Brief Summary

Eviction — Locus standi — Applicant seeking eviction of respondent from property purchased at sale in execution — Respondent opposing eviction on grounds of alleged irregularity of sale and claiming ownership — Court determining locus standi of respondent to contest sale — Respondent lacking authority to act on behalf of company owning property due to absence of requisite resolution — Eviction order granted as respondent's occupation deemed unlawful and no valid basis for contesting ownership.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter was an application for eviction brought in the High Court of South Africa, Gauteng Division, Pretoria. The proceedings were framed as an eviction application under section 4(1) of the Prevention of Illegal Eviction from and of Unlawful Occupation of Land Act 19 of 1998 (PIE).

The applicant, Mr Jose Antonio Borges Nunes, approached the court in his capacity as the registered owner of the immovable property in question. The first respondent, Mr Phakama Mpumelelo Nkosi, opposed the eviction and remained in occupation with his family. The second respondent, the Ekurhuleni Metropolitan Municipality, was joined as the relevant local authority for PIE purposes.

The applicant had purchased the property at a sale in execution and became the registered owner upon transfer. After the first respondent refused to vacate voluntarily, the applicant instituted eviction proceedings in June 2017 and complied with the procedural requirements for notice and service under PIE, including service on the municipality. The first respondent resisted eviction primarily on the basis that he had launched (and asserted was still pending) proceedings to challenge the underlying default judgment and to set aside the sale in execution.

The general subject-matter of the dispute concerned whether the applicant, as registered owner, was entitled to an eviction order under PIE, and whether the eviction proceedings ought to be delayed pending the first respondent’s collateral challenges to the sale in execution and related processes, including the question whether the first respondent had locus standi to bring those challenges on behalf of a close corporation that had been the registered owner.

2. Material Facts

The court treated the following facts as material to its determination.

The applicant purchased the property at a sale in execution on 21 September 2016, and transfer into his name was registered on 15 February 2017. The sale in execution occurred pursuant to enforcement of a default judgment obtained on 13 May 2016 by Standard Bank of South Africa against Phakamole Trading CC, the registered owner at the time.

At the time of the sale in execution, the first respondent and his family were already in occupation, having occupied the property since 2010. The first respondent and his former wife, Ms Molebogeng Mbethe, held equal membership interests in Phakamole Trading CC. Ms Mbethe later vacated the property.

It was common cause that the first respondent refused to vacate without an eviction order. The applicant accordingly initiated PIE eviction proceedings, and the court recorded that the procedural requirements were met and that service occurred on both the first respondent and the municipality.

The first respondent alleged that the sale in execution was irregular and disputed the applicant’s ownership on that basis. He stated that he had launched an application on 7 July 2017 to set aside the sale in execution and contended it was still pending. He also stated that he had instituted rescission proceedings on 19 September 2016 in respect of the default judgment, but the procedural history later showed that the rescission application was withdrawn on 30 April 2018, and only the eviction application and the application to set aside the sale in execution remained.

A further procedural fact relied upon by the court was that the applicant delivered a supplementary affidavit attaching an affidavit by Ms Mbethe. In that affidavit, Ms Mbethe confirmed that there had been no resolution authorising the first respondent to institute proceedings on behalf of the close corporation to challenge the judgment or the sale in execution, and she confirmed that the first respondent lacked authority to do so.

The applicant disputed that the sale in execution was irregular and denied that Standard Bank was the purchaser, maintaining that he was the purchaser. The applicant also contended that the first respondent would not be rendered homeless because the first respondent owned another residential property (identified as Erf 241 […]), and further pointed to the first respondent’s alleged ability to earn substantial income. The first respondent relied on the fact that the property was his family home, occupied with two children and an elderly person, and contended that eviction would be prejudicial.

3. Legal Issues

The court was required to determine, first, a threshold question concerning standing and procedural validity, and then, contingent upon that, the substantive PIE enquiry.

The central legal questions were whether the first respondent had locus standi to institute (or maintain) an application to set aside the sale in execution on behalf of Phakamole Trading CC, and whether the eviction proceedings should be dismissed or stayed/suspended pending the finalisation of those collateral proceedings. This involved a mixed enquiry of law (the requirements for authorisation and standing to litigate on behalf of a juristic person) and the application of law to fact (whether the first respondent’s asserted capacity and conduct met those requirements).

A further central question was whether, on the facts before the court, it was just and equitable under PIE to grant an eviction order, including the appropriate date for vacating and authorisation for the sheriff to evict if necessary. This required the court to apply statutory standards to the circumstances of occupation and to make an evaluative judgment about fairness and equity, including considerations relating to vulnerability and the risk of homelessness.

An interlocutory procedural issue also arose: whether the court should accept the applicant’s supplementary affidavit containing the confirmatory affidavit by the former co-member, Ms Mbethe.

4. Court’s Reasoning

The court began by identifying that the first respondent’s opposition effectively sought to prevent the applicant from exercising ownership rights pending the finalisation of the first respondent’s challenge to the sale in execution. The court treated this as akin to relief of an interlocutory character, and held it was therefore critical to determine whether the first respondent had established a proper basis—particularly locus standi—to pursue the proceedings relied upon to justify delaying eviction.

On the issue of further affidavits, the court referred to the general principle in motion proceedings that affidavits serve as both pleadings and evidence and that an applicant must ordinarily make out its case in the founding papers. It nevertheless emphasised that the rule against introducing new matter in reply is not absolute and that a court has a discretion, in special circumstances, to allow further material. The court accepted the applicant’s supplementary affidavit because the locus standi dispute arose as a result of the first respondent’s answering affidavit, and because the additional affidavit from Ms Mbethe was directly relevant to clarifying whether the first respondent was authorised to litigate for the close corporation. The court considered that adjudication on all relevant facts justified exercising the discretion to admit the further affidavit.

Turning to locus standi, the court applied established principles that litigation instituted on behalf of a company (and, by extension, the prosecution of proceedings in the name or interests of a juristic entity) must be authorised, typically by resolution. The court highlighted that once authority is placed in issue, more than a bare assertion of authority is required, and that the “best evidence” is generally an affidavit from an appropriate official attaching the relevant resolution.

Applying these principles to the facts, the court found that the first respondent’s position in the set-aside application was internally problematic. He claimed to be the holder of 50% of the member’s interest in the close corporation, while also alleging in contradiction that he wholly owned it. The court reasoned that he could not “wholly own” the close corporation if he only held half of the members’ interests. In addition, the court held that he could not bring the set-aside application in his personal capacity because he was not the registered owner and not the judgment debtor against whom execution had occurred; the judgment debtor was the close corporation.

The court therefore concluded that, because the close corporation had two members with equal interests, a resolution from both members (or proper corporate authorisation) would be required for the first respondent to act on the close corporation’s behalf. The first respondent had not attached any such resolution and had not adequately alleged authorisation by the other member. The court then relied on Ms Mbethe’s affidavit, which expressly denied that any authority had been given and confirmed that she did not contest the judgment or sale in execution. On this basis, the court held that the first respondent lacked locus standi, and that this defect rendered the proceedings to set aside the sale in execution invalid.

Given that conclusion, the court held there were no valid pending proceedings that could justify delaying the eviction application. The court further reasoned that delay was in any event not justified because the first respondent had delayed launching the set-aside proceedings and had not shown “enthusiasm” to have them finally adjudicated. The court therefore rejected the first respondent’s request that the eviction proceedings be dismissed or suspended pending the finalisation of the set-aside process.

Having found no legitimate challenge to the applicant’s ownership and no lawful basis for continued occupation, the court turned to the PIE enquiry and placed the onus on the applicant to show that eviction would be just and equitable. The court considered that ownership and unlawfulness of occupation were established and no longer legitimately disputed. It further accepted the applicant’s asserted prejudice, including loss of rental income and the accumulation of levies and municipal rates.

The court then considered the first respondent’s personal circumstances as presented. While the first respondent asserted that he lived on the property with children and an elderly woman, he did not provide particulars such as the children’s ages, schooling circumstances, or the period needed to relocate. The court engaged with the argument advanced for the first respondent that PIE requires attention to the circumstances of occupation and the needs of vulnerable occupiers, and to the proposition that evictions leading to homelessness are generally not just and equitable, with the local authority’s role being important in such cases.

The court accepted the countervailing submission made for the applicant that the first respondent was not a destitute occupier and had another property registered in his name, and that he did not claim he would be rendered homeless or unable to obtain alternative accommodation. In that context, the court referred to the balancing purpose of PIE and the notion that an owner’s right to exclusive possession may be suspended where unlawful occupiers would otherwise be homeless, pending reasonable provision of alternative accommodation by the state or local authority. On the facts as presented, the court found that the first respondent would not be rendered homeless and that eviction was therefore not unjust or inequitable.

As to the eviction date, the court did not adopt the applicant’s proposed period of 30 days. Taking into account the period of residence and the presence of children (even though their circumstances were not clearly detailed), the court considered that a longer period would accommodate those needs. It accordingly fixed a period of 45 days to vacate, and authorised the sheriff to evict thereafter, subject to a 15-day period following service of a notice of intention to evict.

5. Outcome and Relief

The court granted the eviction application. It declared the occupation of the property by the first respondent and all other occupiers to be illegal, ordered their eviction, and interdicted them from remaining in occupation or continuing to occupy the property.

The first respondent and all other occupiers were ordered to vacate within 45 days from the date of the order. In the event of non-compliance, the sheriff (or deputy) was authorised, with the assistance of the South African Police Service, within 15 days of service of notice of intention to take necessary and reasonable steps to effect eviction and remove the occupiers’ belongings.

The court ordered the first respondent to pay the costs of the application on the attorney-and-client scale.

Cases Cited

Ganes and Another v Telecom Namibia Ltd 2001 (3) SA 615 (SCA)

Nunnerly & Co v Lipschitz 1925 WLD 58

Griffiths v Inglis (Pty) Ltd v Southern Cape Blasters (Pty) Ltd 1972 (4) SA 249 (C)

Mall (Cape) (Pty) Ltd v Merino Ko-operasie Bpk 1957 (2) SA 347 (C)

Business Partners Ltd v World Focus 754 CC 2015 (5) SA 525 (KZD)

Shepherd v Tuckers Land and Development Corporation (Pty) Ltd (citation not provided in the judgment text)

Botswana (Pty) Ltd v Sentech (Pty) Ltd 2013 (6) SA (further citation details not provided in the judgment text)

Poseidon Ships Agencies (Pty) Ltd v African Coaling and Exporting Co (Durban) (Pty) Ltd 1980 (1) SA 313 (D)

Dickinson v South African General Electric Co (Pty) Ltd 1973 (2) SA (further citation details not provided in the judgment text)

Cohen NO v Nel 1975 (3) SA 963 (W)

“Blue Moonlight” (full citation not provided in the judgment text)

Legislation Cited

Prevention of Illegal Eviction from and of Unlawful Occupation of Land Act 19 of 1998, section 4(1)

Rules of Court Cited

No rules of court were cited in the judgment text.

Held

The court held that the first respondent lacked locus standi to bring an application to set aside the sale in execution on behalf of the close corporation that had been the registered owner, because he held only 50% of the membership interest and produced no corporate resolution authorising him to litigate, while the other member expressly denied granting authority. This absence of standing rendered the purported challenge to the sale in execution invalid and incapable of justifying a stay of the eviction proceedings.

The court held further that, in the absence of a legitimate pending challenge to the applicant’s ownership, the applicant established ownership and unlawful occupation, and eviction under PIE was just and equitable on the facts. The court found that the first respondent had not demonstrated that eviction would render him homeless, particularly given the existence of another property registered in his name and the lack of evidence placing him within the category of vulnerable occupiers for whom homelessness concerns would ordinarily weigh decisively against eviction.

The court accordingly granted an eviction order with a structured timetable for vacating and enforcement, and awarded punitive costs on an attorney-and-client scale against the first respondent.

LEGAL PRINCIPLES

A litigant who seeks to institute or prosecute proceedings on behalf of a juristic person must establish proper authorisation, ordinarily by way of a resolution, and once authority is placed in issue, a bare assertion of authority is insufficient. The absence of locus standi is a fundamental defect that invalidates proceedings brought without proper authority.

In motion proceedings, affidavits serve as pleadings and evidence, and parties generally must make out their cases in the founding papers; however, a court retains a discretion to permit further affidavits where special circumstances exist and where doing so is necessary to ensure that the dispute is determined on all material and relevant facts, particularly where new issues arise from an opposing affidavit.

Under PIE, an owner seeking eviction must show that eviction is just and equitable. The enquiry involves balancing an owner’s common-law rights of exclusive possession against the circumstances, needs, and potential vulnerability of unlawful occupiers, with particular sensitivity to whether eviction will lead to homelessness. Where the occupier is not shown to face homelessness and no legitimate legal impediment to the owner’s rights exists, eviction is more readily found to be just and equitable, subject to an equitable period for relocation and orderly enforcement.

Nunes v Nkosi and Another (26552/2017) [2020] ZAGPPHC 225 (27 January 2020)