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[2018] ZAGPJHC 578
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Ndzoko v Kalakala (30241/2016) [2018] ZAGPJHC 578 (12 October 2018)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 30241/2016
12/10/2018
In
the matter between:
Kodona
Ndzoko Applicant
and
Willy
Kalakala Respondent
Judgment
Van
der Linde, J
:
Introduction
[1]
This is an application for leave to execute the respondent’s
two immovable properties known as Erf […] Bassonia,
Rock
Extension 13, and as Erf […] Glen Vista, Extension 6, both
executions being sought in satisfaction of a judgment debt
of the
respondent in favour of the applicant. Both parties are legally
represented, the applicant by Adv Rourke and the respondent
by
attorney Neshavi.
[2]
The applicant is an adult female who lives in the United Kingdom.
She and the respondent entered into a written agreement
of sale on 23
March 2015 whereby the respondent sold the properties situate at
Stand […] Rosettenville Extension, […]
B Street,
Rosettenville, to the applicant. A deposit of R430 000,00 was
payable as a portion of the aggregate purchase price
of R610 000,00.
The applicant paid R464 100,00 to the respondent on 23 March
2015; R55 800,00 on 17 May 2015;
R20 400,00 on 3 September
2015, totalling R540 300,00 in all.
[3]
It turned out that the respondent was in fact not the owner of the
property and could not give registration of transfer of the
property
to the applicant. On 1 August 2016 a breach notice was sent by
the applicant to the respondent, who did not rectify
the breach, and
on 18 August 2016 a notice of a cancellation was served on the
respondent. The respondent thereupon became
obliged to return
the R540 300,00 to the applicant but did not do so.
[4]
On 1 September 2016 the applicant sued the respondent for payment of
that amount and on 25 October 2016 this Court gave a default
judgment
against the respondent in favour of the applicant. The judgment debt
remains unpaid. The applicant thereafter issued a
writ against the
immovable property of the respondent but on 30 March 2017 the Sheriff
returned a
nulla bona
.
[5]
The applicant explains that the respondent owns the two immovable
properties referred to at the outset of this judgment.
Those
properties are unencumbered. The respondent does not, according
to the applicant, live in any of the two properties
and therefore
they are not his primary residence. The applicant says that the
property at Erf […] Bassonia Rock is
probably worth
R350 000,00 and that at Erf […] Glen Vista, R550 000,00.
In other words, the property at
Erf […] Glen Vista is worth
R10 000,00 more, give or take, than the aggregate capital value
of the default judgment
at R540 300,00.
[6]
The applicant is no expert in the valuation of immovable property,
and nothing of moment can be placed on her opinions in this
regard. I
return to this issue below.
The
affidavits
[7]
In the founding affidavit the applicant drew the respondent’s
attention to section 26(1) of the Constitution, and the
respondent
was invited to put relevant information before the Honourable Court,
if it was his contention that the two properties
being declared
executable would infringe his constitutional right to access to
adequate housing. The respondent’s attention
was also
drawn to section 26(3) of the Constitution, whereby no person may be
evicted from their home without an order of court,
made after
considering all the relevant circumstances. Again, the
respondent was invited to place relevant information before
the
court. The applicant pointed out that the judgment debt as of 18 May
2017 amounted to R581 835,56, but says that it accumulates
daily
with regards to interest and costs.
[8]
In his answering affidavit the respondent said that the applicant was
obliged to put up security because she is a resident in
the United
Kingdom and not an
incola
of the court. He argued also
that the notice of motion is fatally defective because it does not
deal with or draw his attention
to the required sections of the
Constitution.
[9]
More substantively, he says that he resides at the property known as
Erf […] Bassonia, being the one supposedly valued
at
R350 000,00; and that his partner and mother of his five
children, Yvonne Kalala, resides at the property known as
Erf […]
(the one supposedly valued at R550 000,00).
[10]
He explains in his answering affidavit that he is a business owner of
a business which comprises the purchasing of immovable
properties and
then reselling them at a profit. He says a large portion of his
business consists of dealing in immovable
properties acquired from
sales in execution by the Sheriff. He explained that he on sales at a
margin properties bought by him
at a sale in execution; and then when
transfer is to be effected, he arranges for a simultaneous transfer
first from the Sheriff
to him and then from him to the purchaser of
the property concerned.
[11]
He says that he intends to apply to rescind the default judgment
given against him and that:
“
I am currently raising funds
in order to instruct an attorney …
”
[12]
As to the
nulla bona
return of service, he says that the
Sheriff did not attend his residence, and did not make an inventory
of his movable goods.
The Sheriff did however present him with
a document that he was required to sign and he says that he did not
understand what he
was signing; he now understands that it was a
nulla bona
.
[13]
As to his personal circumstances he says that he resides at the
Bassonia property and Yvonne Kalala resides at the Glen Vista
property. Five minor children live, “
both with myself
and Yvonne at our respective homes
”. He concludes
therefore that both properties are primary residences. He
admits that he does owe the applicant
“
a certain amount of
money
”, but such amount was still to be computed and says
that he would deal with this in his rescission application.
[14]
He says these properties should not be declared executable, because
he suggests a payment plan in instalments as an alternative.
Because
there are, according to him, alternative means of satisfying the
judgment debt, the execution of the two properties will
infringe his
rights under section 26(1).
[15]
In the replying affidavit the applicant explains that the
respondent’s answering affidavit was way out of time, and that
he only filed an answering affidavit after the matter had been set
down for 24 October 2017. This fitted the pattern that the respondent
employed: this application for the declaration of executability
was originally set down for 25 August 2017, and it was only
on 17
August 2017 that the respondent filed a notice to oppose (nearly a
month out of time) so as to avoid judgment being taken
against him.
She points out that the respondent has not paid any portion of the
debt owed to the applicant.
[16]
The applicant berates the respondent for making vague allegations of
endless settlement suggestions but in fact he did not
take the court
into his confidence by furnishing details of these suggestions. He
argues that the respondent is accordingly not
bona fide
.
The
parties’ submissions
[17]
The applicant argues in her heads of argument that the respondent is
not as of right entitled to security for costs. With reference
to
HR
Holfeld (Africa) Limited v Karl Walter and Co GmbH
1987 (4) SA
861
(W) the applicant argues that security for costs of an action
which had been finalised by an earlier judgment could not be ordered
under Rule 47 in subsequent proceedings arising out of that
judgment. As such, the respondent in this matter ought not to
be granted its request for security for costs.
[18]
The applicant also argues that her founding papers expressly drew the
attention of the respondent to his rights in terms of
the
Constitution. The applicant submits that it is just and equitable
that the Bassonia and Glen Vista properties be sold to pay
the
judgment debt.
[19]
I agree with the applicant’s submissions on these two points,
as also with the submission that the sheriff’s return
of
service constitutes prima facie evidence of the truth of its
contents; and that the respondent has not disturbed this.
[20]
As to whether the respondent, his partner, and their five minor
children occupy the properties, the applicant draws attention
to the
fact that nowhere does the respondent explain why he and his partner
and their five minor children should reside at different
residences.
[21]
In her heads of argument the applicant also draws attention to the
requirements laid down in the various cases that have to
be followed
before immovable property which is a primary residence, should be
declared executable. The applicant refers to
Jaftha v
Schoeman; Van Rooyen v Stoltz,
[2004] ZACC 25
;
2005 (2) SA 140
(CC) at 161I to
163B. She refers also to
Firstrand Bank Limited v Folscher
and Another, and Similar Matters,
2011 (4) SA 314
(GNP) at 332C
to 333D.
Discussion
[22]
The real issue that arises in this case is whether this Court has
discharged its duty under section 26(3) of the Constitution,
to
investigate whether there are means to pay the judgment debt other
than to execute on the immovable property of the respondent.
A
court is able to do so when a respondent such as this one, who is
clearly well informed and literate, had an opportunity to place
his
personal circumstances before the court in his answering affidavit.
[23]
If it is argued that in this case the respondent did not go far
enough in providing the required detail to the court, then
it seems
to me that it is the respondent who bears the risk of a court
concluding that the court has done that which it reasonably
can to
enquire into the personal circumstances of the respondent, for
purposes of section 26(3) of the Constitution.
[24]
In this case, absent a proper explanation by the respondent as to why
he lives in one property, his partner in another property,
and their
five children share both the properties, there is so much more that
the respondent could have said but did not. One does
not know what
the improvements are on each of these two properties; what the living
arrangements are on them; whether or not the
respondent and his
partner and their five children cannot live in one of the properties;
what the likely realisation price would
be of the two properties
concerned whether it to be sold in execution; and, most importantly,
the following consideration.
[25]
This is that the respondent has given no detail whatsoever about his
financial resources, nor of that of his partner. One does
not know
what his income is; one does not know what the settlement proposals
are that he has made; and importantly he has not in
this matter
actually made any settlement proposals at all. He was chosen instead
vaguely to suggest that settlement proposals were
and could be made,
thereby obviating the need to sell the two properties concerned in
execution.
[26]
The new Rule 46A applies to execution against residential immovable
property. Under Rule 46A(5) an application such as
the current
one must be supported by documents evidencing the market value of the
immovable property sought to be declared executable;
the local
authority valuation of the immovable property; the amounts
owing on mortgage bonds registered over the immovable
property, the
amount owing to the local authority as rates and other dues; and any
other factor which may be necessary to enable
the court to give
effect to the duty of the court under Rule 46A(8). Under that
subrule a court may order the furnishing
by a municipality of rates
due to it by the judgment debtor; and importantly it may set a
reserve price.
[27]
In deciding whether or not to set a reserve price the court must,
under Rule 46A(9)(b), take into account the market value
of the
property; the amounts owing as rates or levies; and any equity which
may be realised between the reserve price and the market
value of the
property. The court also is given the express power to postpone the
matter on such terms as it deems fit.
[28]
What operates one’s mind in this matter is why the sale in
execution of the Bassonia property (the one supposedly valued
at
R350 000,00) should not be stayed, pending the execution of an
order declaring specially executable the property at Glen
Vista,
which is currently estimated as R550 000,00 in value whereas the
judgment debt is R581 835,56, only some R30 000
more.
True, that was the judgment debt as of 18 May 2017 and interest would
have accumulated; but the value of the Glen Vista
property may in
fact also be more than R550 000,00. Absent proper evidence
concerning the value of that property, including
the municipal value,
it is not possible for this court to fix a reserve price.
[29]
Further, it may be that if an order is granted declaring specially
executable the Glen Vista property only, the respondent
may be
spurred into paying the margin between the value of the Glen Vista
property as realised at a sale in execution, and the
judgment debt,
in cash. On the other hand, if the Glen Vista property does not
realise sufficient value, or close to sufficient
value, at a sale in
execution, it would still be open to a court then to decide whether
to declare executable also the Bassonia
property.
[30]
In these circumstances I stood the matter down until Friday, 12
October 2018 to enable the applicant to obtain proper evidence
about
value.
[31]
When the matter was called today, both parties were represented as
before. The applicant handed up without objection an email
exchange
with the respondent from which it appears that the applicant asked
the respondent for municipal accounts of the two properties;
valuations by himself as estate agent, of the two properties; and
confirmations that the addresses were correct. This was to no
avail.
[32]
The applicant also handed up a supplementary affidavit (which had
been served by email on the respondent) which explains the
results of
a Windeed search, from which it appears that in fact the Bassonia
property has been sold, contrary to the respondent’s
explanation in his affidavit.
[33]
It also appears that the respondent is still the owner of the Glen
Vista property, the one in which he says his partner and
their five
children live (it will be recalled that he said he himself lived in
the Bassonia property, in his affidavit which was
dated October
2017). Its municipal valuation is R803 000, its estimated value
is R2750000, and its low value is R2170000.
[34]
The respondent’s representative when asked had nothing further
to add to the facts disclosed in the applicant’s
supplementary
affidavit.
[35]
It is uncertain, given the further facts now disclosed, whether the
Glen Vista has since become the respondent’s primary
residence;
or whether he still resides in the Bassonia property despite having
sold it. I have concerns also about the sparse information
provided
by the respondent, as I have explained above.
[36]
In the circumstances it appears to me to be fair to declare only the
Glen Vista property specially executable, fixing a reserve
price of R
1 000 000. I arrive at that rounded figure by calculating the mean of
the municipal value and the low value, and then
subtracting 30%.
[37]
I believe also that I should suspend the operation of this order for
three months to enable the respondent to make alternative
residential
arrangements for his family.
[38]
In these circumstances I make the following order:
(a) The immovable property known as
Erf […] Glen Vista Ext 6, held by the respondent under deed of
transfer T.50602/2014
is declared specially executable.
(b) The sheriff of the High Court of
South Africa is authorised, empowered and directed to sell the said
property in satisfaction
of the judgment debt owed by the respondent
to the applicant.
(c) A reserve price of R 1 000 000
is to be set for the sale of the property.
(d) Should the reserve price not be
achieved within the first three auctions, the Sheriff is authorised
to sell the said property
without a reserve price.
(e) The respondent is ordered to pay
the costs of this application.
(f) The execution of this order is
suspended until 12 January 2019.
WHG
van der Linde
Judge,
High Court
Johannesburg
For
the applicant: Adv M Rourke
Instructed
by: Tracy Sischy Attorneys
Applicant’s
Attorneys
44
Olympic Road
Corner
Republic Road
Blairgowrie
Randburg
Docex
121
Randburg
Tel:
(011) 886 0242
Cell:
082 332 8072
For
the respondent: Attorney Neshavi
Noa
Kinstler Attorneys
Respondent’s
Attorneys
c/o
Israel Goldberg Attorneys
No
82 – 3
rd
Avenue
Highlands
North
Tel:
(011) 656 6334
Ref:
NK-KAL2/0077
Email:
Nicole@Kinstler.co.za