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[2019] ZAGPPHC 46
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Tapala and Another v Tlebetla and Others (89400/16) [2019] ZAGPPHC 46 (22 February 2019)
SAFLII
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Certain
personal/private details of parties or witnesses have been
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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO: 89400/16
22/2/2019
In
the matter between:
STEPHEN
TAPALA
1
st
APPLICANT
JOHANNA
TAPALA
2
nd
APPLICANT
And
LESIBA
JONNY
TLEBETLA
1
st
RESPONDENT
THE
MASTER OF THE HIGH COURT
2
nd
RESPONDENT
THE
REGISTRAR OF DEEDS
3
rd
RESPONDENT
THE
CITY OF JOHANNESBURG MUNICIPALITY
4
th
RESPONDENT
THE
DIRECTOR GENERAL
5
th
RESPONDENT
HUMAN
SETTLEMENTS
JUDGMENT
[1]
The applicants apply for an order declaring wrongful and/ or illegal
the sale and
subsequent registration in the names of the first
respondent of the property known as erf […..] (the property).
They seek
an order setting aside the transfer and registration of the
property, and declaring the first applicant to be the beneficiary of
the property. They further seek an order directing the fourth and
fifth respondents to provide the Court with a comprehensive report
regarding sales of state subsidised properties, the effect of non
compliance with section 10A(1) of the Housing Act 107 of 1997
(the
Housing Act) and
particularly whether Nkhwile Alpheus Moropo (the
deceased) who was the initial owner of the property had the authority
to sell
it to the first respondent. Finally, an order directing the
third respondent to cancel the title deed T56991/13 in favour of the
first respondent is also sought.
Background
[2]
The property was sold by the deceased,
(who had\ obtained title thereto in June 2006), to first applicant
and separately to first
respondent, without apparent compliance with
section 10A(1)
of the
Housing Act. The
deceased's title deeds
contained the condition that the property could not be lawfully
alienated within eight years of transfer
without the consent of the
relevant provincial housing department, and unless it had first been
offered to the relevant provincial
housing department.
[3]
The parties do not dispute that this did
not take place and that the property was sold to first respondent
within the eight year
period. The most recent deed of transfer
reflects that the property was sold and transferred to the first
respondent on 31
st
July 2013. As a result the deceased clearly did not have the
requisite authority to sell the property to the first respondent.
It
is conceded by the applicants that the sale to first applicant
likewise did not comply with
section 10A(1)
of the
Housing Act.
[4
]
This concession by the parties has
removed the need to consider whether the fourth and fifth respondents
should be directed to provide
any report pertaining to the sale of
state subsidized properties and the effect of non-compliance with
section 10A
of the
Housing Act.
[5]
Ms Steenekamp argued on behalf of the
applicants that the seller cannot transfer more rights than it has,
and the seller also had
no right to sell the property because of the
restrictions on sale contained in
section 10A
of the
Housing Act.
Secondly
it had been proved by the applicants that the sale of the
property to second applicant, whereas he had also sold the property
to
first respondent. As a result of the taint of fraud,
notwithstanding registration in the deeds office, the sale to first
respondent
resulted in being void
ab
initio
and it was argued that this
sale should be set aside by the Court.
[6]
It was further argued for the applicants that at the time of the sale
to the first
applicant, the property was not in the possession of the
deceased and it had therefore reverted back to ownership by the
province.
It was argued that if the first respondent's deed of sale
is set aside the property will revert to the relevant provincial
housing
department, and in the light of these non compliant sales the
provincial housing authority must make a determination of who the
rightful owner is.
[7]
Mr Ntsoane argued for the first
respondent that at all material times he was not aware of the sale to
any other party or disputed
ownership, and that the applicants bear
the onus of proving the sale was fraudulent, which they have failed
to do. He was entitled
to the property because it had be transferred
to him, and it had had never been transferred to the applicants. The
deceased had
never intended to defraud the first respondent and that
for this reason the sale should be upheld. The applicants are
benefitting
unlawfully from possession of the property and are
relying on a fraudulent sale. The abstract theory of transfer applies
to immovable
property and the requirements thereof had been
fulfilled in the sale. This theory states that there are two
requirements for ownership
to pass to the transferee. The first is
delivery which is effected by registration of transfer in the deeds
office. The second
is a real agreement whose main element is an
intention by the transferor to transfer the ownership and the
intention of the transferee
to become the owner of the property.
[8]
Further, it was submitted that the
applicants adopt a contradictory position in their application. In
their founding affidavit they
aver that the property was lawfully
sold to them but contrarily submit that in terms of
section 10A
of
the
Housing Act the
deceased was precluded from selling the property
to the respondent.
Prohibited
sales
[9]
Since there is no dispute that the
deceased had failed to comply with
section 10A(1)
of the
Housing Act
in
both sales, these were therefore prohibited, and therefore void.
The invalidity of the deed of sale is therefore established but
that
is not the end of the matter. It is still necessary to determine
whether the transfer is valid despite the invalidity of the
underlying sale.
[10] Ms
Steenekamp arguing for the applicants responded by referring to the
abstract theory of the
transfer of property, as set out in
Quartermark Investments (Pty) Ltd v Mkhwanazi
&
another
(768/2012) [2013] ZAS9 A 150 (01/11/2013), and submitted that the
first respondent could not rely on this a9proach to defend his
title
to the property. In
Quartermark
the court held that the
validity of a sale does not depend on the underlying transaction.
However, if the sale is tainted by fraud,
ownership will not pass
despite the registration of transfer.
[11]
The sale of the property to first
respondent was tainted by fraud. The deceased seller pleaded guilty
to fraud admitting to having
sold it to second applicant with intent
to defraud her, and he was convicted of fraud. His non disclosure of
this sale to the first
respondent was a material misrepresentation.
Fraud is defined by Snyman CR,
Criminal
Law
5
th
ed at 531 as follows:
"Fraud is the unlawful and intentional
making of
a
misrepresentation
which causes actual prejudice or which is potentially prejudicial to
another".
[12]
The sale to first respondent was clearly
based on an intentional misrepresentation by the seller, but for
which he would not have
entered into the sale. He states as much in
his answering affidavit:
"At all material times before the
transaction I was not aware and could not have been expected to be
aware of the sale between
the applicants and Mr Moropo (the
deceased).
I could not have proceeded with the sale should I have
been aware
in that this would have only meant that I will lo e
may hard earned cash and also be charged with fraud". (emphasis
added)
[13]
The deceased represented himself as the
owner of a property without disclosing that the property was
encumbered by claims arising
from another purchaser or .purchasers to
whom he had sold the property fraudulently. The deceased's
misrepresentations had the
potential of causing the first respondent
prejudice and shortly thereafter such prejudice indeed eventuated,
taking the form of
legal disputes over ownership and occupation with
the applicants.
[14]
In
Quartermark
Investments (Ply) Ltd v Mkhwnanazi and another
2014
SA 96
(SCA) the court affirmed the principle that ownership will not
pass despite registration of transfer, where the underlying
transaction
was tainted by fraud, or where the essential requirements
of the "real agreement" viz and intention on the part of
the
transferor to transfer ownership of the property, and on the part
of the transferee to become the owner thereof, were not met. The
court held as follows:
"[24] This court, in Legator
McKenna Inc
&
another
v
Shea &
others,
confirmed that the abstract theory of transfer applies to movable as
well as immovable property. According to that theory
the validity of
the transfer of ownership is not dependent upon the validity of the
underlying transaction. However, the passing
of ownership only takes
place when there has been delivery effected by registration of
transfer coupled with what Brand JA, writing
for the court In Legator
McKenna,
.
referred
to
as a
'real
agreement'. The learned judge explained that 'the essential elements
of the real agreement are an intention on the part of
the transferor
to transfer ownership and the intention of the transferee to become
the owner
of
the
property.
[25] As has already been
mentioned, a valid underlying agreement to pass ownership, such as in
this instance, a contract
of sale, is not required. However, where
such underlying transaction is tainted by fraud, ownership will not
pass despite registration
of transfer."
[15]
The sale to the first respondent was
tainted by fraud and ownership has not passed despite registration of
the transfer into the
name of the first respondent.
[16]
The Court has inherent powers implicit
from section 6 of the Deeds Registry Act to order the cancellation of
rights registered in
the D
eeds
Register Ex Parte Raulstone NO
1959
(4) SA 606
W and
lndurjith v Naidoo
973(1) SA 104 (D).
Ownership
of the property
[17]
Section 6 of the Deeds Registry Act
provides that upon cancellation of any deed conferring or conveying
title to land or any real
right in land other than a mortgage bond,
the deed under which the land or such real right in land was held
immediately prior to
the registration of the deed which is cancelled,
shall be revived to the extent of such cancellation and the registrar
hail cancel
the relevant endorsement thereon evidencing the
registration of the cancelled deed.
[18]
The deceased's title deed will however
not be revived by the cancellation of the first respondent's deed if
the property had, prior
to his death reverted to the provincial
housing department as is contended by the applicants.
[19]
Section 10A(3)
of the
Housing Act states
that:
“
When the
person vacates his or her property the relevant provincial housing
department shall be deemed to
be
the
owner of the property and application must then be made to the
Registrar of Deeds by
the
Provincial housing department for the title deeds of the property to
be endorsed to reflect the department's ownership
of
the property.”
[20]
There does not appear to be a real
dispute of fact regarding the issue of whether the deceased had
vacated the property when he
sold it to the second respondent. The
first respondent does not allege that he was in occupation. He
tentatively states in his
answering affidavit that
"upon
arrival at the property there was no one and he seemed to be the
owner."
Ownership is not
synonymous with occupation.
[21]
The applicants' founding affidavit
states that they occupied the property in 2006 after it was purchased
as a vacant stand, from
the deceased. In other words they were given
vacant occupation of the stand by the deceased. The deceased never
kept promises to
transfer the documents and eventually they could no
longer trace his whereabouts. Annexed to the founding affidavit is a
contract
of sale, valuation certificate and accompanying statement of
account all dating back to 2006 and 2007.
[22]
The applicants answering affidavit in
the eviction application under case number 3150/2016 in the
Magistrates Court for the District
of Ekurhuleni North held at
Tembisa, which is incorporated into the founding affidavit states the
same and refers to the erection
of an RDP house on the stand in 2013
which the applicants improved by adding three further bedrooms. After
receiving an eviction
letter from attorneys for the first respondent
in 2013 the applicants aver that they struggled to ascertain the
whereabouts of
the seller.
[23]
These averments by the applicants, are
baldly denied by the first respondent.
However
there is no suggestion that this issue could be referred to oral
evidence or evidence procured to prove the contrary.
I am satisfied
that notwithstanding the first respondent's denial of these
assertions the applicants have proved that they were
given vacant
occupation of the property by the deceased and were in possession of
it when it was purportedly sold to the first
respondent and first
respondent has not deposed to facts indicating that the deceased was
in occupation of the property when it
was sold to him.
[24]
As the deceased had vacated the property
at the time of sale to the first respondent, his ownership had lapsed
and the relevant
provincial housing department was the deemed owner.
An order setting aside the sale to the first respondent will result
in the
property reverting to the provincial housing as deemed owner
and application must then be made to the Registrar of Deeds by the
Provincial housing department for the title deeds of the property to
be endorsed to reflect the department's ownership of the property.
Determination
of beneficiary
[25]
The applicants seek an order that first
applicant be declared as beneficiary of the property, on the basis
that the sale agreement
between] the deceased and first applicant was
bona fide.
In
the light of the fact that the sale was both prohibited in terms of
the
Housing Act and
fraudulent, per the charges admitted it by the
deceased, cannot be described as a
bona
fide
sale. Any further basis for
declaring first applicant as beneficiary, has not been set out in
this application. The issue of beneficial
occupation is a matter that
can be taken up with the relevant provincial housing department.
Applications
for condonation
[26] The
applicants requested condonation for the late filing of their
replying affidavit and the
first respondent requested condonation for
the late filing of their answering affidavit. In both instances the
delays were attributable
largely to personal circumstances and
challenges. Correspondence from the first respondent's attorneys
indicated a willingness
to indulge the late filling of the first
applicant's replying affidavit, which was ultimately flied a few days
after the deadline
set by them. The first applicant did not oppose
the first respondent’s application for condonation but
challenged the factual
basis of this application. No prejudice will
result to either party if condonation is granted.
[27] Accordingly
condonation for the late filing of the answering and replying
affidavits is condoned.
I therefore make the following order:
a)
The
sale of the property known as erf [….] by the deceased
(Nkhwile Alpheus Moropo) to first respondent is declared unlawful
and
is set aside;
b)
The
third respondent is ordered to cancel the deed of transfer T56991/13
registered in favour of the first respondent, (Lesiba Johnny
Tlebetla
(identity number [….])) over erf [….], with four weeks
of the date of the service of this order in terms
of section 6(2) of
the Deeds Registry Act no 47 of 1937;
c)
The
first respondent is ordered to pay costs of the application.
A E ANDREWS
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
DATE
HEARD
:
4
th
February 2019
DATE
DELIVERED
:
22
nd
February 2019
For
the Applicants
:
ADV
STEENEKAMP
Instructed
by
LEGAL AID SOUTH AFRICA
PRETORIA OFFICE
PRETORIA
Tel: (012) 401 9200 ref MKSM
For
the Defendant
:
ADV
NTSOANE
Instructed
by
: K MONTJANE
INC ATTORNEYS
TEMBISA
Tel: (011) 026 0772. Ref: MONTJANE/EVl/T1/17