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[2016] ZAGPPHC 459
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Murray N.O. and Another v Rayman and Others (25888/2015) [2016] ZAGPPHC 459 (3 May 2016)
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IN THE
HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION,
PRETORIA)
REPUBLIC
OF SOUTH AFRICA
CASE
NUMBER: 25888/2015
DATE:3/5/2016
(1)
REPORTABLE: NO
(2) OF
INTEREST TO OTHER JUDGES: NO
In the matter between:
CLOETE MURRAY
N.O First
Applicant
WELCOME NORMAN
JACOBS N.O. Second
Applicant
and
MUHAMMED REZA
RAYMAN First
Respondent
ALL OTHER UNLAWFUL
OCCUPIERS RESIDING
AT [...],
CENTURION Second
Respondent
THE CITY OF TSHWANE
METROPOLITAN
MUNICIPALITY Third
Respondent
JUDGMENT
BRENNER
AJ
1.
This is an application for the eviction of the first and second
respondents, in terms of the Prevention of Illegal Eviction from
and
Unlawful Occupation of Land Act, 19 of 1998 ("the PlE Act").
2.
For ease of reference, the first and second applicants will be
referred to as "Murray" and "Jacobs" or
collectively
as "the trustees" where appropriate. A
previous trustee, who was substituted by Murray, and who was
originally the first
applicant, namely, Mathole Serofo Motshekga,
will be referred to as "Motshekga".
3.
The first respondent, Muhammed Reza Rayman, will be referred to as
"Rayman".
4.
The second respondent includes all other occupiers who occupy the
property in question with Rayman and will be referred to as
"the
occupiers". The current known occupiers are Rayman, his wife
Aneesa Rayman, their two minor children, Muhammed Zephan
Rayman
(currently 14), Muhammed Zubair Rayman (currently 13), and boarder
Frank Saenger ("Saenger") who, as at May 2015,
was employed
by Geopile Africa.
5.
Rayman was provisionally sequestrated on 5 May 2014 and finally on 7
July 2014. The trustees are seized with the winding up of
Rayman's
insolvent estate, and have launched this application in such
capacity.
6.
The third respondent, being the City of Tshwane Metropolitan
Municipality, has not opposed the application or filed any report
on
the subject.
7.
On 14 February 2005, Rayman took transfer of certain immovable
property described as erf […], Pretoria, Gauteng,
corresponding
with […] Centurion, Pretoria, Gauteng ("the
property"). He acquired same on 31 July 2004 for a price of R550
000,00.
Initially, no bond was registered with the transfer, which
means that the transaction was for cash. In 2007, however, a bond for
R1 353 000,00 was registered in favour of FirstRand Bank Limited
("FRB"). It is not clear from the papers what the monies
were used for.
8.
Notwithstanding Rayman's sequestration in July 2014, however, he and
the occupiers have continued to remain in occupation of
the property
without tendering any consideration for the value of such occupation,
apart from the imposts mentioned below. Indeed,
it is an undisputed
fact that the last date on which Rayman paid an instalment on the
bond was 9 December 2011.
9.
There are three primary issues in casu.
10.
The first issue relates to the competence of the then provisional
trustees, Jacobs and Motshekga, to apply in terms of section
18(3) of
the Insolvency Act 24 of 1936 ("the
Insolvency Act"
;), for
the approval of the Court to pursue this application, such
application having been made ex parte, without prior service
on the
respondents.
11.The
second issue pertains to whether the Court can confirm the
substitution of Murray for Motshekga in terms of
Rule 15(4)
, pursuant
to a
Rule 15(2)
notice served on the respondents on 13 August 2015.
12.
And finally, on the merits, the Court is enjoined to determine
whether the first and second respondents enjoy a complete defence
to
the eviction relief sought against them by the trustees. In essence,
the issues revolve around the balancing of competing interests:
the
rights of Rayman and the occupiers, on the one hand, against the
rights of the bondholder over the property, FRB, and the creditors
of
Rayman's insolvent estate, on the other.
13.
It is important at the outset to mention the statement made by
Rayman, in his opposing affidavit dated 21 May 2015, as follows:
"Save
to admit that we cannot expect to occupy the Property free of charge
for an indefinite period of time, the remainder
of these paragraphs
are denied."
14.
The following sequence of events merits mention.
15.
As a consequence of Rayman's default on the bond in favour of FRB,
the latter instituted an action against him in the North
Gauteng High
Court and took judgment, including an order declaring the property
specially executable. FRB proceeded to attach the
property and
advertise same for sale in the Government Gazette, the sale date
being 20 June 2012. In toto, FRB advertised the sale
on five
occasions, namely 20 June 2012, 21 November 2012, 15 April 2013, 9
December 2013, and 3 March 2014.
16.
On every occasion following the placement of the adverts, Rayman
published a notice to surrender his estate as insolvent, in
the
Government Gazette. Such notices being dated 15 June 2012, 16
November 2012, 11 October 2013, 6 December 2013, and 24 February
2014.
17.
On 5 May 2014, Rayman was provisionally sequestrated at the behest of
one Amlanathan Naidu. The final order was granted on 7
July 2014.
18.
Motshekga and Jacobs were appointed on 5 September 2014 as joint
provisional trustees to Rayman's estate.
19.
On 24 November 2014, the trustees obtained a written valuation of the
property from professional associated valuer Jolandi Kok.
The value
provided by her amounted to R1 100 000,00 on a forced sale basis.
20.
Circa December 2014, at the invitation of Rayman, Saenger took
occupation of the property, in addition to Rayman and his family.
21.
In March 2015, according to the trustees, Rayman promised to pay rent
for the property and to vacate same by 31 July 2015. The
vacation
date was extended to 31 August 2015.
22.
By 13 April 2015, Rayman and the occupiers had, despite his
insolvency, continued to remain in occupation without paying any
rent. The provisional trustees accordingly commenced eviction
proceedings under the PIE Act. At the time, the provisional trustees
were Messrs Motshekga and Jacobs.
23.
On 29 April 2015, following the ex parte application envisaged under
the PlE Act, this Court granted an order for leave to serve
the
entire application and the mandatory notice in terms of section 4(2)
of the PIE Act on the respondents, with the appearance
date being 27
May 2015. Simultaneously, the Court granted leave to the provisional
trustees to bring the proceedings and to bring
the ex parte
application under
section 18(3)
of the
Insolvency Act 24 of 1936
.
24.
The above documents were thereafter served on the respondents and, on
30 April 2015, Rayman and the occupiers gave notice of
their
intention to oppose the application. An opposing affidavit was served
on 22 May 2015 and the replying affidavit was served
on 18 August
2015.
25.
In the meantime, on 10 July 2015, Messrs Murray (in lieu of
Motshekga) and Jacobs were appointed as final trustees in Rayman's
insolvent estate. On 13 August 2015, the applicants served a
rule
15(2)
notice to substitute Murray for Motshekga. On 10 September
2015, Rayman and the occupiers launched an application to set aside
the
rule 15(2)
notice. This application was opposed by the
applicants, and their opposing affidavit was served on 15 October
2015.
26.
On 22 September 2015, the trustees' conduct in these eviction
proceedings was ratified by a meeting of creditors in the estate.
27.
On 22 April 2016, four days before the hearing, Rayman and the
occupiers served a further application, this time to set aside
paragraph 4 of the ex parte order of 29 April 2015 which gave leave
to the trustees in terms of
section 18(3)
of the
Insolvency Act, to
launch the eviction application. I placed on record that I could
regard this application as pro non scripto since it was not before
me. Nevertheless, in argument, Counsel for Rayman and the occupiers
addressed oral argument to me concerning the invalidity of
paragraph
4 of the ex parte order, this because it prevented the first and
second respondents from challenging the trustees' authority
to launch
the application in the first place.
28.
I refer to the
rule 15(2)
notice. Counsel for Rayman and the
occupiers maintains that the notice attempts to substitute one legal
party for another. This
is a misconception of the facts. There is no
attempt to substitute litigating parties. The litigating party has
remained at all
times the insolvent estate of Rayman. The identity of
one of the trustees of the estate has changed., Murray has been
finally appointed
as trustee instead of Motshekga, who was a
provisional trustee. At all times material hereto, Motshekga and
Jacobs represented
the estate of Rayman, qua provisional trustee, and
thereafter, on the final appointment, Murray and Jacobs represented
the estate
as final trustees.
29.
Moreover, in terms of
section 76(2)
of the
Insolvency Act, the
Court
may permit substitution in the given circumstances.
30.
In terms of rule 15(4) of the Uniform Rules, and
section 76(2)
of the
Insolvency Act, I
hereby confirm the substitution of Murray for
Motshekga as joint final trustee, with Welcome Jacobs, in the
insolvent estate of
Rayman.
31.
On 22 June 2015, the ex parte order was served personally on Rayman,
and on Rayman as representative of the occupiers. No steps
were taken
until 22 April 2016 to apply to set aside paragraph 4 of this order.
32.
In my respectful view, there is no merit in the contention that
Rayman and the occupiers were prejudiced by the grant of
authorisation
by the Court in their absence. In the ex parte
application, the Court was satisfied that the requirements of
section
18(3)
of the
Insolvency Act had
been met and that authorisation could
be granted ex parte. Indeed, the launch of the application as an ex
parte application is
a process prescribed by the PlE Act, so there
was no alternative avenue to pursue in casu.
33.
Unless and until this part of the order is set aside, I am entitled
to assume the validity of the order in its entirety. See
further
Warricker
and ano
NNO
v Liberty Life Association
of
Africa
Limited
2003 (6) SA 272
(W) at
276.
34.
The requirements for section 18(3) were indeed met, and endorsed by
the Court on 29 April 2015. To the extent necessary, they
are hereby
endorsed again, namely, that, at inception of proceedings, some
degree of urgency existed, that the cause of action
was prima facie
enforceable, and that the interests of the creditors would not be
prejudiced by such proceedings.
35.
On the assumption that paragraph 4 of the order was not correctly
granted, for whatever reason, albeit that this has not been
proved,
then, in any event, this Court has the jurisdiction to ratify the
conduct of the provisional trustees. See
Kessack's
Provisional Trustee
v
Kessack
and Kessack
1919
WLD
31
at 32.
Without conceding the necessity herefor, but to the
extent to which this is appropriate, this Court, in the exercise of
its discretion,
authorises the launch of this application, ex post
facto.
36.
I turn to the merits of the defence raised.
37.
These are the reasons which Rayman and the occupiers give in
motivating their refusal to vacate: The property is his family
home,
where the family has lived since 2004. It is safe and comfortable
enough to enable the family to "tackle the challenges
of
everyday life". He maintains the property and effects repairs.
He causes no damage to it. He has co-operated with the trustees
in
affording their agents access to the property. The property is
secured against theft and vandalism while if vacant this would
not be
the case. He always ensures that the water, rates and taxes are
timeously paid. (In May 2015, rates and utilities amounted
to about
R2 800,00 per month.) There are two minor children living on the
property.
38.
He is insolvent. He is currently unemployed and in the process of
trying to obtain work. His wife is employed by Momentum limited
earning R12 000,00 per month. His wife has been working there for the
past sixteen years. He lives
off
his wife's income
which is also used for daily household necessities, living expenses,
school related expenses and costs associated
with the property. His
wife's income is insufficient for their needs. They had been forced
to seek financial assistance from the
children's schools. They cannot
afford alternative accommodation. The property is close to his wife's
place of work, and the schools.
The children's schooling will be
disrupted if the family is evicted. If they are evicted, his wife's
depression and anxiety might
recur. She had been on anti-depressant
medication for three years but was no longer taking this. When he
secures a job, he would
make an arrangement with FRB to save his
home.
39.
Rayman articulates the cause for his insolvency as follows: "During
2010, due to circumstances beyond my control and due
to no fault of
my own, I had begun to experience financial difficulties. I sought
assistance from Debt Rescue, an authorised debt
councillor (sic), and
restructured my debts so that I could re-build my income stream to a
point where I could afford to pay for
whatever liabilities I
had...However, my attempts had failed."
40.
For the following reasons, the trustees seek the eviction of Rayman
and the occupiers. Rayman and the occupiers are in occupation
free of
charge, to the detriment of the insolvent estate and its creditors,
including FRB. Rayman and the occupiers have no right
at law to
remain in occupation of the property. The value of the property is
diminishing at an alarming rate. Access to the property
for
prospective buyers is problematic. The sale of the property whilst it
is unlawfully occupied would deter any prospective purchasers
from
acquiring same. The property is not being properly maintained. The
first and second respondents are "dragging their feet
and
playing for time at the expense of the insolvent estate." As
trustees, the applicants are obliged to protect the interests
of the
insolvent estate and to wind same up as expeditiously as possible, by
selling assets and attending to the distribution of
dividends to
creditors.
41.
In weighing the interests of the concursus creditorum against those
of the occupiers of the property, I am mindful of the dictum
in the
case of
City of Johannesburg v Changing
Tides
74 (Pty) Ltd
2012 (6) SA 294
(SCA) at 311F -
312C:
"A
court hearing an application for eviction at the instance
of
a
private person
or
body, owing no
obligations to
provide housing or
achieve
the
gradual
realisation
of the
right of access
to housing
in
terms of s 26(1) of the
Constitution, is faced with two
separate enquiries. First it must decide whether
it
is
just
and
equitable
to
grant an
eviction order
having
regard to
all
the
relevant
factors. Under
s4(7)
these
factors
include the
availability of
alternative
land
or
accommodation.
The
weight to be attached to that
factor
must be assessed in the light of the property owner's protected
rights
under s25 of the
Constitution, and on the footing that
a
limitation
of those rights in favour
of the
occupiers
will ordinarily be limited in
duration.
Once
the
court
decides
that there is no defence
to the
claim
for
eviction
and that
it would be just
and
equitable
to
grant
an
eviction
order,
it is
obliged
to grant that order.
Before doing
so,
however, it must consider wha
t
justice
and equity
demand in relation
to the date
of implementation
of that order
and it
must
consider
what conditions must
be
attached to
that
order. In
that
second
enquiry
it
must consider
the
impact
of
an
eviction
order
on
the
occupiers and
whether
they may be rendered homeless
thereby or need
emergency assistance to relocate elsewhere. The
order
that
it
grants
as
a
result
of
those
two
discrete
enquiries is
a
single order.
Accordingly
it
cannot be granted until
both enquires have been
undertaken
and
the conclusion
reached
that the
grant of an eviction order,
effective
from
a specified
date,
is
just
and
equitabl
e.
Nor can the enquiry
be
concluded until
the
court
is
satisfied that
it
is
in
possession of
all
the information
necessary
to make both
findings based
on
justice
and
equity. (my emphasis).
42.
1 have taken note of the fact that Rayman had the financial
wherewithal, in 2005, to acquire a home for over half a million
rand,
(R550 000,00 to be precise), in cash. Thereafter, in 2007, he
procured a bond for the substantial sum of R1 353 000,00. There
is no
indication in his opposing affidavit as to what he did with this
money.
43.
Rayman was obviously generating enough income to qualify for a
substantial bond, and he generated enough income to pay the bond
instalments from 2007 until December 2011. Cognisance can therefore
be taken of Rayman's income potential. There is no reason given,
compelling or otherwise, as to why this income potential cannot be
resuscitated and exploited in the future.
44.
It is plain from the papers that Rayman was patently mala fide in
deliberately frustrating FRB in its legitimate efforts to
sell the
property in execution, by publishing a notice to surrender on five
occasions, in alignment with FRB's notices advertising
the sale in
execution. The last bond instalment paid to FRB was on 9 December
2011.
45.
By May 2016, Rayman was four years and four months in arrears with
his bond instalments, and with no stated intention of wishing
to
enter into any form of arrangement at all at any defined date in the
future.
46.
Since his sequestration in May 2014, Rayman has steadfastly refused
to vacate the property, while simultaneously refusing to
make any
payments for rent to the trustees.
47.
Rayman himself has admitted that he and the occupiers
"cannot
expect to occupy the property free of charge for an indefinite period
of time".
(my emphasis). This admission was made almost a
year ago, in May 2015. One may infer from this that, a year ago,
Rayman had the
expectation that his unlawful occupation had to have a
cut-off date, and that this was realistic.
48.
By May 2016, some two years have elapsed since Rayman's provisional
sequestration. For some two years, the trustees of Rayman's
estate
have been unable to discharge their duty to realise the assets in the
insolvent estate so as to pay dividends to creditors,
and complete
the winding up process, as they are obliged to do. If they did not
launch this application, they could have stood
accused by the
creditors in the estate of a dereliction of duty.
49.
On material issues, Rayman is less than candid. Rayman is silent on
whether his close friend Saenger pays any rent for his occupation
of
part of the property, considering that Saenger is working. He does
not state that Saenger is not making contributions. Rayman
also gives
no detail of the efforts made by him to secure gainful employment. He
does not aver that he is physically or mentally
unable to work. One
cannot exclude the possibility that his continued unlawful occupation
of the property at no charge might have
disincentivised him against
securing work.
50.
He is disturbingly vague about the cause of his insolvency. While he
asserts that his wife has suffered from depression and
anxiety, it is
clear that she is still functional in the work place and has been in
stable employment with her employer, Momentum,
for the past sixteen
years. Presumably, certain benefits arise from such long term
employment, and this may include advances of
money to employees, but
no disclosure is made about this.
51.
If the eviction occurred, the same reasons for obtaining financial
assistance from his children's schools as now would prevail,
and so
would the basis for such assistance. The sum of about R2 800,00 per
month, previously paid on rates and utilities, will
become available
to pay towards the rent for alternative accommodation.
52.
There is no suggestion that there is no accommodation available in
the first and second respondents' suburb for rental, or that
such
rental is beyond their means.
53.A
notice period of just under three months will afford the occupiers a
fair and reasonable time within which to rearrange their
affairs. In
my respectful view, they will not become homeless. They possess the
potential to re-arrange their affairs so as to
find the wherewithal
to make payment for alternative accommodation.
54.
If bondholders were expected to grant indefinite moratoriums on the
repayment of their bonds, and to permit the indefinite occupation
of
their only security, to accommodate recalcitrant debtors, the
commercial rationale behind the money lending business would cease.
55.
If trustees were expected to defer the winding up process, and to
permit indefinite occupation of property falling within the
estate,
to accommodate recalcitrant insolvents, insolvent estates would take
decades to wind up, and this would redound adversely
on the interests
of creditors.
56.
The dire economic repercussions aside, the parties who would
ordinarily discharge their debts could be deprived of the benefit
of
housing, through financial assistance from the banks, when this is
the only avenue available to them to do so.
57.
Taking all relevant facts into consideration, I find it just and
equitable that Rayman and the occupiers should be evicted from
the
property, on just two days short of three months' notice.
58.
The application being successful, costs should follow the result,
albeit that the costs order against Rayman will be against
his
insolvent estate.
59.
In the result, the following order is made:
a.
The first and second respondents, (and all other persons and/or
individuals who occupy and/or claim the property through them)
are
ordered to vacate the property known as erf […] Pretoria,
Gauteng, corresponding with […], Centurion, Pretoria,
Gauteng
("the property"), by no later than 12h00 midday on 31 July
2016;
b.
Should the first and second respondents (and all other persons and/or
individuals who occupy and/or claim the property through
them) fail
to comply with the order in paragraph
a
above, the sheriff of
this Court is hereby authorised to take all necessary steps to
execute this order to evict the first and
second respondents, (and
all other persons and/or individuals who occupy and/or claim the
property through them) from the property
and, if necessary, to obtain
the assistance of the South African Police Services to assist him/her
in this regard;
c.
Directing the first and second respondents to pay the costs of this
application, jointly and severally.
______________
BRENNER
AJ
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
3 May
2016
Appearances
Counsel for the First
and Second
Applicants
Advocate J Hershensohn
Instructed
by
Attorneys Rorich Wolmarans and Luderitz
Counsel for the First
and
Second
Respondents
Advocate S Hussein-Yousuf
Instructed
by
Attorneys Mothle Jooma and Sabdia Inc