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[2016] ZAGPPHC 1046
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Changing Tides 17 (Pty) Ltd N.O. v Portion of Erf 366 Wapadrand CC and Others (24135/2010) [2016] ZAGPPHC 1046 (15 December 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
15/12/16
Case
Number: 24135/2010
Reportable:
No
Of
interest to other judges: No
Revised.
Changing
Tides 17 (Pty) Ltd
N.O. Applicant
AND
Portion
3 Erf 366 Wapadrand
CC First
Respondent
(Registration
Number: CK 2002/062477/23)
Edward
George
Scott Second
Respondent
Frederick
Albert
Muller Third
Respondent
Louise
Jennifer
Muller Fourth
Respondent
Maryn
van Staden
N.O. Fifth
Respondent
In
his Capacity of judicial manager of T.T Gushman & Son (Pty) Ltd
Espe
Izak
Steyl Sixth
Respondent
City
of Tshwane Metropolitan
Municipality Seventh
Respondent
The
Registrar of Deeds,
Pretoria Eight
Respondent
JUDGMENT
MOLEFE
J
[1]
The Applicant seeks from the First Respondent a clearance certificate
pertaining to a property described as Portion 1 of Erf
336 Wapadrand
Extension 4 Registration Division J.R., Gauteng Province held by
Title Deed T 10784/2004, failing which the Registrar
of Deeds is
ordered to affect transfer of the property into the name of the Sixth
Respondent.
Factual
Background
[2]
Erf 366 Wapadrand was originally owned by the Second Respondent who
sub-divided the property into:
2.1. Portion 1 -
currently owned and registered in the names of the Third and Fourth
Respondents;
2.2. Portion 2 - owned by
T T Gushman & Sons (Pty) Ltd represented by the Fifth Respondent
as judicial manager;
2.3. Portion 3 -
representing the access road and certain communal attributes, owned
and registered in the name of the First and
Second Respondents;
2.4. The remaining extent
- currently owned and registered in the name of the Second
Respondent.
[3]
The Seventh Respondent imposed a condition that Portion 3 had to be
vested in a close corporation, and the owners of the remaining
extent, portion 1 and portion 2 to be members of the Close
Corporation (similar to the concept of a homeowners association). The
owners would be liable to contribute a third of the common
expenditure which include bulk water derived from Portion 3, security
features, rates and taxes and maintenance. A title condition was
imposed in the title deeds of all the properties with a view to
facilitate and to administer the communal portion 3. The aforesaid
condition is a so-called restrictive title deed condition which
was
registered in the office of the Eighth Respondent. It is alleged that
since the subdivision, the Second Respondent financed
all the
expenditures of the First Respondent up to 2010. Therefore, the
Second Respondent is owed by the First Respondent on loan
account
whilst First Respondent has a claim against the Third and Fourth
Respondents.
[4]
The Third and Fourth Respondents caused several indemnity bonds to be
registered over portion 1 ("the property") in
favour of the
Applicant as security for monies lent and advanced. As a result of
the Third and Fourth Respondents defaulting on
their payment
obligations towards the Applicant, the Applicant obtained judgment
against the Third and Fourth Respondents and the
property being
judicially attached.
[5]
Subsequent to the attachment of the property, Applicant sold the
property in execution on 23 April 2014 in realization of its
security. The property was sold to the Sixth Respondent in an amount
of R1 710 000, 00 (One Million Seven Hundred and Ten Thousand
Rand).
[6]
The Seventh Respondent issued a rates clearance certificate in terms
of Section 118 (1) of the Local Government Municipality
Act, Act 32
of 2000, indicating that no further amounts were due in terms
of the property after the outstanding balance of
R23 621, 30 was paid
by the Applicant.
[7]
On 23 June 2014, the Applicant received correspondence from R Lippi,
attorneys acting on behalf of the First Respondent that
an amount of
R277 575, 73 is owed to the First Respondent as Homeowners
Association, duly represented by the Second Respondent.
The Applicant
requested a breakdown of the amount of R277 575, 73 on 1 July 2014,
in order to present it to the Sixth Respondent
for consideration.
[8]
On 11 September 2014, the requested breakdown which contained the
following information was provided to the Applicant:
8.1 The Second Respondent
subsidized the contributions towards the First Respondent due to it
by the Third and Fourth Respondents
until October 2010, after which
he elected not to further subsidise the contributions of portions 1
and 2 and independent services
were installed on each respective
property.
8.2 The Second Respondent
claimed an amount of R319 562, 22 up to October 2010 was due and
payable to the Second Respondent. A further
amount of R115 555, 50
which constituted the Third and Fourth Respondents' contribution
towards water consumption and R51 482,
00 for electricity use was due
to the Seventh Respondent, which allegedly was erroneously billed to
the Second Respondent.
[9]
On 12 February 2015, R Lippi attorneys directed a letter to the
Applicant's bond foreclosure attorneys wherein the Applicant's
vested
interest as bondholder was emphasized and in an attempt to safeguard
the Applicant's interest, it had to be made aware of
the issues
pertaining to the outstanding levies, municipal billings and certain
security aspects.
[10]
On 12 March 2015, the Applicant's attorneys of record were presented
with an updated statement reflecting the amount owed in
the sum of
R524 614, 63 of which R205 052, 41 constitutes interest charged.
Applicant's counsel Advocate P I Oosthuizen submitted
that
notwithstanding a formal demand of all the accounts and all
documentation in relation to the amount claimed for inspection
and
debate, no response was received from the Second Respondent.
[11]
Counsel for the First and Second Respondents ("the
Respondents"), Advocate J Eastes contends that
in view of
the fact that the Second Respondent subsidized all the expenditures,
Second Respondent is owed by the First Respondent
on loan account,
while the First Respondent has substantial claims against the
remaining owners being the Third and Fourth Respondents.
It was
argued that the Second Respondent cannot therefore issue a consent
form for transfer and change of ownership whilst there
are still
amounts owing. It is submitted on behalf of the Second Respondent
that this application is an attempt to circumvent the
restrictive
title condition which is registered. against the title deeds of the
properties.
No
Locus Standi
[12]
The Respondents raised a point
in limine
that the Applicant
lacks the necessary and required
locus standi
to institute the
application as the Applicant is merely a creditor that obtained
judgment against the Third and Fourth Respondents.
It was argued that
when the Sheriff sells immovable property in terms of Rule 46 of the
Uniform Rules of Court, he does not act
as an agent of the judgment
creditor or judgment debtor but does so as an executive of the law.
He becomes a party to the contract
suo nomine
and he is bound
to perform his obligation thereunder. In this regard Respondents'
counsel relied on
Sedibe and Another v United Building Society &
Another
1993
(3)
SA 671
(T) at 676 D
where a full bench
held
"the obligation created in casu by Clause
5,
by
which vacua possession was guaranteed, was that of the sheriff. He
had to make good his undertaking and he was answerable ex
contractu
if he failed to ensure that the appellant obtained undisturbed
possession".
[13]
Respondents' counsel contends that the Conditions of Sale in
execution of the property indicates that the Sixth Respondent
as
purchaser is liable to pay rates and taxes and charges due to the
First Respondent and not the Applicant. If the Sixth Respondent
is
not in a position to pay same, the correct procedure would be for the
Sheriff to cancel the sale in terms of Rule 46 of the
Uniform Rules
of Court. It was argued that there is therefore no
nexus
for
the Applicant to seek the relief it seeks in this application as the
Applicant lacks the necessary
locus standi
to institute the
application.
[14]
As a general rule the requirements for
locus standi
are as
follows:
14.1. The applicant for
relief must have an adequate interest in the subject matter of the
litigation, which is not a technical
concept, but is usually
described as a direct interest in the relief sought;
14.2. The interest must
not be too far removed;
14.3. The interest must
be actual, not abstract or academic;
14.4.
.
The interest must
be current interest and not a hypothetical one
[1]
[15]
I have noted that this application is brought under the very same
case number, under which the judgment was obtained, a warrant
of
attachment was issued and the subsequent sale in execution.
Applicant's counsel argued that the Respondents' objection is
unmeritorious
considering that the Respondents engaged the
Applicant's bond foreclosure attorneys during February 2015 wherein
the Applicant's
vested interest in the subject matter was
highlighted and that the Applicant should safeguard its interest by
urgently addressing
inter
alia
the
issue of the alleged outstanding levies
[2]
.
[16]
I am of the view that the point
in limine
is ill-conceived. I
am satisfied that the Applicant has an adequate vested interest in
the subject matter and the necessary
locus standi
to bring
this application and the point
in limine
fails and is
dismissed.
[17]
It is the Applicant's contention that it is evident and not disputed
that no formal account system was conducted by the First
Respondent
nor were any financial statements kept.
[3]
No
meetings were held between the members nor did the Second
Respondent
open a separate bank account for the First Respondent. It was argued
on behalf of the Applicant that there are currently
no monies due and
owing to the First Respondent; the monies claimed are in actual fact
owed to the Second Respondent and the Second
Respondent uses the
First Respondent as a vehicle to claim same. I agree with this
argument; on the Second Respondent's own version,
he personally paid
for services and subsidized all the expenditures due to the Seventh
Respondent until about October 2010 when
he refused to pay all the
expenses on his own. Therefore, any monies claimed are owed to the
Second Respondent and not to the First
Respondent.
[18]
The defences raised by the Respondents against the Applicant is
firstly that the amount claimed by the Respondents is not disputed
and secondly that the claim is not susceptible to prescription. The
Applicant was informed on 23 June 2014 that an amount of R277
575, 73
is due to the First Respondent and Applicant's attorneys of record
responded as follows
[4]
;
"Kindly note that
as
we are in possession of
a
valid rates clearance
certificate, we will proceed with lodgment once we have your
homeowners association consent".
Respondent's
counsel contends that on a proper interpretation of the
abovementioned response that neither the Applicant nor Applicant's
attorneys of record failed to lay a sufficient basis to dispute the
correctness of the amount. Furthermore, it was argued on behalf
of
the Respondents that the Applicant was informed that the clearance
figures issued by the City of Tshwane are incorrect and a
breakdown
indicating how the outstanding amount was calculated, was forwarded
to the Applicant as requested. However, Applicant
failed to make
payment despite the aforesaid.
[19]
It is evident from Annexure "NS13" that the Applicant's
conveyancing attorneys requested a breakdown of the amount
of R244
757, 73, specifically how the amount was calculated and that the
breakdown would be submitted to the Sixth Respondent ("purchaser")
for consideration. In my view, it is an incorrect interpretation to
conclude on the basis of Annexure "NS 13" that the
amount
claimed was not disputed and that no issue was taken with the amount
owed.
[20]
It is common cause that the Respondents are not in possession of the
relevant documentation to support the calculation of the
amount
claimed. If regard is had to the contents of Annexure
"NS16"
[5]
the
following is placed on record by the Respondents' then attorneys of
record:
"Our client has
available for inspection the relevant source documents.
. .
The
documents are approximately 400 in number and are at present with our
clients' accountant. Copies could be made available.
. . "
The
Respondents' attorneys then later informed the Applicant that the
First Respondent's bookkeeper Charlene Enslin, had all the
substantiating documentation in relation to the amounts as set out in
the breakdown. It was then submitted by Respondents' counsel
that
based on the aforementioned, the Applicant is well aware of the
amount due, owing and payable and also the calculation thereof
and
does not have a right to subject the Respondents to a forensic audit.
I do not agree with this submission and in my view, this
defence does
not make sense and is untenable as the breakdown is not a
substantiated by any documentation.
Prescription
[21]
Applicant's Counsel submitted that the debt owing to the Respondents
by the Third and Fourth Respondents was with effect from
October 201O
and is now prescribed. The issue to be determined is whether the
claim is susceptible to prescription or not. Applicant's
Counsel
submitted that levies or penalties due to the First Respondent do not
enjoy any special legal protection as far as the
running of
prescription is concerned. It was further submitted that the
restrictive title deed condition conflates two distinct
rights.
21.1. The First
Respondent's claim for payment of the amounts due to it by the Third
and Fourth Respondents which is a personal
contractual right; and
21.2.
The First
Respondent's right to
veto
in
terms of the restrictive title deed condition which restrict the
Third and Fourth's Respondent's
ius
disponendi
i.e. a real right
[6]
.
[22]
It cannot be argued that the indebtedness
in
casu
is
a continuing wrong as no further charges were levied against the
property after October 2010. The Court in Slomowitz v Vereeniging
Town Council
[7]
accepted the
description of a continuous
wrong
as one which is still in the course of being committed and is not
wholly past. This is not the case in the indebtedness
in casu.
I
agree with the submission by the Applicant's Counsel that the
position of the First Respondent is akin to that of the embargoes
contained in the
Local
Government: Municipal Systems Act 32 of 2000
[8]
and of
the
Sectional
Titles Act
95
of
1986
[9]
.
These
provisions respectively, prohibit the Registrar from registering the
transfer of immovable property, except on production
of a certificate
issued by the municipality or a conveyancer confirming that all
moneys due to the municipality or a body corporate
have been fully
paid.
That
being the case, even charges levied under the Municipal Systems Act
are susceptible to prescription. (See City of Johannesburg
v Kaplan
and Another
2006 (5) SA 10
(SCA) par 25.
[23]
I fully agree with the submissions made by the Respondents' Counsel
that in the
Willow Waters Homeowners Association supra,
the
Supreme Court of Appeal confirmed that a restrictive title deed
condition is in fact a real right and not a personal right.
However,
I disagree with the contention that the Applicant in this application
is attempting to circumvent the restrictive title
deed conditions.
This
application is based on the debt which stems from a restrictive title
deed condition which has the same effect as a servitude
which only
prescribes after 30 years. In addition it is a continuing wrong which
also prevents prescription. The debt claimed which
arose from the
restrictive title deed however is susceptible to prescription. The
fact however, that the Second Respondent has
a loan account in the
First Respondent does not warrant the First Respondent to withhold
the clearance certificate if the rates
and taxes are fully paid up.
The debt owed to the First Respondent is a normal debt subject to a
three year prescription period.
I am not satisfied that the grounds
listed by the Respondents in this matter disclose any defence against
the relief sought.
[24]
In the premises, the following order is made:
1.
The
First Respondent acting through it sole and managing member the
Second Respondent, is ordered to provide the Applicant with
a
clearance certificate pertaining to the property described as
Portion 1 Erf 336 Wapadrand Extension 4 Registration Division J.R.
Gauteng Province held by Title Deed T1078412004 within 10 days of
this order being granted.
2.
In
the event of the First and/or Second Respondents failing to comply
with prayer 1, the Eighth Respondent is authorized and ordered
to
effect transfer of the property absent the clearance certificate
envisaged in condition D of the Title Deed pertaining to the
property
described as PORTION 1 OF ERF 366 WAPADRAND EXTENSTION 4 REGISTRATION
DIVISION J.R., GAUTENG PROVINCE HELD BY TITLE DEED
T1078412004 into
the name of the Sixth Respondent.
3.
Costs
of this application to be paid by the Second Respondent.
________________
D
S MOLEFE
JUDGE OF THE HIGH
COURT
APPEARANCES:
Counsel
on behalf of Applicant
: Adv. Pl
Oosthuizen
Instructed
by
: Vilele
Tinto & Associates
Counsel
on behalf of 1st & 2"d Respondents
:
Adv. J
Eastes
Instructed
by
: M E
Eybers Attorneys
Date
Heard
: 22
November 2016
Date
Delivered
: 15
December 2016
[1]
See Public Protector v Mail & Guardian Ltd
2011 (4) SA 420
(SCA)
at 427F - 428 A
[2]
Founding Statement Annexure "NS15" page 78
[3]
Founding Affidavit page 33 par 37
[4]
Founding Affidavit, Annexure NS13, pages 73-74
[5]
Record p 85
[6]
Willow Waters Homeowners Association (Pty) Ltd v Koka N.O. and
Others 2015 (5) SA 304 (SCA)
[7]
1966 (3) SA 317 (A)
[8]
Section 118
[9]
Section 15 B (3) (9) (i) (aa)