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[2018] ZALMPPHC 3
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Bhyas Investments (Pty) Ltd v I E Bhayat Property Holding Company (Pty) Ltd and Others (2398/2016) [2018] ZALMPPHC 3 (7 February 2018)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE
NO: 2398/2016
Reportable:
Yes
Of
interest to the judges: Yes
Revised
7/2/2018
In
the matter between:
BHYAS
INVESTMENTS (PTY)
LTD
APPLICANT
REGISTRATION
NO.: 1984/005396/07
and
IE
BHAYAT PROPERTY HOLDING COMPANY (PTY)
LTD
FIRST
RESPONDENT
REGISTRATION
NO.: 1979/004626/07
BOTHA
HORAK
INC
SECOND
RESPONDENT
HAASBROEK
& BOEZAART
ATTORNEYS
THIRD
RESPONDENT
THE
REGISTRAR OF DEEDS
(PRETORIA)
FOURT
RESPONDENT
JUDGMENT
SUMMARY:
- Where an immovable property is transferred
based on a valid Power of Attorney from the seller, purchaser
acquires ownership thereof
irrespective of whether the deal of sale
is valid or not - abstract theory applies - delivery passing transfer
and real intention
to pass transfer of ownership and acquire
ownership, necessary -
In
casual system of transfer, a valid
causa
for transfer of
ownership is a
sine quo
non - real intention of parties
required to pass ownership.
PRINCIPLE:
a manifest defect in the Power of Attorney
e.g. fraud forgery cannot pass a valid transfer of ownership -
Furthermore,
a vindicatory claim based on ownership of a thing, not a debt within
the meaning of the
Prescription Act, 1969
.
In
casu,
applicant's claim, not a "debt" and cannot
become Prescribed. Held, application for re-registration and
re-transfer of
the property succeeds with costs.
M.G
PHATUDI J:
[1]
INTRODUCTION:
This
application is one in which the Applicant seeks a declaratory order
in the following terms:
1.1
An Order declaring the registration of transfer
of the immovable property more fully described as Erf 6474KS Piet
Potgietersrus
(Mokopane) Limpopo ("the property") in the
name of the First Respondent on 21 April 1998, to be declared null
and void,
ab initio;
1.2
That, on the granting of the order , the First to
Fourth Respondents be ordered to sign all necessary documents and
take such steps
as are required in giving the return and re-transfer
of the property into the Applicant's name;
1.3
That the Sheriff of the High Court (with
jurisdiction ) be authorized and empowered to sign such documents and
take such steps on
the parties' stead, in giving effect to 1.2 above,
in the event of the Respondents failing to comply with the order as
set out
in 1.2 above;
1.4
Further that, the costs be awarded in Applicant's
favour should it be successful. The application is opposed by the
First Respondent
only, with the Second, Third and fourth Respondents
not having filed opposing papers.
FACTUAL
BACKROUND:
[2]
In or during the year 1996, the Applicant went through financial
distress. He owed various creditors including his brother Ismael
Essop Bhyat, the past director and shareholder of the First
Respondent, an amount of roughly Seven Hundred Thousand Rand (R700
000.00). The various debts were however, considerably reduced and
finally settled, during 1997 with the first Respondent being
the
remaining creditor. His brother Ishmael Essop Bhyat had since died in
2006. The applicant had been indebted to his late brother
since 1997
in the amount of Seven Hundred Thousand Rand (R700 000.00).
[3]
It appears that the Applicant together with three (3) other
co-tenants , presently occupy a portion of certain commercial
property
for trading purposes. The property depicts registration in
the First Respondent's name which registration was apparently
effected
on 21 April 1998
[1]
.
This property better known as Erf 6474KS, Limpopo, is held under Deed
of transfer T77169 of 1998 under the First Respondent's
name
according to the windeed attached to Applicant's founding affidavit
("FA"). The property was purchased on 28 November
1998 for
an amount of Four Hundred Thousand Rand (R 400 000.00).
[4]
The Applicant in 1996 on account of his indebtedness to his late
brother, (Ismael Essop) handed his original tittle deed in
respect of
the said commercial property to him for safe keeping. The
understanding according to the parties'verbal agreement was
that he
would collect all rentals due by the tenants on the property until
his indebtedness to him became extinguished, alternatively
or that he
is fully paid, where after he would restore possession of the
original tittle deed to Applicant. Part the of rental
collected would
be used to defray municipal services costs rendered to the property
and set-off the difference collected from rental
proceeds towards
reduction of the debt due by him. This arrangement had been place
since 1996 where the first Respondent collected
about R9 500.00
monthly rentals.
[5]
On making inquiry as to the extent of his current indebtedness to him
during 2004 , regard being had to the capital debt that
has already
been liquidated and reduced to approximately R300 000.00 in addition
to the collected rental, it appears that no straight
figures were
provided to the Applicant , thus leaving him at sixes and sevens.
[6]
Upon his brother's death in 2006, the Applicant approached the
deceased's son Ashraf with similar inquiries, but to no avail.
Ashraf
had since undertook to investigate the matter and furnish a report to
the Applicant which he failed to do.
[7]
On further investigation, the Applicant in May 2013, first became
aware or acquired knowledge that the property was transferred
and
registered into the name of the First Respondent. As already
indicated, the actual transfer and registration thereof was effected
on 21 April 1998.
[8]
The investigation further revealed that the only documents in custody
of the Fourth Respondent were a copy of the title deed
referred to,
and a Power of Attorney to pass transfer in favour of one Heinrick
Reinecke dated 16 January 1998. In terms of this
instrument, it was
signed by the Applicant authorizing transfer of the property in
favour of the First Respondent, for a purchase
price of R400 000.00.
Copies of the relevant documents are annexed to the "FA"
[2]
.
[9]
The Applicant denies having signed the alleged Power of Attorney to
pas transfer. His denial is, in the main, that he did not
sign the
alleged power of attorney authorizing transfer . Applicant contended
that the Power of Attorney referred to was fraudulently
authorized as
it had no signature of his. The signature on the document purporting
to be his signature is fraudulent. These facts
were drawn to Ashraf s
attention in order to persuade him to restore ownership of the
property.
[10]
In order to strengthen his case, the Applicant on 25 May 2013
employed the services of a forensic hand-writing Expert to make
its
findings on the geniuness or otherwise of his original signature in
various documents, including the controversial Power of
Attorney, for
comparison purposes.
[11]
According to the hand-writing Expert's report dated 29 May 2013, the
conclusion was that there were dissimilarities in individual
characteristics quiet significant, and that the signature on the
document was not that of the Applicant.
[12]
It was this alleged fraudulent transaction that actuated the
Applicant's attorneys in a letter dated 14 April 2016, addressed
to
the directors of the First Respondent, to seek restoration of
transfer and ultimately re-possession of the property in the
Applicant's name. In response thereto through its Attorney's letter
dated 20 April 2016, the First Respondent merely denied any
alleged
fraud in respect of the transferred property without providing
further details. This, in Applicants ' view, constituted
a bare
denial.
[13]
For the reasons stated above, the Applicant proceeded to launch the
present application.
[14]
The question that calls for determination really is whether the
Applicant intended to effect transfer and registration of ownership
of the property into the First Respondent's name.
[15]
In order to adopt a lucid approach for proper adjudication in this
matter, I consider it appropriate to set out briefly the
common cause
facts, namely:-
15.1.
The Applicant is Bhyas Investments (Pty) Ltd,
duly represented by Mr A.S Bhayet ("Abdool") as its
co-director and shareholder;
15.2.
The First Respondent is 1.E Bhyat Property
Holdings Co. Ltd. Abdul's brother (Ismael now deceased) was the
erstwhile director and
shareholder of the First Respondent
15.3.
During 1996, Abdool was trading under insolvent
circumstances owing several creditors, including the late Ishmael in
the region
of R700 000.00.
15.4.
Prior to his technical insolvency, Abdool owned a
certain immovable property better described as Erf 6474 KS, Limpopo
registration
division, Mokopane. ("the property').
15.5.
As part of a repayment plan, the parties agreed
and arranged orally as to how to restructure a way to reduce and
finally settle
the principal debt in question. In addition, Abdool
handed the original title deed of his property to Ismael. Ismael
passed on
in 2006 while the debt was still due, owing and payable to
him.
15.6.
In or during May 2013, the Applicant first
acquired knowledge of the alleged illicit transfer of his property in
the First Respondent's
name. The property was however, actually
transferred in the Fourth Respondent's office (deeds office) on 21
April 1998.
15.7.
On discovering the transfer and on enquiry at the
deeds' office, the only paper trail traced was a copy of the title
deed No.: T4/665/89
as well as a Power of Attorney to convey transfer
dated 16 January 1998, purportedly signed by Abdool on behalf of the
Applicant
for the purchase price of R400 000.00
15.8.
The First
Respondent does not deny emphatically the alleged fraud or forgery on
the alleged document, the purported Power of attorney
in its
answering affidavit as disputed by the Applicant.
[3]
("AA")
15.9.
Furthermore, there is no denial that the
Applicant never appointed any conveyancer to initiate transfer of the
property into the
name of the First Respondent.
[16]
The First Respondent in resisting the application raised primarily
two issues, namely, material factual dispute on ownership
and
extinctive prescription of the claim since transfer. I shall proceed
to deal with the issues separately as I consider the applicable
legal
framework on the matter. First, I focus attention on the possible
defences raised by the First Respondent.
[17]
It was submitted on behalf of the First Respondent that because of
the foreseeable disputes of facts, application proceedings
were
inappropriate. At the hard core of the dispute, was the alleged fraud
on the Power of Attorney authorizing transfer. It was
further
contended that fraud to sustain, it must have been established with
certainty. Furthermore, even if the signature affixed
on the Power of
Attorney was not authorized, that fact alone does not import the
existence of fraud, so the submission went.
[18]
I find myself at variance with these submissions. For a proper
transfer of an immovable to take place, certain pertinent
requirements
must first be met
inter alia
the
following:
18.1.
The parties or their duly authorized agents must
have entered into a written deed of purchase and sale, signed by them
or their
duly authorized representatives. It is trite that every
contract in order to be lawful, binding and enforceable, requires the
requisite
intention of the parties to contract, both by the seller
and purchaser.
In
casu,
it is
not in dispute that the property had been" sold by PRIVATE
"
TREATY on the 28 November 1997, for the sum of R400 000.00
[4]
which has been duly secured.
[19]
The Applicant, disputed the signature on the Power of Attorney to
pass transfer.
[20]
Absent a written memorial of the contract between the parties, which
in transactions involving the purchase and sale of immovable
property
is a pre-requisite, the First Respondent cannot, in my view, be heard
or argue that there exists a lawful contract to
convey transfer and
registration in favour of the First Respondent.
[21]
A duly authorized conveyancer would on receipt of a written deed of
sale, where necessary, accompanied by a Power of Attorney
to pass
transfer, attend to effect the desired transfer and registration in
the office of the Fourth Respondent.
[22]
Where the property is transferred to the purchaser based on a valid
Power of Attorney from the seller, the purchaser acquires
lawful
ownership of the property irrespective of whether the deed of sale is
valid and endorsable or not.
[23]
The aforementioned proposition derives from the common law
abstract
theory
of passing of ownership in respect of
immovable assets. In terms of the abstract theory, the essential
elements for passing ownership
are two -fold, namely;
23.1
Delivery by way of registration of transfer ;
23.2
A real agreement, the intention of which transfer
has to pass ownership and, correspondingly, the transferee's
intention to acquire
ownership occurs.
[24]
As regards the
casual system of transfer,
a
legitimate
causa
(:
iusta
causa)
giving
rise to the intended transfer, is a
sine quo
non for completion of a valid transfer of
ownership. By necessary implication, it follows therefore that where
the underlying
causa
is
legally turpitude, the intended transfer of ownership will similarly
be void.
[25]
Under the
abstract
theory,
there is therefore no requirement for a formally valid underlying
transaction except that the parties have a union of the
minds
regarding the passing of ownership.
[5]
[26]
Counsel for the First Respondent submitted that in this instance, the
essential requirements of the
abstract theory
are present in that there was in fact
registration of transfer on 21 April 1998. On its version the First
Respondent in essence
contended that there was a
real
agreement
to allow transfer, and so was the
presence of intention both on the part of the transfer and transferor
to pass ownership.
[27]
I am, unable to subscribe to this submission. Although
ex facie
the documents in possession of the Fourth Respondent a copy of
the title deed evincing the questioned transfer obtains, the
Applicant
disavowed the signature on the Power of Attorney professing
to pass transfer of ownership to the First Respondent.
In
fact, it was contended that Abdool's signature has been fraudu lently
placed on that instrument effectively implying he could
reasonably
not have had the required intention as the transferor to pass
ownership to the "purchaser"(First Respondent).
[28]
For the abstract theory to hold firmly in this regard, the delivery
of conveyancing paper trail must have been plainly valid.
Absent a
legitimate Power of Attorney to pass transfer, one cannot say that
there was a
real
agreement
between
the transferor and transferee the intention common to the parties of
which was to pass ownership.
[6]
[29]
Whether the Power of Attorney contain a fraudulent or forged
signature is to my mind, an immaterial consideration for present
purposes. What is crucial is whether both parties had a legitimate or
real agreement to pass transfer. In the premise, I hold that
the
abstract theory version contended for by the First Respondent Counsel
falls by the wayside and cannot be supported.
[30]
In consequence, where there is a manifest defect in the real
agreement , if there was in this instance, ownership arising from
a
defective real agreement shall not validly pass even where transfer
and registration took place (See, Preller v Jordaan
[7]
)
[31]
In the present instance, I take the view that because of manifest
defect in the Power of Attorney which would naturally represent
the
real agreement, no valid transfer and registration could have been
properly effected in the title deed purporting to convey
ownership in
favour of the First Respondent. This patent defect is common cause
between the parties. Whether Abdool's signature
has been fraudulently
placed on that document or merely forged cannot, in my view
constitute a factual dispute to impede the matter
from being decided
on paper.
[32]
Conversely, a mere existence of fraud or forgery as understood in
criminal law would invariably render the Power of Attorney
per
se invalid if not unlawful, with the result
that no transfer would have validly taken place from inception. In
the result, I find
that no delivery or valid transfer of ownership
took place in favour of the First Respondent with the inescapable
conclusion remaining
that the Applicant retains original ownership of
the property in question.
[33]
I now turn to consider the second leg of the First Respondent's
contention, namely, the issue of extinctive prescription. It
was
submitted that as the claim was not one of vindication (res
vindicatio) but relief to procure declaratory order, then
prescription
is another impediment that confronts the Applicant. It
is actually said that the claim as it derives from declaratory relief
as
well as mandatory interdict to enforce certain remedial steps, has
become prescribed in law. This is allegedly because it is not
a claim
that has no origin in
res vindicatio.
[34]
This vexed legal issue occupied the Supreme Court of Appeal's
attention in
Absa
Bank v Keet.
[8]
.
The
crisp issue analogous to the present application, was "whether
the appellant's claim (Absa bank's claim) for repossession
of its
vehicle is a debt" which for purposes of the
Prescription Act
prescribes
after three years"(at 474, E- F, para 9).
[35]
Counsel for the appellant (Absa) submitted that a vindicatory claim
is clearly a claim based in ownership of a thing and that
it cannot
be described as a claim for satisfaction of a debt. _He argued that
the court a
quo
(Fabricius
J) erred in holding that the
actio
rei vindicatio
becomes
prescribed after three years by virtue of the provisions of
Section
10
of the
Prescription Act, 1969
.
[9]
In
doing so, the learned judge rejected the view of Blignault J in
Staegeman
v Langenhoven
[10]
and Others
in
holding that such a claim is not a debt for purposes of Chapter Ill
of the said Act, and can accordingly not be defeated by a
plea of
extinctive prescription.
[36]
Counsel for the Respondent, (introduced as
amicus
curia
by the court in the proceedings)
submitted that the period of prescription in respect of vindicatory
claim, for which both the 1943
and 1969 Acts are silent, it could
have done so and allowed vindicatory claim to be decided on a
case-by-case basis.
[37]
The court in
Keet's case supra,
after
reviewing old authorities on the subject expressed the view in Para:
20 that:
"In my view there is
merit in the argument that a vindicatory claim, because it is claim
based on ownership of a thing, cannot
be described as a debt as
envisaged by the
Prescription Act. The
High Court in Staegemann (para
16) was correct to say that the solution to the problem of
prescription is to be found in the basic
distinction in our law
between a real right (ius in re) and a personal right (ius in
personam). Real rights are primarily concerned
with the relationship
between a person and a thing, and personal rights are concerned with
a relationship between two persons......"
[38]
The foregoing
dictum
per
Zondi JA, in Keet's case correctly summed up the legal principle on
the vexing issue which was often differently decided in
various
Divisions of the High Court. I am bound to follow this principle.
[39]
The submission by the First Respondent, and for the principle
outlined, given the vindicatory nature of the Applicant's claim,
is
clearly predicated on incorrect premise. The vindicatory claim
Applicant made against the First Respondent is not a "debt"
and can therefore, not become prescribed within the meaning of the
Prescription Act after
effluxion of three years from the time when
the relief was sought by the Applicant. Accordingly, there is no
valid reason as to
why the claim for vindication of its property
should not succeed.
[40]
I accordingly make an Order as follows:
a.
An
order is granted declaring the registration of transfer of the
immovable property more fully described as Erf 6474 KS Piet
Potgietersrus
(Mokopane) Limpopo, into the First Respondent on 21
April 1998, null and void;
b.
That, the First to Fourth Respondents are ordered
to sign all necessary documents and take such steps as are required
in giving
effect to the return and re-registration of the said
property into the Applicant's name.
c.
That, the Sheriff of the High Court be and is
hereby authorized and empowered to sign such documents and take such
steps on behalf
of the parties, in giving effect to (b) above, in the
event of the Respondents failing to comply with the order as set out
in (b)
above.
d.
Further that, the First Respondent is ordered to
pay the costs of application, which include the costs of employment
of counsel,
_________________
M.G PHATUDI
JUDGE
OF THE HIGH COURT
LIMPOPO
DIVISION
REPRESENTATION:
1.
Counsel for the Applicant : Adv A.B
Rossouw SC
Instructed
by : Afzal Lahree Attorneys
Kelvin,
SANDTON
2.
Counsel for First Respondent : Adv MP van
der Merwe SC
Instructed
by : Borman Snyman & Barnard
MOKOPANE
3.
Date heard : 07 NOVEMBER 2017
4.
Date delivered : 07 FEBRUARY 2018
[1]
Annexure "FA3"Bundle 1, Pleading Index, P25 "FA"
[2]
Annexure "FA4 "and "FA5 ", Pleading Index, PP 29
-34, "FA"
[3]
Paginated page Index Pleadings, P60, Para: 16 and 16, and 38.18 P98,
Para: 38,23, "AA"
[4]
Annexure "FAS", P33 "FA"- Power of attorney to
transfer"
[5]
Mentjies N.O v Coetzer and Others 2010 (5) SA 186 (SCA)
[6]
Air - Kel (Edms) Bpk h/a Marked Motors v Bodenstein
1980 (3) SA 917.
(AD)
[7]
1956 (1) SA 483
(A) at 496.
[8]
2015 (4) SA 473 (SCA)
[9]
Act 68 of 1969, as amended
[10]
2011 (5) SA 648
(WCC)