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[2013] ZAGPPHC 167
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Koka NO and Others v Willow Waters Home Owners Association (Pty) Ltd and Others (20361/12) [2013] ZAGPPHC 167 (13 June 2013)
NOT
REPORTABLE
IN THE HIGH COURT OF THE REPUBLIC OF
SOUTH
AFRICA NORTH GAUTENG, PRETORIA
Case
Number 20361/12
DATE:
13/06/2013
In
the application between
JERRY
SEKETE KOKA
N.O.
............................................................................
First
Applicant
CATHERINA
ELIZABETH OOSTHUIZEN
N.O.
..........................................
Second
Applicant
TANIA
OOSTHUIZEN
N.O.
…...........................................................................
Third
Applicant
and
WILLOW
WATERS HOME OWNERS ASSOCIATION (PTY) LTD
.............
First
Respondent
THE
REGISTRAR OF THE DEEDS OFFICE, PRETORIA
...................
Second
Respondent
FIRSTRAND
BANK
LIMITED
........................................................................
Third Respondent
ASSOCIATION
OF RESIDENTIAL COMMUNITIES CC
….....................
First
Amicus Curiae
NATIONAL
ASSOCIATION OF MANAGING AGENTS
.........................
Second
Amicus Curiae
JUDGMENT
BAM
AJ
1.
The applicants are the joint trustees in the insolvent estate of C P
and L van der Walt. One of the assets of the estate is an
immovable
property, a partly erected dwelling, situated at Van Riebeeckpark
Extention 26 Township, Registration Division IR, Province
of Gauteng,
a residential township established in terms of the Articles of the
first respondent, a Homeowners Association, incorporated
in terms of
the provisions of section 21 of the Companies Act, No 61 of 1973. The
third respondent is the entity holding a mortgage
bond over the
property. The amici curiae, interested parties, were granted leave to
intervene. The parties are represented as follows:
Mr Terblanche SC
with Mr Meintjes for the applicants; Mr de Koning SC with Mr Cowley
for the first respondent; and Mr Budlender
with Mr Ferreira for the
amici.
2.
In terms of a written agreement between the insolvents and the first
respondent, the insolvents, subject to certain conditions,
became
members of the first respondent. The property was duly registered in
the names of the insolvents,
3.
The Deed of Transfer incorporated the following conditions:
Condition
5B:
“
(i)
Every owner of the erf, or any subdivision thereof or any person who
has an interest therein shali become and shaii remain a
Member of the
Home Owners Association and be subject to its constitution until
he/she ceases to be the an owner as aforesaid. Neither
the erf nor
any subdivision thereof nor any interest therein shall be transferred
to any person who has not bound himself/herself
to the satisfaction
of such Association to become a member of the Home Owners
Association.
(ii)
The owner of the erf or any subdivision thereof, or any person who
has an interest therein, shall not be entitled to transfer
the erf or
any subdivision thereof or any interest therein without a clearance
certificate from the Home Owners Association that
the provisions of
the Articles of Association have been complied with."
4.
It is undisputed that the insolvents, before their sequestration,
owed the amount of R426 319 83, for outstanding levies and
penalties,
in terms of the provisions of the aforementioned contract, to the
first respondent, and that the said amount was, and
still is, due and
payable. The property was subsequently, after sequestration, valued
for forced sale purposes at R700 000 00.
5.
The amount due is described, in terms of the said contract, as a
"debt". Pertaining to the effect of a Member failing
to pay
a "debt", the relevant clause of the "ARTICLES OF A
COMPANY" of the first respondent, provide as follows:
Clause
46:
"No
Member shall transfer his Unit until the Board of Trustees under the
hand of one of its members has certified that the
Member has at date
of transfer fulfilled all his financial obligations to the
Association. Such consent shall not be withheld unless:-
46.1
Such member is indebted to the Association in any way in respect of
levies or other amounts which the Association may in terms
of these
presents be entitled to claim from him;
46.2
The proposed transferee has agreed to become a Member of the
Association;
46.3
Such Member remains in breach of any of the provisions of these
presents or any rules after notice from the Trustees requiring
him to
remedy such breach
6.
The two points in limine raised on behalf the first respondent in its
heads of argument were abandoned and require no further
attention.
7.
On the merits of the matter, based on the aforementioned conditions,
it was first respondent's main contention that the transfer
of the
property in the name of any new owner cannot be effected without the
consent of the first respondent. The first respondent
informed the
applicants that the conditions of sale of the property had to include
that the new owner must accept and sign the
Body Corporate Rules, It
further demanded payment of all outstanding levies and penalties
before it would have been prepared to
consent to the transfer of the
property. In this regard the first respondent relied on, what it is
contended to be, a real right
registered in terms of the bond
conditions.
8.
It was contended by the first respondent that the levies and
penalties are "akin to tax'', as provided for in section 89
of
the Insolvency Act, Act 24 of 1936 (the "Act"), and
therefore that the first respondent is preferently entitled to
payment of the outstanding amount, before first respondent would be
obliged to consent to the transfer of the property after the
sale in
execution.
9.
This approach by the first respondent prompted the applicants to
lodge this application for a declaratory order with the following
contents:
1.
The claim by the first respondent in respect of outstanding levies
and penalties against the insolvent estate does not constitute
a
claim in terms of section 89 of the Insolvency Act, Act 24 of 1936.
2.
That the second respondent may effect transfer of the immovable
property in question, held by a mortgage deed, without any consent
of
the first respondent
10.
The first respondent opposed the application. The amici curiae
supports the first respondent. The third respondent withdrew
its
notice to oppose.
11.
During argument, Mr Terblanche moved that the order sought by the
applicants, as submitted in the applicants' supplementary
heads of
argument, be amended as follows:
1.
That a declarator issue in the following terms:
Title
condition 5B(ii) in Title Deed 06/99802 in favour of Willow Water
Homeowners Association, No 96/99802 (an association incorporated
in
terms of Section 21 of the Companies Act, No 61 of 1973, as amended),
constitutes a personal right.
2.
The Second Respondent may effect transfer of the immovable property
from the insolvent estate of Christiaan Petrus van der Walt
(Master's
Ref No. T1229/2009 and Lorette van der Walt (Master's Ref No
T1228/0090 and more fully described as Portion 7 of Erf
2461, Van
Riebeeckpark Extention 26 Township, Registration Division IR,
Province of Gauteng, held by Deed of Transfer T99802/2006,
wthout any
consent and/or certificate as envisaged in Title Condition 5B(ii) of
the First Respondent
3.
The First Respondent and First and Second amici curiae pay the costs
of this application, jointly and severally, the one to pay
the other
to be absolved - which costs shall include the costs occasioned by
the employment of two counsel (including senior counsel.)
12.
It need to be recorded that in regards to the proposed amendment of
the order, Mr de Koning, in reply, objected on the basis
that the
proposed amendment is not substantiated by the applicants in their
founding affidavit. Apparently the main concern of
the amici curiae
was the costs order sought against them. Mr de Koning further pointed
out that the applicants, for the first time
in their replying
affidavit, contended that the contract between the insolvents and the
first respondent was an "executory"
contract and that the
applicants became entitled to an election to abide the agreement or
not. In this regard Mr de Koning submitted
that the applicants were
bound by the contract and that they were obliged, in terms of the
contract to tender complete performance
of all the obligations of the
insolvents. In this regard Mr de Koning relied on Cohen NO v
Verwoerdburg Town Council 1983(1) 334
(AD) at 352 B-C.
13.
The real problem in this matter turns upon the question whether the
applicants should be permitted to transfer the property
in question
without the consent of the first respondent, and thus, without the
required clearance certificate issued in terms of
Title Condition
5(B)(ii). It involves the issue whether the right first respondent
claimed to have is a real right or a personal
right.
14.
The first respondent clearly indicated that the consent to transfer
the property would not be granted if the outstanding levies
and
penalties had not been paid. The issues in regards to the relief
sought were, in my view, properly addressed and ventilated
in the
papers and the arguments of counsel. At no stage could there have
been any misunderstanding what the relief sought entailed.
The
amended relief sought by the applicants is, in my view, nothing more
than a refined consolidation of a practical solution to
the problem.
See Trinity Asset Management (Pty) Ltd & Others v Investec Bank
Ltd and Others 2009(4) SA 89 5G4.
15.
The first respondent's contention is that the applicants, failed to
satisfy the requirements for a declaratory order. Both the
applicants
and the first respondent relied on the Trinity Asset Management case,
supra in this regard. In the said case the provisions
of section
19(l)(a)(iii) of the Supreme Court Act, No 59 of 1959, were
discussed, and at 106, par [62], the requirements for a
declaratory
order, quoted as follows, were approved:
"(T)he
two stage approach under the subsection consists of the following.
During the first leg of the enquiry the Court must
be satisfied that
the applicant has an interest in an "existing, future or
contingent right or obligation". At this stage
the focus is only
upon establishing that the necessary conditions precedent for the
exercise of the Court's discretion exist If
the Court is satisfied
that the existence of such conditions has been proved, it has to
exercise this discretion by deciding either
to refuse or grant the
order sought. The consideration of whether or not to grant the order
constitutes the second leg of the enquiry."
My
eventual conclusion will reflect my views in this respect.
16.
in order to determine whether the rights the first respondent derived
from the contract in question is personal or a real right,
it appears
that, for a real right, as stated in Cape Explosive Works Ltd v Denel
(Pty)Ltd 2001(3) SA 569 (SCA) at 578 D-E, par
[12], two requirements
have to be complied with;
"In
terms of s 3 of the Deeds Registries Act oil real rights in respect
of immovable property are registrable. To determine
whether a
particular right or condition in respect of land is real, two
requirements must be satisfied:
(1)
the intention of the person who creates the real right must be to
bind not only the present owner of land, but also his successors
in
title; and
(2)
the nature of the right or condition must be such that the
registration of it results in a 'subtraction of dominium' of the
land
against which it is registered."
17.
Regarding the first requisite, with reference to what is stated in
Clause 46 of the "Articles", it was conceded by
the
applicants that those conditions also bind any subsequent purchaser
to become a member of the association and that he/she should
comply
with the conditions of the association from the time he/she becomes a
member.
In
respect of the outstanding levies and other related debts, however,
it was submitted that the association could never have intended
that
any subsequent purchaser should be held liable for any outstanding
levies and penalties and that that condition only binds
the present
owner and not any subsequent owner. This condition therefore
constituted nothing more than a personal right against
the
insolvents, and the applicants, in this matter.
18.
Regarding the second requisite Mr Terblanche referred to what was
stated by Professor vd Walt (THRHR 92(55) supra, page 180:
"The
test boils down to the question whether a certain right or obligation
amounts to a diminution of the ownership of land.
If it does, the
right in question is a real right, but if it merely affects the owner
in his personal capacity without diminishing
the ownership as such
the right is personal."
It
follows, so it was submitted by Mr Terblanche, that if the condition
that the outstanding levies and penalties had to be paid
by a present
owner, and not any subsequent owner, there can be no "subtraction
of dominium" of the property and that
such a condition creates
nothing more than an obligation that the insolvents, and therefore
the applicants, should pay the outstanding
amount. The payment of the
levies and other related amounts, argued Mr Terblanche, related to
the member in his capacity as member
and the reference to "financial
obligations" cannot be construed to mean anything more than
personal obligations. It
was further submitted that the title
conditions in question, therefore, did not at all relate to the
enjoyment of the land.
19.
In this respect the applicants referred to the following cases:
Lorentz v Melle and Others 1978(3) SA 1044 (T); Bowring NO v
Vrededorp Properties CC and Another 2007 (5) 391 SCA par [10] and
National Stadium South Africa (Pty) Ltd and Others v Firstrand
Bank
Ltd 2011(2) SA 157 SCA.
20.
Mr Terblanche emphatically relied on the case of Lorentz v Melle,
supra, a decision of the full bench of this division, where
the Court
ruled that the fact that a profits clause contained in the contract
between the parties pertaining to sharing of profits,
after sale of
certain property, was a personal right and did not confer any real
right, even after registration thereof. That right
did not restrict
the rights of ownership and/or enjoyment of property in a physical
sense. The fact that the profits clause referred
to in that case was
registered, was found not to have resulted in an encumbrance
(subtraction of dominium) of the land.
The
Court stated as follows at 1055E-F:
"In
the result I am of the opinion that that part of the notarial deed
under consideration, namely the township clause, confers
only
personal rights, which even on (their incorrect) registration, were
not capable of becoming and did not become a praedial
servitude."
And
at 1059G:
"
I have already rejected the contention that the registration of the
deeds resulted in the township clause becoming a real
encumbrance
against the land."
21.
It is the first respondent's argument that the right in question
vested in it in terms of the aforementioned Title Condition
5(B)(ii),
and that that right diminished the rights of ownership of the
insolvents to the extent that the insolvents were not entitled
to
transfer the property without a clearance certificate issued by the
first respondent. This right, it was contended, is indeed
a real
right directly related to the property. It was further submitted by
the first respondent that the applicants did not acquire
any better
rights than what the insolvents originally had and that the
applicants were bound by the said terms. It was also contended
by the
first respondent that the said right is in any event a real right
entrenched in Section 25(1) of the Constitution.
22.
The contention on behalf of the first respondent that the right in
question embodied a real right was based on the discussion
of
personal and real rights in The Law of South Africa, 1st re-issue,
Vol 27 paragraphs 234 - 240. it was further argued by Mr
de Koning
that the "factual matrix (or context) against which the
condition found its way into the title deed and "Giving
a
commercially sensible meaning to the title conditions concerned"
should be heeded in deciding the question. In the latter
instance Mr
de Koning referred to Ekurhuleni Metropolitan Municipality v
Germiston Municipal Retirement Fund 2010 (2) 498 SCA par
[13] where
the following appears: "The principle that a provision in a
contract must be interpreted not only in context of
the contract as a
whole; but also to give it a commercially sensible meaning, is now
clear.
23.
The question in this matter whether the conditions in the Title Deed,
Condition 5(B), constitute a real right, which goes to
the heart of
the problem, is not easy to answer. This is where the parties are at
odds. It is common cause that her are no numerous
clauses of real
rights in our law. This Court was also referred to, inter alia,
following decisions which specifically dealt with
the issue.
In
the Cape Explosive case supra, the Supreme Court of Appeal dealt with
a matter where the restrictions in question in that case
were
directly related to the use of property. The Court found that the
rights in that case were real rights.
In
the National Stadium case supra it was found that the right in the
title condition to name a certain soccer stadium constituted
a real
right.
In
the Cohen NO v Verwoerdburg case supra; at 346 D-G, the Court
referred with approval to earlier decisions, and stated the
following:
"it
is relevant in this regard to point out that it has been held that a
municipality claiming road rates which were due in
terms of a statute
did not, in the absence of any provision in that respect, enjoy any
preference and ranked as a concurrent creditor
in the insolvent
estate of the owner."
24.
Regarding the nature of contractual rights , whether the right is
real or personal, Professor AJ van der Walt, professor of
Private
Law, University of South Africa (as he then was), in an article on
Personal and Limited Real Rights, published in THRHR
1992(55),referred to by Mr Terblanche, stated the following
pertaining to the question whether a right is personal or real (Page
179):
"In
this context the investigation usually entails three main questions,
namely whether the right was intended to be real;
whether the
contract actually constitutes a right that is essentially real; and
whether public policy allows for such a real right
to be created.
In
the rest of this article it is indicated that these three questions
constitute a recurring theme; which might be regarded as
the core of
the theme. It is also suggested that this theme should be judged with
specific reference to the essential distinction
between contractual
obligations that create limited real rights in land when properly
constituted, and contractual obligations
which create essentially
personal rights that merely resemble such limited real rights."
25.
The first respondent further contended that it should have similar
protection than bodies corporate as provided for in
section
15B(3)(a)(l)(aa)
of the
Sectional Titles Act, No. 95 of 1986
. This
section reads as follows:
"The
Registrar shall not register a transfer of a unit or of any undivided
share therein, unless there is produced to him—
(a)
a conveyancer's certificate confirming that as at date of
registration—
(i)(aa)
if a body corporate is deemed to be established in terms of
section
36(1)
, that body corporate has certified that II monies due to the
body corporate by the transferor in respect of the said unit have
been paid, or that provision has been made to the satisfaction of the
body corporate for the payment thereof;"
26.
It is of importance to note that in First Rand Bank Ltd v Body
Corporate of Geovy Villa 2004(3) SA 362 SCA, par[22], the Court
discussed the provisions of section 15B(3)(b) of the Sectional Titles
Act, No 95 of 1996, which provides for a similar protection
than what
the first respondent claims it should have, and remarked as follow:.
"If
the owner of a unit in a sectional title development is sequestrated
or liquidated the statute in effect creates as against
the insolvent
estate a preference in favour of a body corporate and that payment of
outstanding levies is treated as part of the
'cost of realisation'
envisaged by
s 89(1)
of the
Insolvency Act 24 of 1936
. The fact that
the debt to the body corporate is satisfied as part of the process of
realisation produces the same result as if
the rights conferred by an
embargo provision were preferent in the strict sense."
27.
It was however common cause that the first respondent, as Home Owners
Association, is not covered by the provisions of Sectional
Titles Act
in that the first respondent is not a body corporate. In this regard
it was submitted on behalf of the applicants that
the protection of
Bodies Corporate cannot be extended to cover home owners
associations. I agree with this submission. This Court
does not have
the power or jurisdiction to do so. Similar protection in law of home
owners associations falls squarely within the
domain of the
legislature.
28.
It was further common cause between the parties that if the
conditions regarding the consent by the first respondent to transfer
the property is a real right, the applicants stand to lose the
application and the first respondent will in law be entitled to
refuse to grant its consent until the outstanding debt had been paid.
It follows that the claim for payment of the levies and penalties
will then be elevated to a preferent claim, in the same category as,
for example, taxes, as contemplated by
Section 89
of the
Insolvency
Act.
>
29.
The first respondent also raised a constitutional point contending
that the relief sought by the applicants amounted to arbitrary
deprivation of property, guarded against by section 25 of the
Constitution, Act 108 of 1996. The section reads as follows:
"No
one may be deprived of property except in terms of law of general
application, and no law may permit arbitrary deprivation
of
property”.
30.
In this regard Mr Budlender, supporting the first respondent's
contentions, referred to the recent decision of National Credit
Regulator v Opperman and Others 3013 (2) SA 1 CC, in which case it
was confirmed that no law may permit arbitrary deprivation of
property.
24.
The first respondent's reliance on the provisions of section 25 of
the Constitution must however be considered against the backdrop
whether there will be an arbitrary deprivation where the provisions
of the
Insolvency Act are
applicable and mandatory. In terms of the
Insolvency Act the
applicants are obliged to administer the insolvent
estate, and, accordingly, to sell the property. The administration of
an insolvent
estate is governed by the
Insolvency Act, subject
only
to any applicable overriding provision of the Constitution, our
supreme law.
25.
I was referred to a another recent judgment under case no. 12/11377,
handed down by Mashile AJ, in the South Gauteng High Court,
in the
matter of Cowin NO & Others v Kayalami Estate Homeowners
Association & Others, which judgment confirms the submissions
made by the first respondent, and the amici curiae, in regards to the
issue whether the right in question is a real right. The
applicants
contended that the learned judge in that matter erred in arriving at
the conclusion favouring the first respondent's
submissions.
26.
In Cohen NO v Verwoerdburg Town Council; supra, the Court stated the
following:
(at
346 G-H)
"The
order of preference in
s 99
of the
Insolvency Act, includes
, as we
have seen, statutory obligations. Had it been intended to give
preference to clause (l)(3)type conditions
[(i)
to submit a detailed scheme to the Council for the construction of
storm water works and streets; and (ii) on approval of the
scheme by
the Council, to carry out the scheme at its own expense on behalf of
and to the satisfaction of the Council] this would
have been stated
there. Not all the amounts referred to
s 99
are amounts owing to the
State. For instance,
s 99(l)(f)
refers to amounts to a medical and
pension fund. Pneumoconiosis payments are also referred to in the
section. All these preferences
are obviously for the public benefit"
At
347 A-C.
"
What the Council is seeking is, in effect, to obtain a preference in
respect of an obligation which became due prior to the
winding-up
order. Its contentions are contrary to the well-established principle
that a winding-up order, like a sequestration,
order "crystalizes
the insolvent's position" and that "the hand of the law is
laid upon the estate, and at once
the rights of the general body of
creditors have to be taken into consideration" and that "the
claim of each creditor
must be dealt with as it existed at the issue
of the sequestration (or winding-up) order"
27.
The applicants contended that they are compelled, in terms of the
provisions of the
Insolvency Act, to
administer the insolvent estate.
This included the applicants' duties, so it was contended, of
realising all movable an immovable
property belonging to the estate.
The powers, duties and obligations of the applicants, in their
capacity as trustees, are provided
for in
Section 89
of the
Insolvency Act. The
relevant sub-sections read as follows:
Sub-section
(1):
"The
cost of maintaining, conserving, and realizing any property shall be
paid out of the proceeds of that property, if sufficient,
and if
insufficient and that property is subject to a special mortgage,
landlord's legal hypothec, pledge, or right of retention,
the
deficiency shall be paid by those creditors, pro rata, who have
proved their claims and who would have been entitled, in priority
to
other persons, to payment of their claims out of those proceeds if
they had been sufficient to cover the said cost and those
claims. The
trustee's remuneration in respect of any such property and a
proportionate share of the costs incurred by the trustee
in giving
security for his proper administration of the estate, calculated on
the proceeds of the sale of the property, a proportionate
share of
the Master's fees, and if the property is immovable, any tax as
defined in sub-section (5) which is or will become due
thereon in
respect of any period not exceeding two years immediately preceding
the date of the sequestration of the estate in question
and in
respect of the period from that date to the date of the transfer of
that property by the trustee of that estate, with any
interest or
penalty which may be due on the said tax in respect of any such
period, shall form part of the costs of realization."
Sub-section
(4):
"Notwithstanding
the provisions of any law which prohibits the transfer of any
immovable property unless any tax as defined
in sub-section (5) due
thereon has been paid, that law shall not debar the trustee of an
insolvent estate from transferring any
immovable property in that
estate for the purpose of liquidating the estate, if he has paid the
tax which may have been due on
that property in respect of the
periods mentioned in sub-section (1} and no preference shall be
accorded to any claim for such
a tax in respect of any other period."
Sub-section
(5):
"For
the purposes of sub-sections (1) and (4) "tax" in relation
to immovable property means any amount payable periodically
in
respect of that property to the State or for the benefit of a
provincial administration or to a body established by or under
the
authority of any law in discharge of a liability to make such
periodical payments, if that liability is an incident of the
ownership of that property."
28.
It is the applicant's contention that the effect of sequestration is
to establish a concursus creditorum. See Walker v Syfret
1911 AD 141
,
at 160. That is trite. Any preferent claim will need to be
substantiated in law, either by the provisions of the
Insolvency Act
or
the existence of real right in accordance with the Common Law.
29.
It was further contended by the applicants that a trustee is not
obliged to give effect to a registered contractual pre-emptive
right,
and for the liquidator to abide by the contract in question, would be
to elevate a pre-sequestration unsecured creditor
to a post
sequestration preferent creditor.
30.
It was also submitted on behalf of the first respondent that the
order sought by the applicants will result in an arbitrary
deprivation of the property, as alluded to above. The reasons for
this submission, referred by Mr Terblanche as sentimental reasons,
can be summarised as follows:
(i)
The purpose of the submission can be found in estate life. The order
will have the affect that the motivation and existence
of the
condition that a home owners association may control the affairs of
the estate be ignored;
(ii)
A restriction will be placed on the first respondent to have the
right to be paid, amongst others, levies. That will have
the effect
that trustees of Insolvent estates will be able to lay claim on
unencumbered property;
(iii)
The applicants did not state what the conditions of sale of the
property would be. It follows that any would be purchaser
would not
be subject to the conditions of the first respondent.
31.
The aforementioned reasons submitted on behalf of the first
respondent lose sight of the fact that granting of the order sought
will not affect or distract from the fact that the sale will remain
subject to the condition 5(B) of the contract, defining the
relationship, and thus the rights and obligations of the parties,
between the new purchaser and the first respondent. Anybody
purchasing the property will be personally subject to the conditions
in question and will have to abide by the rules of the first
respondent. The fact remains that the whole issue turns upon the
realization of the property and not the conditions regulating
possession or occupation thereof.
32.
With regard to Mr de Koning's submission that a commercially
sensible meaning should be given to the conditions, it appears
that I
would indeed be ‘'commercially sensible" to grant the
relief sought by the applicants, in that no other practical
solution
to the problem seems to be possible. The situation has developed into
a deadlock situation where the applicants are apparently
unable to
pay the first respondent before transfer of the property can be
effected. The present situation has the effect, to use
the wording in
Cohen NO v Verwoerdburg Town Council, supra, at 347 E-G, that it
will:
"delay
the winding up for an indefinite period";
"disturb
the process of winding up and the distribution of assets";
"distort
the order of preferences for which the law provides"; and
"Prejudice the concurrent creditors (and possibly
others."
33.
After having considered all the aspects an contentions alluded to
above, and the submissions of counsel, I have arrived at the
conclusion that the right in question is indeed a personal right in
that it does nor subtract from the dominium of the property.
The said
rights are personal rights binding the present owner of the property,
and therefore the applicants. The first respondent's
right to refuse
to give its consent to the transfer of the property was not elevated
to a real right, even upon registration. In
this regard this Court is
in any event bound by the full bench of this divisions' decision in
Lorentz v Melle, supra, in which
matter a similar problem was
discussed and ruled upon. For these reasons I am also unable to agree
with the result in the Cowin
v Kayaiami case supra.
34.
As stated above the first respondent's reliance on the provisions of
Section 25 of the Constitution is, in my view subject to
the
mandatory provisions of the
Insolvency Act. There
is no provision in
any other act, including the Constitution, regulating the
administration of estates. The argument that the first
respondent
will be arbitrarily deprived of the property is therefore without
substance.
35.
Regarding the question whether the applicants are entitled to a
declaratory order as prayed for, I am of the opinion that the
applicants have indeed established that they have the right to
realize the property and to transfer it, without the consent of
the
first respondent, to any prospective purchaser. The applicants have,
in my view, complied with the requisites stated in the
Trinity Asset
Management case, supra.
The
submission on behalf of the first respondent that the application for
a declaratory order is disguised as a final interdict,
is therefore
rejected.
36.
Regarding the issue of costs, Mr Terblanche submitted that the amici
curiae should be ordered to pay the costs of the application
with the
first respondent, based thereon that the amici actively associated
themselves with the first respondent's case.
Mr
Budlender countered this submission in contending that the amici
merely endeavoured to assist the Court. In this regard Mr Budlender
referred to inter alia the case of Hoffman v South African Airways
2001(1) SA 1 CC at par [63].
Although
the impression was created that the amici vigorously supported the
first respondent, the amici were surely entitled to
elect which party
to support. Accordingly I am not of the opinion that a vigorous
support by the amici should, in the circumstances,
merit a costs
order against them.
37.
Accordingly the application succeeds and the following order is made.
1.
A declaratory issue in the following terms:
Title
condition 5B(ii) in Title Deed 06/99802 in favour of the Willow
Waters Homeowners Association, No 96/19651/08, (an association
incorporated in terms of Section 21 of the Companies Act, No 61 of
1973, as amended) constitutes a personal right.
2.
The Second Respondent may effect transfer of the immovable property
from the insolvent estate of Christiaan Petrus van der Walt
(Master's
Ref No. 1229/2009) and Lorette van der Walt (Masters Ref No.
T1228/0090) and more fully described as Portion 7 of Erf
2461, Van
Riebeeckpark Extension 26 township, Registration Division IR,
Provence of Gauteng, held by Deed of Transfer T99802/2006,
without
any consent and/or certificate as envisaged in the Title Condition
5(B)(ii) of the First Respondent.
3.
The First Respondent is ordered to pay the costs of the application,
consequent upon the employment of two counsel - including
the costs
of senior counsel.
A
J BAM
ACTING
JUDGE OF THE HIGH COURT
13
June 2013