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[2019] ZAFSHC 162
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Nedbank Limited v Bohloko and Another (2488/2019) [2019] ZAFSHC 162 (12 September 2019)
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 2488/2019
In
the matter between:
NEDBANK
LIMITED
Applicant
and
TLADI JACOB
BOHLOKO
1
st
Respondent
THE SHERIFF OF THE
HIGH COURT,
BLOEMFONTEIN
2
nd
Respondent
JUDGMENT BY:
MHLAMBI
J,
HEARD ON:
08 AUGUST 2019
DELIVERED
ON:
12 SEPTEMBER 2019
MHLAMBI,
J
[1]
The applicant seeks an order in the following terms:
1. That the sale in
execution of the immovable property described as Erf […]
Heidedal (extension 20), district Bloemfontein,
Free State Province
in extant 341 square metres, held by deed of transfer No. 13466/2015,
also known as 9613 Grassland, Heidedal,
Bloemfontein be set aside;
2. That the second
respondent be permitted to hold a new auction for the property
described in paragraph 1 in accordance with normal
rules, procedures,
conditions and legislations pertaining to auctions after 10 day from
the date of the service of this order;
3. That the respondents
pay the costs of this application, jointly and severally only if
opposed.
[2]
On or about 29 September 2015, the applicant and a certain Mr Gift
Teboho Tsatsane concluded a written loan agreement in terms
of which
the said Mr Tsatsane acknowledged himself to be truly and lawfully
indebted to the applicant in the sum of R 617 000.00
being the
capital, together with interest thereon, and a further sum of R
154 425.00.
[3]
As security for the payment of the amount owing, the applicant
hypothecated as a first mortgage:
“
(Erf
[…] Heidedal, (extension 20), district Bloemfontein, Province
Free State, in extant 341 square meters, held by deed
of transfer
number T9513466/2015”.
Default judgment
was granted against the debtor, the said Mr Tsatsane, in favour of
the applicant on 13 April 2018. Subsequent to
the default judgment
having been granted, the applicant launched an application to declare
the immovable property specially executable.
In the founding
affidavit in support of such application, the court was requested to
set a reserve price of R 340 000.00;
in the alternative to
setting a reserve price, the court was requested to order the sale of
the immovable property without a reserve
price. The court elected not
to set a reserve price having considered the merits of the
application.
[4]
On 17 April 2019, the morning of the sale in execution, the
applicant’s attorneys of record sent an email to the second
respondent, requesting that a reserve price in an amount of R
430 000.00 on the property be set. Despite the email, the
property
was sold to the first respondent for the amount of R
234 000.00.
[5]
The applicant is of the view that its attorneys of record were under
the
bona fide
impression that the email, stipulating the
reserve price to the second respondent, was accepted by it and that
the auctioneer, in
line with their aforesaid letter, would ensure a
sale of the property at the requested reserve price. The following
submissions
and contentions were made on behalf of the applicant:
1. No reply was furnished
by the second respondent that the reserve price was accepted. The
second respondent had neither opposed
the application nor placed the
facts in issue;
2. A power of attorney
was never required in past auctions;
3. Previous informal
requests for the setting of a reserve price had been met and complied
with in the past;
4. The attorney was under
a
bona fide
impression that a reserve price would be set in
line with the letter to the second respondent;
5. The second
respondent’s summary of sales and conditions, clause 2.2,
provided for the cancellation of the sale if a
bona fide
error
was committed by either the attorney or sheriff;
7. The applicant and Mr
Tsatsane would be severelly prejudiced should the auction not be set
aside.
[6]
The application was opposed by the first respondent on various
grounds of which the following deserve mention for purposes of
this
judgment:
1. The applicant failed
to comply with Uniform Rule of court 31 and 42 and that once the High
Court had pronounced its final judgment
in regard to the application
for declaring immovable property executable, it became
functus
officio
;
2. The applicant should
have filed for leave to appeal against the order if so dissatisfied;
3. As the court had
exercised its discretion not to set a reserve price, the applicant
should have either applied in terms of Rule
49 read with Rule 31(4)
for the rescission of the order, alternatively, a variation of the
court order so as to include in such
an order, a reserve price;
4. The applicant should
have applied to court for the modification of the conditions of sale;
5. Consequently, an email
sent the morning before the auction was held, was insufficient to set
a reserve price as the court had
not done so.
[8]
In argument, the applicant’s counsel conceded that the
respondent had an arguable case. The relief sought was based on
an
alleged bona
fide
error
that occurred prior to the auction sale, in order to avoid an
“injustice”
[1]
for the property
to be sold at a fraction of its market price. The thrust of the
applicants’ case is set out in paragraphs
17 to 23 of the
founding affidavit, which read as follows:
“
17. I further
refer to page 10, paragraph 16.5 of the aforesaid application which
reads: “The applicant has determined a reserve
price of R
340 000.00 based on the percentage of the estimated market value
of immovable property, balance outstanding and
arrear rate per
annexure “F”; annexed to the said application.”
18. A copy of the
application pertaining to the aforementioned paragraphs thereof (sic)
are attached here too and marked as annexures
“
D1
to D11”.
The court however, in
its discretion elected not to reserve a reserve price after
considering the facts and merits of the aforementioned
application.
19. As alluded to
above the sale in execution of the property, previously declared
specially executable, was conducted and concluded
on 17 April 2019.
The nub of the applicant’s contentions for the relief sought
herein, are centralised around the events
that transpired on that
day.
20. The Applicant’s
attorneys of record, Matsepe’s Attorneys, 0n 17 April 2019, on
the same morning of the aforementioned
sale in execution, sent an
email to the 2nd respondent to set a reserve price in the amount of R
430 000.00 on the property
on request of the Applicant. A copy
of the email is attached hereto and marked as annexure “
E”.
21. The sale in
execution was initiated and conducted by the 2nd Respondent but held
and facilitated at the premises of Sheriff
West. I personally
attended the sale of execution on 17 April 2019 on behalf of the
Applicant to note and observe the proceedings,
in order to report
back to the applicant and obtain a copy of the conditions of sale.
Upon arrival at the auction, I was informed
by the 2nd Respondent,
that in order for me to bid on the property, a power of attorney
should be provided to me by the Applicant.
22. I was under the
bona fide impression that owing to the email sent to the 2nd
Respondent “setting” a reserve price
that no instructions
to bid were necessary and that the aforesaid letter sent via e-mail
would be sufficient in the circumstances
to ensure a sale of the
property at the requested reserve price.
23. At this juncture,
I pause to mention that our offices in the past have attended
previous sales in execution held by the 2nd
Respondent in terms of
the same terms and conditions for these auctions, without having to
provide a power of attorney as requested.
Similarly in the past our
office have in same way requested the setting of a reserve price
which has always been met and complied
with.”
[9]
Uniform Rule of
court
46A (8) (e)
empowers the court to set a reserve price when considering an
application seeking to execute against the residential immovable
property of a judgment debtor. In such an application or upon
submissions made by the respondent, the court must consider whether
a
reserve price is to be set. In deciding whether to set a reserve
price and the amount at which the reserve price is to be set,
the
court has to take certain factors into account
[2]
.
The execution creditor shall, not less than 35 days prior to the date
of the sale, prepare the conditions of sale, corresponding
substantially with form 21 of the first schedule, upon which the
attached property is to be sold, and shall submit such conditions
to
the sheriff conducting the sale for the purposes of settling them.
[3]
In addition to any
other terms, the conditions of sale shall include any conditions
ordered by the court.
[4]
[10]
Counsel for the applicant referred me to
Absa
Bank Ltd vs. Dennison Dixy Steven and 3 others
[5]
,
an unreported
decision in the Gauteng Division, Pretoria, where a sale in execution
was set aside on the basis that an administrative
clerk in the
employment on the banks’ attorneys, failed to furnish Absa Bank
with a statement of arrears and levies, thereby
causing the bank not
to make an informed decision in calculating its bidding price. This
case is, in my view, distinguishable from
the one at hand, in that it
referred to a
bona
fide
error
in the calculation of a bidding price.
in
casu,
the circumstances which obtained on the day of the auction, are
irrelevant as the auction proceeded in accordance with a court
order.
[11]
I was also referred to paragraph 59 of
Absa
Bank Ltd vs. Mokebe
[6]
and three
related matters. However, reference to this decision and the
particular paragraph do not assist the applicant’s
case in that
the said case referred to the imposition of more rigorous
investigative functions on a court faced with an application
for the
declaration of executability.
[12]
In
Absa
bank v Mokebe
[7]
,
it was stated
[8]
that
“
it
is therefore necessary for a court to determine whether a reserve
price should be set based on all the factor placed before it
by both
the creditor and the debtor when granting an order declaring the
property to be especially executable. If a debtor fails
to place
facts before the court despite the opportunity to do so, the court is
bound to determine the matter without the benefit
of the debtors
input. We cannot stress enough that this matter concerns and applies
only to those property which are primary home
of debtors who are
individual consumers and natural persons. Rule 46A(8)(e), in
operations since December 2017, now empowers the
court to set a
reserve price for the property at sale in execution. It would, in our
view, be expedient and appropriate to general
order a reserve price
in all matters, depending on the facts of each case…”
It
was further stated
[9]
“
We are
of the view that setting a reserve price would depend on the facts of
each case. Some facts may indicate that the debt is
so hopelessly in
access of the value of the property that the reserve price would be
irrelevant compared to the value of the property
but yet, if the debt
is not satisfied by the proceeds of the sale of the property, a
debtor still remains liable for any balance
after realisation of the
property. In all the circumstances a reserve price should be set in
all matter where the facts indicate
it. It will not be possible to
set out a numerus clausus of factors to be considered in each case as
the reserve price will depend
on the facts of each individual
matter…”
[13]
The application is based on the events of the day the auction was
held and no reference whatsoever is made to the court order
which
gave rise to the auction. This order is not challenged and therefore
remains effective. It cannot be said that the sheriff
acted
incorrectly. His conduct was in compliance with the court order to
sell the property without a reserve price, in line with
the
conditions of sale. The sheriff was therefore justified in ignoring
the email as it was not a condition of the sale. In the
circumstances, the application must fail for lack of substance.
[14]
The costs should follow the event.
[15]
In the circumstances the following order is issued;
The
application is dismissed with costs.
_____________
MHLAMBI,
J
Counsel
for the Applicant: Adv. Ploos Van Amstel
Instructed
by: Matsepes Incorporated
26/28
Aliwal Street
Bloemfontein
Counsel
for Respondents: Mr. P Peyper
Instructed
by: Peyper Austen Inc
39
C First Avenue
Westdene
Bloemfontein
[1]
Para 4.1:
Applicant’s Heads of Argument
[2]
Rule 46A(9)(a) and (b) of the Uniform Rules if Court
[3]
Rule 46(8)(a)(i) of the Uniform Rules of Court
[4]
Rule 46(a) of the Uniform Rules of Court
[5]
2152/2001
[6]
2018 4 All SA 206 (GJ)
[7]
supra
[8]
Paragraph 59
[9]
Paragraph 62 of the said judgment