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[2016] ZAGPPHC 29
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Breedt v Breedt and Others (61930/2012) [2016] ZAGPPHC 29 (25 January 2016)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
25/1/2016
CASE
NO: 61930/2012
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
MARTIN
BREEDT APPLICANT
and
MELANI
BREEDT FIRST
RESPONDENT
SHERIFF
CENTURION
WEST SECOND
RESPONDENT
THE
REGISTRAR OF
DEEDS THIRD
RESPONDENT
ALL
FOR APPLIANCE SERVICES (PTY) LTD FOURTH
RESPONDENT
JUDGMENT
KUBUSHI,
J
[1]
The applicant seeks an order to declare the auction held on 12 May
2014 and the subsequent agreement of sale in execution concluded
between the second respondent and the fourth respondent, null and
void for want of compliance with the court order of 10 September
2013. Ancillary to the said order, the applicant seeks a cost order,
in regard to the additional costs and the wasted costs associated
with the sale in execution, against the first respondent.
[2]
Of the four respondents cited in the application, only the first
respondent is opposing the application.
[3]
The applicant and the first respondent were previously married. The
marriage was dissolved by an order of court on 2 April 2012.
As part
of the divorce order, the applicant and the first respondent
concluded a settlement agreement which was made an order of
court.
Forming part of the settlement agreement was a provision dealing
specifically with the immovable property in question ("the
property"). The property was originally registered in the names
of both the applicant and the first respondent. Paragraph
4 of the
settlement agreement, which dealt mainly with the property, was
couched in the following words:
"VERDELING VAN BATES EN
FINANSIELE REELINGS:
4.1. Woonhuis
4.1.1. Die woonhuis bekend as […]
Tarentaal Nook, Zwartkop, Centurion, Gauteng, tans in beide partye se
name geregistreer
is, word die uitsluitende eiendom van die Eiser.
4.1.2. Die Verweerderes se onverdeelde
halwe aandeel in the woonhuis sal op koste van die Eiser in sy naam
geregistreer word binne
3 (drie) maande na datum van egskeiding.
4.1.3. Die Verweerders moet die
dokumente, stukke of aktes wat betrekking mag he of die registrasie
van haar onverdeelde halwe aandeel
in die naam van die Eiser, op
aanvraag aan die betrokke aktevervaardiger oorhandig.
4.1.4. Die Verweerderes is voorts
verplig om op aanvrag alle dokumente wat nodig mag wees ten einde
registrasie in die naam van
die Eiser te bewerstellig, te onderteken.
4.1.5. Die Eiser betaal 'n bedrag van
R475 000. 00 (VIER HONDERD VYF EN SEWENTIG DUISEND RAND) aan die
Verweerderes ten registrasie
van transport ter vergoeding van haar
onverdeelde halwe aandeel in die eiendom, vir welke deel die Eiser 'n
verband oor die woonhuis
sal registreer.
4.1.6. Die Verweerderes is geregtig om
die woonhuis te okkupeer vir 'n periode van 3 (drie) kalendermaande
na die datum van egskeiding
ongeag of die Verweerderes se onverdeelde
halwe aandeel reeds in die naam van die Eiser geregistreer is of nie.
4.1.7. Die Eiser is verplig om in die
gemelde periode van 3 (drie) kalendermaande alle uitgawes ten aansien
van die woonhuis te
betaal, wat insluit erfbelasting, water en
elektrisiteit en algemene instandhouding."
[4]
Due to reasons, which the applicant refers to as financial
constraints, the applicant was unable to obtain the necessary finance
and unfortunately the agreement did not provide for circumstances
where the applicant would not be in a position to obtain a loan.
This
resulted in the applicant not being able to comply with the
provisions of the settlement agreement to transfer the first
respondent's half share of the property into his name and pay the
first respondent the agreed amount of R475 000. Despite efforts
to
find an amicable solution regarding the property, the applicant and
the first respondent could not settle the matter which resulted
in
the first respondent launching an application relating to the
property. On 10 September 2013, the parties eventually found each
other and reached another settlement agreement which was made an
order of court. The said court order read as follows:
"By agreement between the parties
the following is made an Order of Court
1. Both parties shall immediately
secure an independent valuation of the immovable property from two
reputable estate agents within
7 days from date of this order and
shall deliver a copy of such valuation to the other party's attorneys
of record. For purposes
of the order the average value of the two
valuations shall be deemed to be the market related value.
2. Both parties shall be entitled to
market the immovable property in the open market in an endeavour to
procure a willing and able
buyer for the immovable property at a
market related price over a period of three months from the date of
this order. Unless acceptable
bank guarantees are received from a
purchaser the provisions of paragraph 3
infra
shall apply.
3. The Second Respondent (the sheriff
and second respondent in the present application as well) shall be
authorised to sell the
immovable property, after the lapse of the
three months period referred to in paragraph 2
supra
to sell
the immovable property by public auction for a market related value.
For purposes of this paragraph the market related value
shall be the
lower of the two valuations referred to in paragraph 1
supra.
The
Second Respondent shall continue this process until the immovable
property is sold.
4. From the net proceeds arising from
the sale of the immovable property the Applicant shall be paid the
amount of R475 000-00 together
with interest or the aforesaid amount
at a rate of 15,5% per annum calculated from 3 July 2012 to date of
payment.
5. Both parties undertake to sign all
documentation necessary to effect transfer of the immovable property
into the name/s of the
purchaser/s failing which the Second
Respondent is authorised to sign all such documentation on behalf of
the defaulting party
at such party's costs.
6. First Respondent shall be obliged
to allow the applicant's estate agent/s to market the immovable
property and must co-operate
with the said agents
7. The First Respondent is ordered to
pay the Applicant's costs from lodgement of this application up until
January 2013 when the
counter-application was lodged."
[5]
It appears from the papers that both the applicant and the first
respondent were able to secure independent valuation of the
property.
From the said valuations the market related value was determined at
R1 400 000. It also appears that both the applicant
and the first
respondent attempted to market the property in the open market for
the agreed market related value, with no success.
There is evidence
that the applicant provided the first respondent with no less than
two proposed offers to purchase the property
but none of the two
offers materialised.
[6]
Consequently, the first respondent approached the sheriff (the second
respondent in the present application) as
mandated by the
court order of 10 September 2013, to have the property sold on
auction. The first respondent's evidence is that
she was advised by
the sheriff that in order for him (the sheriff) to sell the property
in a public auction he requires a writ
of execution to be issued for
the amount of R475 000. On the basis of the writ of execution issued
by the first respondent the
property was attached and thereafter sold
in execution through the sheriff's auction process. The conditions of
the sale in execution
provided for a reserve price of R 1 400 000.
The property was auctioned off the first round at the reserve price
of R1 400 000.
When there were no bids reaching the reserve price the
sheriff proceeded to auction the property again, with no reserve
price.
The property was eventually sold to the highest bidder, being
the fourth respondent at a price of R1 181 000 which is an amount
far
less than the agreed market related price of R1 400 000.
[7]
It is common cause that even though the applicant was aware of the
intended sale in execution he was not at the sale when the
property
was sold in execution.
[8]
The applicant's submission is that the sale in execution was premised
on a fatally defective process employed by the first respondent.
According to the applicant, the court order of 10 September 2013
entitles the first respondent to share in the proceeds of the
property when realised in the open market at the agreed market
related value. The amount of R475 000 can, thus, not be considered
as
a debt owed by the applicant to the first respondent. The applicant
further submits that the court order of 10 September 2013
specifically deals with the method for determination of the market
related value and how the property was to be sold, which is
peremptory. The contention being that the court order does not
provide for the market related value to be discarded merely because
the market related price could not be attained. On those grounds, the
applicant argues for the sale to be declared null and void.
In the
alternative, the applicant contends that the sale may be proceeded
with, as long as the first respondent agrees that the
amount of R219
000, which is the difference between the reserve price of R1 400 000
and the sale price of R1 181 000, should be
deducted in his favour
from the proceeds of the sale.
[9]
The crux of this application is whether the applicant is entitled to
claim that the sale in execution is null and void. The
underlying
question being whether the first and second respondents were entitled
to sell the property for an amount less than the
market value
(reserve price) having regard to the court order of 10 September
2013.
[10]
The content and interpretation of the court order of 10 September
2013 seems to be the point of dispute in this application.
Firstly,
the question is, whether the first respondent employed a defective
process when selling the property. I do not think so.
[11]
A sale in execution is a public auction held by a sheriff. Sheriff's
auctions are sold with no reserves. Property at a public
auction
generally sells for a market related price. In a sale in execution
the debtor normally does not have a say in the final
selling price.
[12]
It is quite clear from the reading of the court order of 10 September
2013 that a sheriff (the second respondent in this application)
was
authorised to sell the property by public auction should the
applicant and/or the first respondent fail to market the property
within three months after the court order was granted. It is not in
dispute that none of the two was able to do so. The first respondent
acted correctly in approaching the sheriff to sell the property. The
court order also states clearly that the property must be
sold on a
public auction. In terms of the uniform rules of court, the sheriff
can auction property when authorised in terms of
a writ of execution
and this is the process followed by the first respondent. Even though
it was not correct for the property to
be sold through a writ of
execution, however, in the ultimate end, the property was sold by
public auction. This is what was intended
by the applicant and the
first respondent.
[13]
Secondly, the question is whether the last sentence of paragraph 3 of
the court order which read as follows:
"The Second Respondent shall
continue this process until the immovable property is sold."
should
be interpreted to mean that the second respondent shall continue with
the process, selling the property at the same price
(the agreed
market related value) over and over again, despite the fact that the
property might never be sold at a reserve price
of R1 400 000.
[14]
The applicant's submission is that the court order of 10 September
2013 allowed for the sale of the property at the agreed
market
related price and that the property should not have been sold at no
other price except that one. The applicant's argument
seems, in my
view, to ignore the fact that a judgment or order of court should
have a practical effect or result. As such, to give
the sentence
quoted in paragraph 13 of this judgment a meaning that 'the second
respondent should continue with the process, selling
the property at
the same price (the agreed market related value) over and over again,
despite the fact that the property might
never be sold at a reserve
price of R1 400 000' would, in my opinion, amount to an absurdity and
would render this order
brutum fulmen.
[15]
The evidence before me indicates that the property will never be sold
at the agreed market related value of R1 400 000. The
applicant,
himself, was unable to obtain a bond over the property, for a mere
amount of R475 000, even though the property is unencumbered.
The
evidence is that the property has been on sale since at least 10
September 2013 and no sale could be made. The applicant and
the first
respondent had, in terms of the court order, an opportunity of at
least three months within which to market the property
on the open
market place and at the agreed market related price of R1 400 000,
none was able to get a buyer for the property. There
is evidence that
the applicant presented the first respondent with no less than two
proposed offers to purchase the property but
none of the offers
materialised.
[16]
It appears common cause from the papers that even if the property
should be placed on auction again, at the reserve price of
R1 400
000, it is more than probable that the reserve price would receive no
bids. The property was auctioned twice at the last
auction, though on
the same day, and there were no bids obtained for the reserve price.
The evidence, as
per
the applicant's counter-application to
the application launched by the first respondent, indicates that the
applicant was prepared
to have the property sold by auction at a
reserve price of R1 100 000. From this evidence it can be safely
inferred that the applicant
was more than prepared to accept that the
property could not be sold at a higher amount. There is no evidence
that indicates that
the property would in the near future be sold at
a higher price than that offered by the fourth respondent.
[17]
I hold the view that to continue with this same process over and over
again, where it is evident that the reserve price will
not be
reached, would only be prejudicial to the first respondent. The
applicant continues to enjoy the benefit of the property
by
occupation of the house whilst the first respondent cannot enjoy the
benefit of her half share of the property. The value of
the half
share of the property which was agreed to be R475 000 in 2012 has, by
now, devaluated and the amount presently is no longer
worth the same
value.
[18]
To, therefore, declare the sale null and void, as prayed for by the
applicant, and restart the auction process afresh would
be a costly
exercise in futility and unfairness to the first respondent. The
applicant had the benefit of occupation for far too
long than he
should have at the expense of the first respondent. He cannot
be heard to complain that he will suffer damages
at the amount of
R219 000 if the property is sold at the amount of R1 181 000. In
order to ensure that the interest of justice
and fairness are served
I have no alternative but to allow the transfer of the property to
the fourth respondent to be proceeded
with.
[19]
In the circumstances, the application is dismissed with costs.
__________________
E.M.
KUBUSHI
JUDGE
OF THE HIGH COURT
APPEARANCES
HEARD
ON THE
: 26 November 2015
DATE OF JUDGMENT
: 25 January
2016
APPLICANT'S COUNSEL
: Adv C.
Zietsman
APPLICANT'S ATTORNEYS
: Anton
Rudman Attorneys
FIRST RESPONDENTS' COUNSEL
:
Adv C. Van Schalkwyk
FIRST RESPONDENTS' ATTORNEY
:Venn
& Muller Attorneys