict; and (4) that the applicant has
no other satisfactory remedy.
Prima facie
right
[34]
The applicant is in possession and occupation of unit […],
whereas the
second respondent contends it has a limited real right by
virtue of the fact that it possesses a limited real right in respect
of the property, created by the recordal of the instalment sale
agreement against the title deed by the Registrar of Deeds.
[35]
The learned Van Zyl ADJP, as he then was, in the case of
Gugu v
Zongwana
(
supra
) stated at paragraph [32]:
“
The position
is however that the existence of a contract for the sale of a
specific property does not effect the validity of a subsequent
sale
of the same property by the same seller to a different purchaser. In
other words, the existence of an agreement for the sale
of a specific
thing does not prevent the creation of a competing personal right
ex-contractu
for the
delivery or the transfer of the same moveable or immoveable thing.
Consequently, ownership is generally not acquired by
the purchaser
whose contract was the earlier one,
but
by the purchaser who was the first to obtain delivery or transfer
without knowledge of the existence of the prior right of another
.”
[my emphasis]
[36]
In the matter
in casu
,
the applicant was placed in possession of the premises at unit […]
as from 31 October 2020. At this stage, the second respondent
had not
yet transacted with the first respondent and accordingly ownership at
this stage vested with the applicant, giving the
applicant a real
right in respect to this property. As at 31 October 2020, there was
also no competing purchaser as yet. The Court
in
Gugu
v Zongwana
(
supra
)
held further at paragraph [32] that where ownership has not yet
passed to any of the competing purchasers, the personal right
of the
purchaser who is first in time is given preference by application of
the maxim
qui prior ext tempore potior
est jure.
(see
Krauze
v van Wyk en Andere
1986 (1) SA 158
(A)
at 171 G-I and 173J).
[37]
As stated by the learned Van Zyl ADJP at paragraph [33]:
“
The
accepted approach to successive sales and competing rights is that as
a point of departure the possessor of the earlier right,
in this case
the appellants, is entitled to specific performance, unless the
second purchaser can show that the balance of fairness
is in his
favour. “... the priority of the competing claims had to be
decided in favour of the appellants according to the
qui
prior est tempore potior est iure
principle
unless
the respondent had raised special circumstances that would tilt the
balance of fairness in his favour
...”
(Per Brand JA in
Wahloo
Sand Bk v Trustees, Hambly Parker Trust
[2002
(2) SA 776
SCA] at 779A-B and 784F–G).” [my emphasis]
[38]
I do not find that the election of the second respondent to take over
the instalment
sale agreement, or paying towards the rates and taxes
and the outstanding levies raises such special circumstances that
cannot
be addressed in an action for damages against the first
respondent.
[39]
Even if I am wrong in this regard, the
nemo
plus iuris
rule stipulates that no
person may transfer more rights than they hold. The right to
possession, use and enjoyment was first transferred
to the applicant
by the first respondent by virtue of the purchase and sale agreement,
which entitled the applicant to possession
and occupation of the
property from 31 October 2021. In line with the
nemo
plus uiris
rule, because the right of
possession had already been transferred to the applicant, the first
respondent was therefore incapable
of passing the same right of
possession to the second respondent.
[40]
In the case of
Legator McKenna Inc and
Another v Shea and Others
2010 (1) SA
35
(SCA) the Court held that the transferor of ownership must be
legally competent to transfer the property. It is clear the first
respondent was not legally competent to transfer rights it no longer
had after the first sale agreement was concluded.
[41]
The effect of the recordal of the instalment sale agreement against
the title
deed as contemplated in terms of section 20 of the
Alienation of Land Act No. 68 of 1981 (“the Alienation of land
Act”)
will in any event have to be cancelled in terms of
s20
(1)(c) of the
Alienation of Land Act should
the Court determining
Part B and C find in favour of the applicant. The limited real right
which the second respondent possesses
is only in respect of the
further sale or encumbrance of unit […] and not in respect of
its right to possession of the property,
of which possession
currently vests with the applicant.
[42]
Even if I am wrong in this regard, and the second respondent does
possess a
real right in respect of the right to possession of the
property, it still cannot take the law into its own hands by
forcefully
gaining possession of unit […] where the
applicant’s tenants are in peaceful and undisturbed possession
of the said
property as a result of a valid and lawful transaction
entered into in good faith between the applicant and the first
respondent.
Irreparable harm
[43]
In determining the reasonable apprehension or the continuation of the
alleged
irreparable harm, the test is an objective test. As stated by
the learned Mogoeng CJ in the matter of
City of Tshwane
Metropolitan Municipality v Afriforum and Another
[2016] ZACC 19
at paragraph
[55]
:
“
Before an
interim interdict may be granted, one of the most crucial
requirements to meet is that the applicant must have a reasonable
apprehension of irreparable and imminent harm eventuating should the
order not be granted.”
[44]
The second respondent admits that it attempted to gain vacant
occupation of
the property since November 2020 and that it attended
the property on 11 March 2021 to obtain the keys of unit […]
in order
to make a copy. The measure of force, threat and
intimidation of the second respondent in doing so is disputed by the
parties.
[45]
Although Part B and C are to be postponed, the second respondent has
failed
to make any undertaking that it will not continue to interfere
with the applicant’s tenant and it appears that the second
respondent believes it is entitled to possession of the property, and
to any rental income emanating from the property. The second
respondent has also not relinquished the set of keys to the
applicant. Accordingly, it is clear that the irreparable harm to the
applicant will continue.
Balance of convenience
[46]
In determining the balance of convenience a Court must weigh the
prejudice
that the applicant will suffer if the interim relief is not
granted against the prejudice that the second respondent will suffer
if it is granted. It was stated by the learned Holmes JA in the case
of
Eriksen Motors (Welkom) Ltd v Protea
Motors, Warrenton and Another
1973 (3)
SA 685
(A) page 691C-G that the considerations of a
prima
facie
right, a well-grounded
apprehension of irreparable injury and the absence of an ordinary
remedy “are not individually decisive,
but are interrelated;
for example, the stronger the applicant’s prospects of success
the less his need to rely on prejudice
himself. Conversely, the more
the element of “some doubt”, the greater the need for the
other factors to favour him.”
[47]
The applicant’s right as the purchaser, who is first in time,
is given
preference by application of the maxim
qui
prior est tempore potior est iure.
The
applicant has placed tenants in […] on the basis of the terms
of the contract of sale entered into with the first respondent,
and
is entitled to possession and occupation of the said property, as
well as the rental income pending the determination of Part
B and C.
I find the balance of convenience favours the applicant. Should this
interdict not be granted the second respondent will
continue to
attempt to gain access to […].
No alternative remedy
[48]
The applicant wrote letters to the second respondent and did all it
could to
obtain the relief that it now seeks from this Court. The
second respondent on the other-hand, makes it clear in its opposition
of the matter, that it shall continue to attempt to gain vacant
occupation of the property in accordance with its belief that it
is
entitled to the property, as well as to the rental income and to take
transfer and to deal with and trade in the property, in
accordance
with the instalment sale agreement it entered with the first
respondent.
[49]
I find that the applicant and its tenants should not have to endure
further
interference by the second respondent or to surrender
possession of the property to it pending the decision in Part B and C
of
the notice of motion.
[50]
In such circumstances, and in line with the decision of
Gugu
v Zongwana
(
supra
),
the first purchaser, who in the matter
in
casu
is the applicant, has the right to
interdict the seller, namely the first respondent, from passing
ownership to the second purchaser,
namely the second respondent.
[51]
Due to the fact that the first respondent has exhibited a tendency to
enter
into an additional sale agreement with the second respondent in
respect to unit […], I find it necessary to interdict the
first respondent from doing the same in respect to the property
situated at unit […].
COSTS
[52]
The applicant sought costs of this application on an attorney and
client scale
against both the first and second respondent.
[53]
Due to the fact that the first respondent has not opposed this
application
I find a cost order is inappropriate. As regards the
second respondent, even though it opposed this application, it did so
because
of the belief that it had a rightful claim to unit [….].
I accordingly do no find that punitive costs are warranted in respect
to the second respondent and I order that costs be reserved pending
the determination of Part B and C.
ORDER
[54]
In the premises the following order is made:
1.
Part
A – Urgent Interdictory Relief
:
-
a)
The first and second respondents are interdicted and restrained from
communicating and interfering
in any manner whatsoever with the
applicant’s tenant/s residing at the property situated at unit
[…] (sectional title
scheme number:[…]), more commonly
known as unit […], situated at […] and […]
streets, […], and
the tenants situated at the property unit
[…] (sectional title scheme number: […]), which is more
commonly known
as unit […], […]street, […], […].
b) The first
respondent is interdicted from transferring the property situated at
unit […] to the second respondent, or to
any other person,
pending the outcome of Parts B and C to the application.
c) The first
respondent is interdicted from transferring the property situated at
unit […] to any other person pending the
outcome of Part B and
C to the application.
d) The first and
second respondents are interdicted from continuing to deal or to
trade with unit […] in any respect, pending
the outcome of
Part B to the application.
e) The second
respondent is ordered to return to the applicant a copy of the key
set it had made in respect of the property situated
at Unit within
24 (twenty-four) hours after receiving this judgment.
2
.
Part B – Declarator
:
-
Part B is postponed
for the determination of the rights of the parties in relation to the
sale and transfer of the property situated
at Unit […] in the
ordinary cause.
3.
Part
C
– Application to compel Specific performance
:
-
Part C
is postponed for enrolment in the ordinary course.
4. Costs in respect
to the second respondent are to be reserved pending the
determination of
Part B and C of the application.
D DOSIO
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
This
judgment was handed down electronically by circulation to the
parties’ and/or parties’ representatives by email.
The
date and time for hand-down is deemed to be 10h00 on 6 April 2021.
Appearances
:
On
behalf of the Applicant
Ms.
C.M Laurent
Instructed
by: SSLR
Incorporated
On
behalf of the Respondent
Adv.
C.M Rip
Instructed
by: Burden
Swart & Botha Incorporated