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[2016] ZAGPPHC 863
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Nedbank Limited v Molebaloa (37780/2015) [2016] ZAGPPHC 863 (12 August 2016)
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REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
DATE:
12 August 2016
CASE
NO: 37780/2015
In
the matter between:-
NEDBANK
LIMITED
Applicant
And
JOHANNES
MOSHOEU MOLEBALOA
Respondent
JUDGMENT
BEFORE:
CR JANSEN AJ
[1]
In this matter the Applicant obtained
judgment by default against the Respondent on 12 February 2016 for an
amount of R297 468.66,
plus certain interest on the above amount
as determined by a loan agreement between the parties.
[2]
The
cause of action was the usual claim for the accelerated payment of a
loan secured by a mortgage bond registered against an immovable
property which previously served as the primary residence of the
Respondent and his ex-w
ife.
The property is situated at 3 S R, P Ridge, A.
[3]
It
should be noted that the original
loan was for an amount of R
120
000.00. Over time, cumulative interest and a string of debits listed
as “legal fees” caused the debt to grow out
of proportion
to the original sum.
[4]
At the time the default judgment was
granted, a prayer to have the mortgaged property declared specially
executable was postponed
sine die.
This appears to be the practice in this division since the full bench
judgments of
Nedbank Limited v
Mortinson
[2005] ZAGPHC 85
;
2005 (6) SA 462
WLD
and
FirstRand
Bank v Folscher
2011 (4) SA 314
GNP
[1]
.
[5]
A
nulla bona
return
was subsequently filed by the deputy sheriff, which then paved the
way for execution against immovable property.
[6]
I
was informed from the bar that the attachment of the primary
residence became embroiled in complications as a result of the
divorce
proceedings between the Respondent and his ex-wife.
[7]
Further
deeds registry searches by the Applicant revealed that a second
property is registered in the name of the Respondent. This
property
is situated at 9 M S, M, S.
[8]
The
attachment and execution process then turned to this property and its
residents. In pursuit of the original default judgment,
a writ of
execution against movables was issued for the judgment debt plus
interest, together with costs in the amount of R650.00.
[9]
The
sheriff then visited the premises at 9 M S, M, S on no less than
three occasions. The sheriff again issued a so-called
nulla
bona
return which reads as follows:
“
It
is hereby certified:
That
after attempts as listed below the warrant of execution could not be
executed at 9 M S, M, Soweto, as neither the Defendant
nor any
attachable assets could be found.
The
premises is constantly locked and it could not be ascertained whether
the Defendant resides at the given address or whether
the Defendant
has any attachable assets.”
[10]
The Plaintiff then duly proceeded with an
application to have the property at 9 M S declared “specially
executable”
in terms of rule 46(1)(a)(ii) of the Uniform Rules
of Court. Again, this was done in accordance with what appears
to be the
practice after the rule changes which followed the
Jaftha
(supra at footnote 1)
and
Gundwana
(supra at footnote 1)
judgments of the
Constitutional Court
[2]
.
[11]
The
above practice in default judgment applications is aimed at giving a
measure of protection to the primary residence of mortgagors
against
the relentless process of debt collection. There is, as this case
illustrates, an additional class of residence that requires
Constitutional protection against the unforgiving collection and
execution process, namely that of the “family home”,
being a widespread and well entrenched form of residential tenure in
urban areas.
[12]
When
this matter was called, the Respondent was in court and informed the
court that he wished to oppose the granting of the order
authorising
execution and wanted to place certain information before the court.
Upon enquiry, he confirmed that he was indebted
to the Applicant. He
was, however, very concerned that the property at 9 M S might be sold
on an auction, as this house was a “family
house” where
his siblings and some of their dependants lived. This “family
house” was not the house in respect
of which the debt had been
incurred.
[13]
Counsel
for the Applicant submitted that, as the property at 9 M S, M, is not
the primary residence of the Respondent, the proviso
to rule
46(1)(a)(ii) did not apply and that attachment of this property could
proceed without the enquiry into “all relevant
circumstances”.
In other words, although all the practice directives in respect of
judicial oversight had been complied with,
the immovable property
sought to be attached at 9 M S, is not the bonded property and would
appear to be an additional property
of the Respondent, not his
primary residence. As such, it did not, strictly speaking,
qualify for the additional procedural
and judicial oversight
protection provided in respect of a primary residence.
[14]
What
appeared to be a routine default judgment following the established
practice which involves judicial oversight over every significant
component of the debt enforcement and execution process, transpired
to be something very different once the matter was called and
the
facts scrutinised. The house at M S was not a “second property”
with tenants in occupation. It was a
family
home
with family members of the
registered owner in occupation.
[15]
The
Respondent informed the Court that the house originally belonged to
his parents. After they passed away, the house was
registered
in his name as the eldest son.
[16]
From
the printout of the electronic deeds registry search which was
attached to the founding affidavit of the application, it appears
that this property was previously registered in the name of the City
of Johannesburg under title deed number T4. This fact should
have
raised red flags with the bank’s officials involved in the
collection process.
[17]
This information in respect of historic
ownership of the property suggests that this was probably a township
property administered
under the 1968 regulations dealing with
residential properties in what was then Black townships
[3]
.
In addition, it was probably later transferred in ownership to the
occupants in terms of subsidised housing transfers. As such,
it would
engage the provisions of
section 10B(1)
of the
Housing Act 107 of
1997
[4]
.
On the papers I cannot make a definitive finding on these issues,
however, on the face thereof, this history of ownership and
transfer
would seem to be the most probable.
[18]
This
aspect of the matter should have received more attention by the
drafter of the application. Despite this history of ownership,
a
manager of the Applicant declared under oath in the affidavit
supporting the application to have the property declared executable,
that the property had not been acquired with any state assistance.
This statement seems to have been made by rote, and could very
well
turn out to be incorrect upon further investigation.
[19]
Apart
from the fact that the state should register its interests in terms
section 10B
of the
Housing Act more
clearly on title deeds, persons
involved in the attachment and execution against immovable properties
must be more circumspect.
Whenever a property was previously
registered in the name of an organ of state such as a provincial
housing board, a municipality,
the South African Development Trust,
the Independent Development Trust or the like, such fact must be
brought to the attention
of the relevant department of human
settlements at provincial level in order for such department to
exercise the state’s
rights under the section.
[20]
I
mention the possible relevance of
section 10B
of the
Housing Act as
an aside, and as something that should be considered before the
matter is set down again. However, the problems with this application
go much further and touch on another very important issue, namely the
precarious position of persons occupying a
family
home
when faced with debt enforcement
proceedings against the registered owner, being the designated
head
of household
.
[21]
From the limited information given by the
Respondent, Mr Molebaloa, it would appear that he is not the owner in
the usual sense
of the word. He probably holds ownership as the
head
of the household
, as this term is used
in customary indigenous law
[5]
.
[22]
Just
as the judicial oversight over the collection and attachment process
in respect of primary residences is now firmly established
in the
Uniform Rules of Court and in the practice of our High Courts, in the
same way so-called
family homes
should be protected from the vagaries of the legal process. These are
primary residences of a special kind that are largely invisible
to
the legal system, as the deeds registry system does not properly
cater for this form of ownership.
[23]
Family
homes
, in their legal context, often
feature in judgments dealing with
intra
-family
disputes, although very little is found on the subject in reported
judgments, despite the fact that hundreds of thousands
of South
Africans, if not millions, probably live in homes which they describe
as
family homes
.
[24]
I could find a number of unreported
judgments that refer to
family homes
,
and to the special relationship between the person ostensibly
registered as the owner of the property and the other occupants,
normally family members of the former. However, the relationship
between the owner and the property is generally analysed in the
paradigm of individualised and registered common law ownership, and
not in the context of indigenous law. The special relationship
between the occupants and the ostensible owner is not translated into
a real limitation of the title.
[6]
[25]
In the reported judgment of
Du
Plooy and Another v Du Plooy and Others
[7]
the Supreme Court of Appeal dealt with such an
intra
-family
dispute as a matter involving possible joint ownership. A “family
home” as an object of customary law was neither
raised, nor
considered in that matter.
[26]
The special relationship between the
ostensible owner of a family home and the other members of the
family, especially those occupying
the house, should, in my
respectful view, also be enforceable or protectable against third
parties such as creditors of the ostensible
owner
[8]
.
For this to happen, the relationships created by customary law must
be reflected in the deeds register.
[27]
The fact that individual and family tenure
rights in rural areas are not reflected in the deeds register, is
well known. I quote
from an article by Professor Gerrit Pienaar
which highlights the problems caused by the fact that tenure rights
in respect
of communal land are not reflected in the deeds
registry:
[9]
In
South Africa two diverse property regimes exist alongside one
another, namely the system of individualised, common-law
landownership,
predominantly based on civil-law principles, and the
system of communal land tenure, predominantly based on the shared use
of land
by communities in terms of indigenous-law principles. Added
to this is a registration system originally based on the Dutch land
registration procedures, but modified in the nineteenth century
through the introduction of English cadastral survey procedures
linked to the registration system. Only individualised common-law
landownership, co-ownership and limited real rights are registrable.
The registration system does not provide for the registration of
communal land rights, which has the effect that official information
in respect of communal
land
tenure is currently unreliable.
[28]
I would add that there is an urban
dimension to this problem as well. Official information in respect of
urban erven does not properly
reflect the
intra
family relationships which exist as a
fact, albeit it in unregistered form. Ncgobo J commented on the
ubiquity of the
family home
in South African families in the matter of
Bhe
and others v Magistrate, Khayelitsha and others (Commission for
Gender Equality as Amicus Curiae)
2005(1)
SA 580 (CC) and gave an exposition of the customary law context.
[10]
I respectfully need no further authority or evidence before me to
realise that the Respondent’s
family
home
is entitled to Constitutional
protection by virtue not only of the provisions of sections 26(1),
(2) and (3) of the Constitution,
but also by virtue of the
provisions of section 211(3) thereof.
[29]
Without professing to know the finer
details of the phenomenon, it is clear that this type of home
ownership is common in both urban
and rural Black communities.
In the urban setting, it would further appear to be a modern
phenomenon which is the result
of customary law practices being
grafted onto the urban tenure systems of the apartheid era, and
later onto the upgraded and
converted tenure systems of the
democratic era
[11]
.
[30]
The
house at 9 M S in M is a typical example. From the deeds office
printout in respect of the property, it appears that the
property was
previously registered in the name of the City of Johannesburg.
This was the positon in 1992. Thereafter,
it was registered in
the name of Mr Molebaloa. He confirmed that it was a house which had
been allocated to his parents initially.
[31]
Without
having the benefit of a precise tenure history in respect of the
property, the available information is sufficient to create
a strong
presumption that the “
ownership”
of Mr Johannes Moshoeu Molebaloa is the result of him being
designated as the “
owner”
by virtue of either the intestate succession rules of customary law,
alternatively,
the
statutory processes that were followed in terms of the relevant
legislation that converted and upgraded urban land tenure rights
and
which identified him as the person to whom registered land ownership
should pass.
[32]
There
is no doubt that Mr Molebaloa accepts that his role as the nominally
registered owner is to ensure that the house is there
for the benefit
of his family members. In other words, that a special
relationship of trust exists and that he is the
de
facto
trustee in this relationship.
That his unrelated debt to the Applicant had placed this house in
jeopardy, was his main concern.
[33]
It
would appear that many families within the Black community do not
liquidate the immovable properties of their deceased parents.
These properties, that would generally be unbonded properties,
obviously serve an extremely important socio-economic role in these
families. They serve as permanent housing for some of the
family members, and as temporary housing for family members who
are
in transit or who may be involved in a divorce. In the present
matter it would appear that Mr Molebaloa himself
resided at the
premises for a period after his divorce.
[34]
The residents in such a
family
home
are extremely vulnerable.
Their vulnerability was commented on in the
Bhe
matter (supra)
[12]
,
a matter which dealt with intestate succession in customary law. The
vulnerability also extends to occupants of homes where title
is
upgraded or converted in terms of the legislation referred to above,
as the administrative processes follow the same logic as
the
succession rules of customary law. However, such occupants will not
be vulnerable if proper recognition is afforded to the
latent
indigenous law relationships, especially those that relate to the
family home.
[35]
Much has been written about the history of
formal land tenure in urban areas, and the long shadow which it
continues to cast on
present day realities. In the matter of
Western
Cape Provincial Government and Others In Re: DVB Behuising (Pty)
Limited v North West Provincial Government and Another
[13]
,
the Constitutional Court had occasion to deal with the history of
Black urban tenure prior to 1994. Since the judgment of
DVB
Behuising
, the legislative history and
its present day context has been dealt with in the PhD dissertation
of Gustav Muller
[14]
.
[36]
The
irony is that the process of upgrading and conversion of rights to
give Black people greater tenure security and ultimately
the right of
ownership, led to a position where many persons are identified as the
owners of property where their ownership is,
or should be, limited by
the interests of their family members. The problem is caused by the
individualistic nature of the European
system of property title and
its registration in our cadastre, as described by Pienaar in the
article quoted above. Measures aimed
at granting tenure security in
urban areas have not done so within a customary law paradigm.
[37]
In
this way, an important trust relationship with its roots in
indigenous law, is invisible to the law and, no doubt, many of these
homes are lost to their beneficiaries. The present case is a good
example where a
family home
is simply viewed as a second property of the registered owner.
[38]
Family homes
,
as a phenomenon, is obviously not limited to properties that were
upgraded or converted in terms of the legislation referred to
above.
It may very well be that since 1994 ownership has devolved in terms
of succession arrangements which lead to a single
individual being
reflected as the owner of what is actually a
family
home
. In the erstwhile
“
independent home lands”
ownership of residential properties were established well before
1986
[15]
.
[39]
Such
family homes
that
are otherwise unencumbered, should not be subject to attachment and
execution processes extraneous to the liabilities of the
family and
liabilities that attach to the property itself.
[40]
Attorneys
mandated to collect debts on behalf of their clients should be aware
of the possibility that an immovable property may
be a family home
and that the registered owner of such a home should not be considered
to be the beneficial or real owner.
Such properties should also
not be encumbered without the permission of all the relevant adult
family members and they should not
be subjected to attachment in
respect of the debts of the nominal owner. Simple enquiries in
respect of the acquisition of the
property and its ownership history
will reveal this underlying relationship.
[41]
It
is not practical to have every such house registered in the name of a
formal trust registered in terms of the Trust Property
Control Act
1957 of 1988. The special status of such properties should be
directly registered against the title deed by way of
endorsement
similar to those provided for in sections 25(3) and 45
bis
of the
Deeds Registries Act 47 of 1937
.
[42]
Despite
the long history of postponements in this matter, I considered it
fair to grant Mr Molebaloa a further postponement for
a period of at
least four weeks to seek necessary legal advice in regard to the
aspects which he raised in this matter, albeit
informally and in
person. As noted above, a number of aspects in this case deserve
further investigation.
[43]
In
addition, I advised him that his siblings and the other family
members staying at the property should also seek independent legal
advice. I therefore postponed the matter
sine
die
and ordered that the matter not be
set down again for at least one month.
[44]
The concept of a
family
home
is not formally recognised in our
law
[16]
.
It is, however, a form of home ownership that requires urgent and
comprehensive recognition in our legal system. The
process of
protecting this type of house should start with the judiciary and the
legal practitioners involved in the process of
attachment of
residential properties. Ultimately it is for the legislature to
create the necessary protective framework, in terms
of which
indigenous property must be protected against the excesses of the
mercantilist world, in the same way that the law protects
entrusted
property.
[45]
As a result I made the following order:
1.
The matter is postponed
sine die
;
2. The matter may not be set down within a
period of four weeks to enable the Respondent to seek legal advice;
3.
No order is made as to costs.
Counsel
for Applicants: Adv J Minnaar
Attorneys for
Applicant: Hammond Pole Majola Inc, Johannesburg; Oltmans Attorneys,
Pretoria
Respondent: In
person
[1]
These judgments aligned the implementation of
the default judgment rules as well as the practice relating to
execution against
immovable property with the judgments of the
Constitutional Court in
Jaftha v
Schoeman and Others; Van Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005 (2) SA 140
(CC)
2005 (1) BCLR 78
and
Gundwana v Steko Development CC
and Others
2011 (3) SA 608
[2]
In cases not involving a primary residence, the
rule notionally allows for automatic attachment against immovable
property after
attachment against movables has been insufficient.
However, only the court can make the decision as to whether an
immovable property
used as a residence is the primary residence or
not, as the registrar must refer all cases involving “residential
property”
to the court in terms of the proviso to
rule 31(5).
It appears that the practice is that execution against movables and
immovables are always separated and judicial supervision
is retained
at both judgment and execution stages. The “or”
separating
rule 46(1)(a)(i)
and
rule 46(1)(a)(ii)
seems to have
become an “and”, and the broader category of
“residential property” thus effectively receives
the
same procedural protection as “primary residences” do..
[3]
Regulations Governing the Control and
Supervision of an Urban Bantu Residential Area and Related Matters,
Proclamation 1036, published
in Regulation Gazette 976 of 14 June
1968. Through a range of statutory measures, the permit system and
its permissions to occupy
were ultimately transformed into freehold,
principally the Conversion of Certain Rights to Leasehold Act 81 of
1988 and the Upgrading
of Land Tenure Rights Act 112 of 1991. Once
registrable as freehold, many of these erven were transferred to
identified occupants
via state subsidised housing schemes such as
the Enhanced Extended Discount Benefit Scheme provided for in the
Housing Code published
in terms of
section 4
of the
Housing Act 107
of 1997
.. See also
Privatisation of
State Housing With Special Focus on the Greater Soweto Area; Erica
Emdon; Urban Forum, June 1993, Volume 4, Issue
2, pp 1-13
.
[4]
This section requires that a property which was
obtained with state assistance first be offered to the state for
purchase.
[5]
See:
Customary Law
in South Africa;
TW Bennett, 1
st
ed, 2015 reprint, Juta & Co at Chapter 7, pp 178 to 186, and
Chapter 8, pp 263 to 265. The
family
home
in customary law is something far
more than just property. See also Chapter 9 of this textbook dealing
with the
Consequences of Marriage.
[6]
Khwashaba and another v Ratshitanga and
others
(27632/14)
[2016] ZAGPJHC 70 (29 February 2016
);
Sebatana v Mangena and Others
(08560/13) [2013] ZAGPJHC 246 (6 August 2013);
Booysen
v Matjie and Others
(21283-12) [2013]
ZAGPJHC 91 (27 March 2013);
Leballo v
Masungany and Others
(40882/2012)
[2014] ZAGPPHC 91 (19 February 2014)
[7]
[2012] ZASCA 135
;
[2012] 4 All SA 239
(SCA) (27
September 2012)
[8]
Where the credit relationship is extraneous to
the family relations. To what extent, and in what manner, the family
can encumber
such a property, is not at issue here.
[9]
Land information as a tool for effective land
administration and development
, in
Pluralism and Development: Studies in
Access to Property in Africa;
Mostert
and Bennett, 2011, Juta & Co, p238
[10]
At paras
and 162 to
183, 190, 228, 229 and 232
[11]
The primary legislation in this regard is the
Conversion of Certain Rights to Leasehold Act 81 of 1988 and The
Upgrading of Land
Tenure Rights 112 of 1991.
[12]
A
t paragraphs 17,18
and 96 (per Langa DCJ)
[13]
[2000] ZACC 2
;
2000 (4) BCLR 347
;
2001 (1) SA 500
(2 March 2000) at paras 41 to 51. See also
Shelfplett
47 (Pty) Ltd v MEC for Environmental Affairs and Development
2012(3)
SA 441 (WCC) at para 36.
[14]
Chapter 2.2 (
Black
Land Tenure and Urbanisation
) in the
2011 PhD dissertation (Stellenbosch) entitled
The
Impact of Section 26 of the Constitution on the Eviction of
Squatters in South African Law.
[15]
Since which date ownership was also available in
“White South Africa” in terms of the inserted chapter
VIA of the
Black Communities Development Act 4 of 1984 (by way of
Act 74 of 1986).
[16]
It should be noted that other jurisdictions that
afford special protection to certain classes of homes, often refer
to such homes
as “family homes”, whereas our courts have
come to use the term “primary residence”. The term
“family
home” has, however, entered our academic
language. See:
The Pro-Creditor
Approach in South African Insolvency Law and the Possible Impact of
the Constitution
,
Boraine,
Evans, Roestoff and Steyn in (2015) 3 NIBLeJ 5 at paras 68 and 83.
As is apparent from this judgment, I use the term
“family
home” as the term was used in the
Bhe
matter (
supra),
as a form of indigenous customary law
property that comes loaded with personal family relationships and
social conventions. See
also:
Treatment
of a Debtor's Home in Insolvency: Comparative Perspectives and
Potential Developments in South Africa,
L
Steyn,
International Insolvency Review
22(3) · December 2013. See also:
Re
Holliday (a bankrupt), ex parte the trustee of the bankrupt v The
bankrupt and another
[1980] 3 All
ER 385
for the position in the UK.