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[2016] ZAGPPHC 417
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Lurie v Finkelstein and Others (89859/2014) [2016] ZAGPPHC 417 (9 June 2016)
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IN THE NORTH GAUTENG
HIGH COURT, PRETORIA
(REPUBLIC OF SOUTH
AFRICA)
CASE NO: 89859/2014
9/6/2016
Not reportable
Not of interest to other
judges
Revised.
In the matter between
MARION
LURIE APPLICANT
And
MARK
FINKELSTEIN FIRST
RESPONDENT
PROUD HERITAGE
PROPERTIES 169 (PTY) LTD SECOND
RESPONDENT
THE STANDARD BANK OF
SOUTHAFRICAN LIMITED THIRD
RESPONDENT
THE SHERIFF OF THE
HIGH COURT, STANDTON SOUTH FOURTH
RESPONDENT
THE LAW SOCIETY OF THE
NORTHERN PROVINCES FIFTH
RESPONDENT
ESEBETSE TRADING &
PROJECTS (PTY) LTD SIXTH
RESPONDENT
QUANTUM LEAP
INVESTMENT 88 (PTY) LTD SEVENTH
RESPONDENT
MAKHADO PROJECT
MANAGEMENT (PTY) LTD EIGHTH
RESPONDENT
JUDGMENT
MOSEAMO AJ
INTRODUCTION
[1] The Applicant seeks
an order in the following terms:
'1. That the sum of R651,
220.00 attached by the Fourth Respondent on the instructions of and
pursuant to a writ of attachment issued
by the Second respondent from
the monies standing to the credit of the trust banking account
conducted by the First Respondent
under account number […], on
or about 24 October and removed from the First Respondent's said
trust banking account on or
about 25 November 2014, be declared the
sole and absolute property of the Applicant:
2. That the attachment by
the Fourth Respondent of the sum of R651, 220.00 on the instruction
of and pursuant to a writ of attachment
issued by the Second
Respondents, from the monies standing to the credit of the trust
banking account conducted by the First Respondent
at the Germiston
branch of Third Respondent under account number […], on or
about 24 October and removed from the First
Respondent’s said
trust banking account on or about 25 November 2014 be set aside;
3. That the Third
Respondent be hereby interdicted from paying the said sum of R651,
221.00 into the First Respondent's trust account;
4. That the Third
Respondent make payment of the sum of R651,220.00 to the Applicant's
attorneys of record, namely Rapeport Incorporated
at Nedbank, account
number […], Killarney Branch, Branch code […];
5. That the First
Respondent pay to the Applicant damages in the form of Interest on
the sum of R602, 500.00 at the prime rate plus
2% per annum thereon
from 12 December 2014 to the date that the Third Respondent complies
with the provisions of 4 above, in full;
6. That the costs of this
Application be paid by the First and the Second Respondent (and any
other Respondent that opposes this
Application), on the scale as
between attorney and client, jointly and severally, the one paying
the other to be absolved.'
[2] Only the second
respondent opposes the application. The second respondent brought an
application for the condonation of the
late filing of the answering
affidavit which although the applicant initially opposed the
application for condonation in her papers,
at the hearing of the
application the opposition was abandoned.
[3] According to the
second respondent the delay in filing the answering affidavit was as
a result of the application for joinder
of the 6
th
, 7
th
and 8
th
respondent as parties to this application which
was necessary. There was a further delay which was occasioned by an
error which
led the 8
th
respondent being joined later than
the 6
th
and 7
th
respondents. I find that the
second respondent has shown good cause for non compliance with the
rules and further that the applicant
will not suffer any prejudice
and therefore the condonation application should succeed.
[4] Applicant's counsel
indicated that an out of court settlement was reached with the first
respondent and therefore they will
only be seeking costs against the
second respondent. The settlement agreement was handed in.
BACKGROUND
[5] On or about 25th
September 2014 at Johannesburg applicant entered into a written
agreement with Shamain Dayal (Dayal) in respect
of which she sold her
property, a sectional unit situated at section 11 Tibidabo, situated
at […] L… road, Corlett
Gardens, Johannesburg for the
sum of R1 200 000. Applicant instructed the first respondent who is
her cousin, to attend to the
convenyancing in respect of the said
sale. Dayal paid an amount of R1 215 844.60 and R22 000 in respect of
the purchase consideration
and the legaI costs for registration of
the transfer on the 18
th
November 2014.
[6] Subsequent to the
sale of her property applicant purchased a new property at 46
Dowerwiew, Johannesburg. Bennet McNaughton are
the conveyancers who
were appointed to transfer the property to the applicant. The first
applicant paid an amount of R500 000 to
Bennet McNaughton on the 8
th
December 2014 which is only part of the money held by him in trust.
The first respondent failed to pay the balance required by
Bennet
McNaughton to effect the transfer of the property to applicant's
names.
[7] Applicant obtained a
loan in the sum of R602 500 after the first respondent indicated to
Bennet McNaughton that he does not
have the balance in his trust
account as the money had been attached in a totally unrelated matter.
Applicant required the amount
of R602 500 to ensure the simultaneous
transfer of the property she sold and the property the bought. Both
properties were subsequently
transferred on the 12
th
December 2014.
[8] The facts relating to
the attachment of the money in the first respondent's trust account
is as follows:
[8.1] There was a dispute
between the second respondent represented by Jacobus Coenradus
Scholtz (Scholtz) and Esebetse Trading
& Projects (Pty) l.td
(Esebetse) and Quantum Leap Investment 88 (Pty) Ltd (Quantum) who are
first respondent’s clients.
The first respondent was required
to pay over the money held in trust to Scholtz for the benefit of the
second respondent in respect
of a court order.
[8.2] When the first
respondent failed to pay over the money, second respondent issued a
writ of attachment against movable goods
of Esebetse for R651 220.
The writ authorises attachment of an amount of R355 000 from the
first respondent's trust banking account.
The fourth respondent
attached an amount of R651 220 from the first respondent's trust
account.
[9] The second respondent
raised numerous defences to the applicant's application. Among others
the second respondent raised the
defence that (a) the money that was
attached does not belong to the applicant; (b) attachment not
completed as second respondent
has not been notified of the
attachment by the sheriff; (c) non-joinder of Dayal.
[10] I firstly wish to
deal with the applicant's right to bring this application. The
applicant is claiming an order that the money
that was attached by
the fourth respondent from the first respondent's account be declared
her sole and absolute property. An applicant
for a declaratory relief
must set out her contentions regarding her alleged right and the
Interest she has in the right.
[11] It is submitted on
behalf of the applicant that the money that was attached by second
respondent and fourth respondent belongs
to the applicant as it was
deposited by Dayal as consideration for the purchase of her property.
It is further submitted that the
money is easily identifiable as at
the time Dayal deposited the money, there was no money in the first
respondent's trust account.
It was further contended that the trust
account protects the applicant as the first respondent is required to
keep a record of
trust creditors.
[12] It is submitted on
behalf of the respondent that the applicant’s contention that
the money that was attached by second
and fourth respondent belongs
to her is fundamentally flawed. The respondent contends that once the
money is deposited into a bank
account it becomes property of the
bank, that the account holder acquires a personal right against the
bank in respect of the amount
deposited.
[13] Respodent relied on
the case of Trustees of the Insolvent Estate of Graham Ernest John
Whitehead v Leon Jean Alexandre Dumas
and Absabank (323/12)
[2013]
ZASCA 19
(20 March 2013) where It was stated:
'Generally, where money
Is deposited into a bank account of an account holder It mixes with
other money and, by virtue of commixtio
becomes property of the bank
regardless of the circumstances in which the deposit was made or by
whom it was made. The account-holder
has no real right of ownership
of the money standing to his credit but acquires a personal right to
payment of that amount from
the bank, arising from their
bank-customers relationship. This la also so where, as in this case,
no money in its physical form
is in issue, and the payment by one
bank to another, on a client'• instruction, is no more that an
entry in the receiving
bank's account. The bank's obligation, as
owner of the funds credited to the customer's account, is to honour
the customer's payment
instructions. Where the depositor is not the
account holder he relinquishes any right to the money and cannot
reverse the transfer
without the account holder's concurrence.'
[14] It Is a long
established principle that money when deposited into a bank account
it ceazes to be the principal's money; It
is then the money of the
banker who is bound to return an equivalent by paying a similar
amount to that deposited on demand. See
R v Stanbridge
1959 (3) SA
274
at 278 B H
[15] In Rosseau NO v
Standard Bank of SA LTD
1976 (4) SA 104
CPD at 106 B·D,
Watermeyer J stated 'The legal relationship between a banker and a
customer whose account is in credit is
that of the debtor and
creditor. The customer is a creditor who has a claim against the bank
in the sense that he has a right to
have it make payments to him, or
to his order, on cheques drawn by him up to the amount by which his
account is in credit (see
Ormerod v Deputy Sheriff Durban,
1965 (4)
SA 670
D at.p673; De Hart NO v Kleinhans and Others,
1970 (4) SA 383
(O) at p387; S v Kotze
1965 (1) SA 118
(AD) at p124) Ownership of the
money standing to a customer’s credit in his bank account,
although it is losely spoken of
as the “customer's money”,
is however vested in the bank...'
[16] It was contended on
behalf of the applicant that the money held by an attorney in his
trust account is different in that the
mandatory record keeping makes
the money is easily identifiable. S78(1) of the Attorneys Act. 53 of
1979 compels a practising attorney
to keep a separate trust account
at a banking institution within the Republic and to deposit therein
the money held or received
by him on account of any person.
[17] In terms of s78(7)
of the Attorneys Act the amount standing to the credit of an
attorneys' trust account shell not form part
of that attorneys assets
and as such shall not be liable to attachment at the instance of any
creditor of such an attorney. I must
state that the money attached
was not attached at the instance of the first respondent's creditors
and therefore it does not fall
foul of 178(7).
[18] The nature of the
attorney's trust account was dealt with In the case of Fuhri v Geyser
NO and Another
1979 (1) SA 747
(N) at 749 C.E by Hefer J as follows:
'Despite the separation
of trust moneys from an attorneys assets thus affected by s33(7), It
is clear that trust creditors have
no control over the trust account:
ownership in the money in the account vests in the bank or other
institution in which it has
been deposited (S v Kotze
1965 (1) SA 118
(A) at 124), and it is the attorney who is entitled to operate on the
account and to make withdrawals from it (De Villiers NO v
Kaplan
1960
(4) SA 476
(C)). The only right that trust creditors have, is the
right to payment by the attorney of whatever is due to them, and it
is to
that extent that they are the attorneys creditors. The right to
payment plainly arises from the relationship between the parties
and
has nothing whatsoever to do with the way in which the attorney
handles the money in his trust account.'
[19] In the case of Louw
NO and Others v S J Coetzee and Others,
[2003] 1ALL SA 3A
(SCA) (29
November 2002) the court considered whether the deposits in an
attorney's trust form part of the bank's assets. The respondents
in
this matter had successfully argued in the court a quo that the funds
deposited by an attorney in terms of s78(2A) of the Attorneys
Act
were precluded from becoming part of the bank's assets in terms of
Act 28 of 2001. The court found that the principle that
money once
deposited into a bank account becomes the property of the bank and
that the bank had an obligation to return not the
exact money
deposited, but an equivalent amount had not been altered by the
expanded definition of trust property in Act 28 of
2001.
[20] It Is not in dispute
that: (a) the money deposited by Dayal into first respondent's trust
account was to be paid to the applicant
upon the transfer of the
property; (b) the money that was attached by the second and fourth
respondent in the first respondent's
trust account was deposited by
Dayal. Upon transfer of the applicant's property to Dayal, the
applicant became the trust creditor
of the first respondent.
[21] Following the
appro11cll In the Dumas case and Fuhri's case Dayal as the depositor,
relinquished any right to the money when
she deposited it into first
respondent's trust account. First respondent as the trust account
holder has a personal right to payment
of that amount from the bank
which arises from the bank-customer relationship. The money that was
deposited by Dayal becomes the
property of the bank by virtue of
commixtio. Although the cases dealt with the sequestration of the
account holders, the principle
applicable is the same.
[22] It therefore follows
that although the applicant became entitled to the amount paid in by
Dayal after the transfer of her property
to Dayal, she cannot claim
the money that was attached as her money. Upon the transfer of her
property the applicant became entitled
to the money and thus became a
trust creditor of the first respondent.
[23] The applicant
therefore has a claim against the first respondent and not the bank.
In my view first respondent as the account
holder is the one who has
the right to claim the money that was attached by the second and the
fourth respondent and not the applicant.
In the result I find that
the applicant has failed to prove that she has the right to bring
this application and therefore on that
basis alone the application
stands to be dismissed. In view of the above conclusion it is
therefore not necessary for me to deal
with the rest of the defences.
[24] I now turn to deal
with the issue of costs. It is common cause that the dispute resulted
from the first respondent's failure
to comply with a court order
granted in favour of the second respondent and also his failure to
comply with his obligations to
pay the money paid by Dayal to Bennet
McNaught as instructed by the applicant. '
[25] The first respondent
did not oppose the application but entered into a settlement
agreement with the applicant. It does not
appear that the first
respondent did anything to recover the attached money.
[26] It has frequently
been emphasized that in awarding costs, the court has a discretion to
be exercised judicially upon consideration
of the facts of each case.
Further that the law contemplates that the court will weigh the
issues in the case, the conduct of the
parties and any other
circumstance which may have a bearing on the issue of the costs and
then make such order as to costs as would
be fair and just between
the parties.
[27] In my view the
second respondent and the applicant were both victims of the first
respondent's unprofessional conduct. I therefore
find that this is
one case where the costs should not follow the results.
In the result I make the
following orders:
1.
The applicant's late filing of the answering
affidavit is hereby condoned.
2.
The application is dismissed.
3.
Each party to pay its own costs.
__________________________
P O MOSEAMO
ACTING JUDGE OF THE
HIGH COURT