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[2018] ZALMPPHC 64
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Ehlers N.O and Others v Land and Agricultural Development Bank Of South Africa and Others (2919/2016) [2018] ZALMPPHC 64 (31 August 2018)
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Certain
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REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO DIVISION, POLOKWANE)
(1)
NOT REPORTABLE
(2)
OF INTEREST TO OTHER
JUDGES
(3)
REVISED
CASE NO: 2919/2016
31/8/2018
In
the matter between:
GERT HENDRIK EHLERS
N.O
FIRST APPLICANT
DANIEL MATTHYS CHRISTOFFEL
EHLERS N.O
SECOND APPLICANT
DANIEL FREDERICK EHLERS
N.O
THIRD APPLICANT
(In their capacities as the
Trustees for the time
being of
The Emberbe Trust,
Registration
number: IT20074/2000)
and
LAND AND AGRICULTURAL.
DEVELOPMENT
FIRST RESPONDENT
BANK OF SOUTH AFRICA
THE SHERIFF OF THE HIGH COURTR,
BOCHUM
SECOND
RESPONDENT
(Known to the Applicants as Mr.
Ramaala)
CORFUSCORE (PTY)
LIMITED
THIRD RESPONDENT
(Registration Number:
2014/049788/07)
REGISTRAR
OF DEEDS, POLOKWANE
FOURTH
RESPONDENT
ABSA BANK
LIMITED
FIFTH
RESPONDENT/ INTERVENING PARTY
JUDGMENT
MAKGOBA JP
[1]
On
the 16 August 2018 and upon hearing arguments by the parties I
pronounced an order dismissing the application with costs and
indicated that my reasons for judgment would follow in due course.
[2]
What
follows are the reasons for the order.
Introduction
[3]
This
matter is in essence an application by the Applicants to set aside a
sale in execution held on 19 January 2018 by the Second
Respondent,
along with various other forms of relief. The Applicants in their
capacities as the duly appointed trustees of the
Emberbe Trust
IT20074/200 ("the Trust") apply for various forms of
relief, including the setting aside of the sale in
execution of the
trust's farms which occurred on 19 January 2018.
[4]
The Applicant's notice of motion was
formulated in the following terms:
4.1.
That
the warrant of execution issued under the above case number, and the
subsequent attachment of the immovable properties situated
at [….],
Limpopo Province (hereinafter collectively referred to as "The
Farms") executed by the Second Respondent
on 6 November 2017 ,
be set aside;
4.2.
That the sales in execution of the Farms
which sales were conducted by the Second Respondent on the 19t h
January 2018 , be set
aside;
4.3.
That
the transfer to the Third Respondent, subsequent to the aforesaid
sale in execution, be set aside;
4.4.
Authorising
the Applicants to sell the forms via private treaty.
[5]
The
aforesaid relief is premised on the alleged irregularity of the sale
in execution, which was conducted by the Sheriff for the
district of
Bochum, the Second Respondent. The alleged irregularity is based on
the fact that the Second Respondent had no authority
to execute court
processes in the area of Baltimore, in which the trust's farms are
situated, as the Sheriff for the district of
Mokopane was awarded the
area of Baltimore as his "service area".
[6]
The
Applicant submit that in the event it is found that the Second
Respondent had the authority, the First and Second Respondents
failed
to comply with the statutory requirements pertaining to a sale in
execution of the immovable properties in that:
6.1.
Notice of attachment was served on the
Registrar of Deeds, Pretoria as supposed to the Registrar of Deeds,
Polokwane.
6.2.
The notice of attachment was not served
on the occupiers of the trust's immovable properties.
[7]
The First Respondent opposes the
application of the Trust on the basis that:
7.1.
The Applicants lack
locus
standi
to launch the present
application;
7.2.
The trust farms were sold by the correct
Sheriff as advised by the Board of Sheriffs;
7.3.
The Second Respondent in any event held
an
ad hoc
appointment
authorizing him to conduct the auction;
7.4.
To the extent that the Second Respondent
was not the correct Sheriff to attend to service of the writ of
execution and the subsequent
execution sale, any non-compliance with
the provisions of Rule 46 of the Uniform Rules of Court are
condonable by the Court.
[8]
The Second Respondent opposes the
application on the basis that:
8.1.
The trust farms which fall within the
Baltimore area, have been allocated to the Second Respondent by the
Minister of Justice as
his service area;
8.2.
The
trust farms are situated within the district of Bochum for which the
Second Respondent is the appointed Sheriff;
8.3.
The
dispute with regard to the service areas of the Second Respondent and
the Sheriff of Mokopane was settled long ago by the task
team for
Sheriffs, which instructed that the Second Respondent should serve
the farms within the area of Baltimore.
[9]
The Third Respondent opposes the
application on the basis that:
9.1.
There exists no legal and factual basis
for the relief sought by the Trust;
9.2.
The Third Respondent as
bona
fide
purchaser performed all
obligations in terms of the conditions of sale, delivered guarantees
and has taken steps to implement the
sale. That the farms have since
been transferred and registered in the Third Respondent's names;
9.3.
In addition to aforesaid, ABSA Bank
Limited, being the Third Respondent's financier who holds a first
ranking mortgage bond over
the farms, have launched an application to
intervene in the Trust's application.
ABSA Bank Limited as an
Intervening Party
[10]
ABSA Bank Limited came into these
proceedings as an Intervening Party and was accordingly admitted as
the Fifth Respondent. ABSA
Bank is the holder of a first mortgage
bond over the farms. It financed the Third Respondent's acquisition
of the farms, the mortgage
bond serving as security for the loan.
The decisive criterion for leave
to intervene is that the party seeking such leave must have a direct
and substantial interest in
the subject matter of the litigation.
What is required is a legal interest in the subject matter of the
litigation that may be
prejudicially affected by the judgment of the
Court -
United Watch & Diamond Co v. Disa Hotels 1972(4) SA
409 (C)
and
Standard Bank of SA Ltd v. Swartland Municipality
2011 (5) SA 257
(SCA) at 259E - 260A.
[11]
In
my view ABSA's legal interest in the present case is plain; should
the relief sought by the Applicants be granted, ASSA Bank
stands to
lose its security for advance of R 31 Million. It is astonishing that
the Applicants, despite being aware of the mortgage
bond in ABSA'
favour, do not even deal with ABSA's rights at all. Neither do they
seek cancellation of the mortgage bond. ABSA's
application is
accordingly granted and it is admitted as the Fifth Respondent in
these proceedings.
Factual Matrix
[12]
The
Applicants, in their capacities as trustees of the Emberbe Trust had
obtained a long term loan from the First Respondent ("Landbank")
secured by a mortgage bond registered in favour of the First
Respondent over the three farms, Bonteberg 85, Kalkfontein 84 and
S'Gravenhage 100 all situated at Baltimore, Limpopo Province.
Following the Applicants' failure
to repay the loan debt, the First Respondent on the 11 October 2016
obtained default judgment
in this Court against the Applicants for
payment of the amount of R 20 946 355.20 plus interest at the rate of
12.5 % per annum.
Simultaneously with the granting of the judgment
the First Respondent obtained an order declaring the farming
properties executable
towards payment of the judgment debt.
[13]
The First Respondent, as execution
creditor, proceeded with execution steps against the Applicants
resulting in the farming properties
being judicially attached in
terms of a warrant of execution. The Second Respondent (as the
Sheriff of the High Court, Bochum)
attached and, on 19 January 2018
sold the farms in execution to the Third Respondent for an aggregate
sum of R 31 Million plus
VAT at 14 % in the sum of R 4.34 Million.
[14]
On 31 January 2018 the Fifth Respondent
(ABSA) provided guarantees for payment to the transferring attorneys
in the sum of R 31
Million in respect of the purchase price of the
farming properties. Transfer of the farms by the Second Respondent to
the Third
Respondent was registered was registered on 30 April 2018.
The Fifth Respondent (ABSA) was not aware of the current disputes
until
June 2018, long after registration of the mortgage bond in its
favour over the farms.
[15]
The
following facts can be accepted as common cause for purpose of this
application, either through the admission thereof by the
parties, or
the fact that they stand uncontested:
15.1.
The appointment of the Second Respondent
as Sheriff for the magisterial district of Bochum;
15.2.
The immovable properties (farming
properties) fall within the magisterial district of Bochum;
15.3.
The validity of the default judgment
obtained against the Applicants on the 11 October 2016 is
unchallenged;
15.4.
The Second Respondent attended to the
attachment of the immovable properties as well as the sale in
execution of the properties;
15.5.
A warrant of execution was issued in
terms of which the Second Respondent was directed to attach the
Applicants' immovable properties.
The Second Respondent proceeded to
serve the writ of execution on the Applicants on 3 November 2018;
15.6.
The said immovable properties were
subsequently sold by the Second Respondent on 19 January 2018.
Issues for Determination
[16]
There
is a dispute between the Applicants and the First to Third
Respondents in relation to the service areas of the Second Respondent
(as Sheriff for Bochum) and the Sheriff for Mokopane. The Applicants
content that, although the farms are in the district of Bochum,
they
fall in the service area of Mokopane and that the latter ought to
have conducted the sale in execution.
[17]
The following issues stand to be
adjudicated by this Court:
17.1.
Whether
the Applicants, as judgment debtors, have the necessary
locus
standi
to launch the present
application;
17.2.
Whether
the Applicants have established that the sale in execution held by
the Sheriff, Bochum, the Second Respondent, held on 19
January 2018,
is null and void;
17.3.
Did
the Second Respondent have the required authority to execute the
warrant of execution;
17.4.
Did
the Second Respondent have the required authority to arrange a sale
and proceed with the sale in execution;
17.5.
Did
a valid transfer of the properties to the Third Respondent take place
in view of the alleged Second Respondent's lack of authority;
17.6.
Whether
the Applicants have made out a case for the ancillary relief as set
out in their Notice of Motion.
Second Respondent's Authority
to attach and sell the Properties
[18]
The
Applicants argue that the second Respondent, as Sheriff for the
district of Bochum, was not authorised to attach the property
and
proceed with the execution steps for the reason that the three farms
executed against are apparently not situated in his "service
area". The argument is extended to say that the Sheriff for
Mokopane is the person authorised to attach and proceed to attach
and
proceed with execution for the reason that the three farms are in his
"service area".
[19]
This
argument and / or submission by the Applicants is misconceived in
that emphasis is made on
"
service area"
of a Sheriff and
not a
"district"
for
which the Sheriff has been appointed and the district in which the
property subject to attachment and execution is situated.
The actual
and true wording of Uniform Rule 46(2) is the following:
"(2) The attachment of the
immovable property shall be made by any Sheriff of the district in
which the property
is
situated, upon
a
writ
corresponding substantially with Form 20 of the First Schedule"
The applicable wording of Uniform
Rule 46(2) indicates specifically that attachment
shall only be
made by a Sheriff for the district where the immovable property is
situated.
This simply means that a Sheriff
who is not appointed for the district where the immovable property is
situated (physically) shall
not be entitled to attach such immovable
property.
[20]
Nowhere in Uniform Rule 46 can any
reference be found to the term
"
service area"
but all
references are clearly made to
"district".
The argument proffered by the
Applicants would require the Sheriff of Mokopane to proceed with the
attachment and sale in execution
in a district where he does not hold
an appointment. This will have the effect that the sale in execution
is conducted outside
the district where the immovable property is
physically situated. Any such attempt will fall foul of the
provisions of Uniform
Rule 46(4)(b) which provides that:
" After attachment , any
sale in execution shall take place in the district in which the
attached property is situated and
shall be conducted by the Sheriff
of such district who first attached the property."
[21]
In
casu
it
is common cause that the three farms are situated in the district of
Bochum and furthermore Mr Ramaala is the duly appointed
Sheriff for
the district of Bochum. The fact that during the course of the
dispute as to the rightful sheriff to attach and sell
the property,
Mr Ramaala was appointed by the Registrar of this Court as an
ad
hoc
Sheriff, and on the eve of the
sale n execution, does not take this matter any further. Such step
was embarked upon
ex abudandi
cautella.
The fact of the matter is
that Mr Ramaala is the duly appointed Sheriff for Bochum, the
district in which the three farms are situated.
[22]
In the result I make a finding that the
Sheriff for Bochum, that is the Second Respondent, had the authority
to attach and sell
the farming properties in execution.
Validity
of Second Respondent's Auction
[23]
The First Respondent submits that in
order for the Applicants to succeed to set aside the sale in
execution conducted by the Second
Respondent on 19 January 2018, it
is required to establish that the Second Respondent’s auction
was fatally defective and
not in compliance with the provisions of
Rule 46 of the Uniform Rules of Court. The appropriate provisions of
the aforesaid Rule
46 are as follows:
"46(2) The attachment of the
immovable property shall be made by any Sheriff of the district in
which the property is situated,
upon a writ corresponding
substantially with Form 20 of the First Schedule." "46(3)(a)
Notice of attachment, corresponding
substantially with Form 20A of
the First Schedule, shall be served by the Sheriff upon the owner of
the immovable property and
upon the Registrar of Deeds or other
officer charged with the registration of such property, and if the
property is occupied by
some person other than the owner, also upon
such occupier."
"46(4)(b) After
attachment, any sale in execution shall take place in the district in
which the attached immovable property
is situated and shall be
conducted by the Sheriff of such district who first attached the
property: Provided that the Sheriff of
the first instance and subject
to the provisions of paragraph (d) of subrule (8) may on good cause
shown authorize such sale to
be conducted elsewhere and by another
Sheriff."
[24]
In
Campbell
v Botha and Other
2009 (1) SA 239
(SCA) at par 8
Streicher JA held that:
"An attachment is effected
by way of
a
notice by the
Sheriff served together with
a
copy of the
warrant of execution upon the execution debtor
as
owner, upon the
Register of Deeds, upon all registered holders of bonds registered
against the property, if the property is in the
occupation of some
person other than the execution debtor, also upon such occupier and
upon the local authority in whose area the
property is situated.
Whatever the position may be if service is not effected on any of the
interested persons there can, in my
view, never be said to have been
an attachment where neither the warrant nor the notice of attachment
had been served on or brought
to the notice of the owner."
In the present case the Applicants
do not deny that the warrant of execution was served on them by the
Second Respondent. Furthermore
the Applicants do not deny that the
notice of attachment was sent to the Registrar of Deeds, Pretoria.
The Applicants' main contention
herein is that with effect from 4
April 2017, all properties situated in Limpopo Province resort under
the Deeds Office for Polokwane
and not Pretoria.
[25]
The
question arises as to whether the dispatch of the notice to Pretoria
instead of Polokwane renders the attachment and subsequent
sale in
execution null and void. The First Respondent submits that the Second
Respondent's failure to dispatch the notice of attachment
to the
Registrar of Deeds, Polokwane is a defect that can be condoned by
this Court and which does not render the auction null
and void. I
agree.
In
Marais v Aldridge and Others
1976 (1) SA 746
(T)
it was held that even if there has been no
substantial compliance with Rule 45(8)(c)(i)(a) in regard to the
giving of a notice of
attachment to all interested parties, the Court
would condone any such failure to comply with the Rules under the
inherent jurisdiction
of the Court or under the provisions of Rule
27(3) of the Uniform Rules as there had been no possible prejudice to
the Applicant
by virtue of such non-compliance with the Rule.
In my view the Second Respondent's
notice to the Registrar of Deeds, Pretoria as opposed to the
Registrar of Deeds, Polokwane, similarly
have caused no conceivable
prejudice to the Applicants, and is consequently condoned by this
Court.
Applicants' lack of
locus
standi
[26]
The
First Respondent submits that the Applicants do not possess the
necessary
locu standi
to
launch the present proceedings. Reliance in this regard was placed on
the case of
Hiralal v Naicker and
Another
2009 (1) SA 636
(D)
where it
was held that in the execution process the execution debtor has no
role and that once the property had been attached it
was placed
beyond the reach of the Applicant.
[27]
In
the
Hiralal
case
supra, reference was made to the Appellate Division case of
Liquidators Union and Rhodesia
Wholesale Ltd v Brown & Co
1922 AD 549
at 558
where
Kotze JA stated:
"An arrest effected on
property in execution of
a
judgment creates
a
pignus
praetorium or to speak more correctly,
a
pignus judiciale,
over such property. The effect of such
a
judicial arrest
is that the goods attached are thereby placed in the hands or custody
of the officer of the Court. They pass out
of the estate of the
judgment debtor....."
[28]
Based
on the aforesaid authorities, I am of the view that in bringing the
present application the Applicants attempted to usurp
the role of the
Sheriff (the Second Respondent) which they are not entitled to do.
The Applicants as execution debtor in these
proceedings have no role
in the execution process. Accordingly their application should not be
entertained.
Conclusion
[29]
For all the reasons stated above, I come
to the conclusion that the attachment executed by the Second
Respondent and the subsequent
sale in execution held by the Second
Respondent on 19 January 2018 were all done in accordance with the
provisions of Rule 46 of
the Uniform Rules of Court. To the extent
that it may be found that there was non-compliance with any provision
of the aforesaid
rule, such non-compliance did not cause the
Applicants any prejudice and is consequently condoned by this Court.
[30]
In the result the application is
dismissed with costs, such costs to include costs of two Counsel
where employed.
EM MAKGOBA
JUDGE PRESIDENT OF THE
HIGH COURT, LIMPOPO
DIVISION, POLOKWANE
APPEARANCES
Application
heard on :
16
August 2018
Order
pronounced on :
16 August
2018
Written
Judgment submitted on: 31 August 2018
For
the Applicants
: Adv. F Botes SC
Adv. M Brester
Instructed
by
: Espag
Magwai Attorneys
Polokwane
For
the First Respondent :
Adv. FH Terblance SC
Adv. AJ Wessels
Instructed
by
:
Leahy
Attorneys
c/o
Kampherbeek Twine & Pogrund Attorneys PFF Phasha
For
Second Respondent :
PFF Phasha
Instructed
by
:
Phokoane Phasha Attorneys
For
Third Respondent :
Adv JC Klopper
Instructed
by
: Corrie
Nel & Co Attorneys
For
the Fifth Respondent :
Adv. NJ Horn
(Intervening
Party)
Instructed
by
: Tim du
Toit & Co Attorneys
c/o
Nelis Britz Attorneys