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[2013] ZAGPPHC 183
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Maleka and Another v Nedbank Ltd and Others (23766/2008) [2013] ZAGPPHC 183 (3 July 2013)
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT.
PRETORIA
REPUBLIC OF SOUTH AFRICA )
CASE
NO: 23766/2008
DATE:03/07/2013
In
the matter between:
MASHEGO
FREDERICK MALEKA
.................................................
1st
APPLICANT
ZANELE
ELLEN
MALEKA
…............................................................
2nd
APPLICANT
and
NEDBANK
LIMITED
...........................................................................
1st
RESPONDENT
THE
SHERIFF - PRETORIA
NORTH
.................................................
2nd
RESPONDENT
MPHO
MARIA
MONAGENG
...............................................................
3rd
RESPONDENT
DEEDS
REGISTRY
….........................................................................
4th
RESPONDENT
JUDGMENT
KUBUSHI,
J
INTRODUCTION
[1]
This is an opposed application in terms of which the applicants
sought an order declaring the sale in execution of their residential
property (the property) held on 23 February 2012 to be invalid and to
be set aside. The property was purchased by the 3rd respondent
and
has been transferred into her name. The application further sought to
order the 4th respondent to de-register and transfer
back the
ownership of the property from the 3 rd respondent to the applicants.
[2]
When the applicants launched the application the order requested
against the 4th respondent was for the 4th respondent to be
interdicted from registering and transferring the ownership of the
property from the applicants to the 3rd respondent and/or any
third
party. This prayer was amended when the applicants became aware that
the property has already been transferred into the name
of the 3rd
respondent.
[3]
During argument, the 1st respondent’s counsel contended that
the amendment should not be considered because it was not
served on
the 3 rd respondent. My view is that in the interest of justice and
in order to bring these proceedings to finality,
the amendment should
be granted. Neither the 1st respondent nor the 3rd respondent would
be prejudiced by such non service. The
3rd respondent is not opposing
the application and I do not think she would have opposed the
application even if the amendment
was served on her.
[4]
The 1st respondent is opposing the application. There is no
substantive relief sought against the second, third and fourth
respondents, and they have been cited to the extent of any interest
they might have in the matter. They are not opposing the application.
[5]
The applicants based their case on the following grounds:
a.
that the 1st respondent should have considered the changed agreement
between the parties before selling the property, and
b.
that the court was not given an opportunity to decide after
consideration of all relevant circumstances, whether authorised
execution of the immovable property is justified.
THE
FACTUAL MATRIX
[6]
Pursuant a court order against the applicants granted on 13 August
2008 the applicants’ residential property was declared
executable. That order was granted consequent to the applicants’
failure to pay a home loan bond agreement with the 1st respondent
over the purchase of the property.
[7]
For a period of about four years the 1st respondent did not sell the
property in execution allowing the applicants to first
make nominal
payments towards the
reduction
of their arrears. Later when the applicants fell in arrears with
their payments again, the 1st respondent arranged that
they sign a
Nedbank Assisted Sale Agreement (the NAS).
[8]
Through the NAS, the applicants mandated the 1st respondent to employ
an agent who was to facilitate the sale of the property.
In terms of
the NAS the mandate was intended to expire and was renewable after
every 100 days. No sale resulted from this mandate.
At the expiry of
the 100 days for different reasons provided by the parties, the
mandate was not extended and the account of the
applicants was
formally withdrawn from the NAS option.
[9]
A sale in execution was as a result scheduled for 23 February 2012.
The applicants were informed on 22nd February 2012 of the
impending
sale in execution. They were also informed of the 1st respondent’s
requirements for the stay of the sale in execution.
The 1st
respondent required an upfront payment of 40% of the indebted amount
to stay the sale and the balance to be payable ‘in
six months
period from that day’. The applicants were unable to make the
required upfront payment and on the scheduled date
the property was
sold in execution. Despite various attempts by the applicants’
legal representative to settle the matter
the property was eventually
transferred into the name of the 3rd respondent on 6 June 2012.
THE
CHANGED AGREEMENT BETWEEN THE PARTIES
[10]
The applicants’ contention is that the sale in execution was
carried out despite the NAS and the oral agreement between
the
parties. According to their counsel, the applicants had entered into
an oral agreement with the 1st respondent, through its
agent, in
respect of which arrangements were negotiated to pay off the amount
due by the applicants. The applicants should have
been given an
opportunity to make payments before further action was taken against
them. There was also an oral agreement that
the applicants would have
the right to purchase the property again in the event it is sold. The
applicants were, however, not given
an opportunity to exercise this
right, so it was argued.
[11]
According to the applicants’ counsel, in terms of the NAS, the
applicants were supposed to have been given an opportunity
to sign
the extended mandate. His argument is that the 1st respondent should
have given the applicants notice of its intention
to remove them from
the NAS option. There was a duty on the 1st respondent to verify why
the mandate had not been extended before
it could take action against
the applicants The applicants received the mandate late because of
delay in the postal service and
by the time they returned it the 1st
respondent had already removed them from the NAS option, so the
argument went.
[12]
The 1st respondent’s counsel in resisting this ground contended
that the applicants failed to show any bona fides on
their part in
that they undertook to pay off their indebtedness to the 1st
respondent from the proceeds of the sale of one of their
immovable
properties but they failed to do so. At the time of the hearing of
the application their last payment was on 25 May 2010.
[10]
As regards the NAS option, he argued that the 1st respondent had
followed all the procedures and there were no irregularities
on its
part. The NAS lapsed and the applicants failed to extend the mandate.
Consequently the 1st respondent was entitled to recover
the money
owed from the applicants.
[11]
To my mind, there was no duty on the 1st respondent to go out of its
way to find out why the applicants had not extended the
mandate. The
parties had agreed that the agreement would be for a period of 100
days. When the 100 days expired the duty was on
the applicants to
ensure that the mandate was extended. The first respondent waited for
a period of forty days, which to me is
reasonable, before taking
further action against the applicants. The applicants were given
sufficient time within which to extend
the mandate and they failed to
do so. When they did not receive notification from the 1st respondent
to extend the mandate, they
should have approached the first
respondent and enquired about the extension.
[12]
There was no legitimate expectation as the applicants’ counsel
suggested in argument. The mandate had expired and the
NAS was no
longer binding on the 1st respondent. The applicants were aware and/
ought to have known that the mandate had expired
and should have
taken measures to ensure that it was extended before the 1st
respondent took steps against them. I am thus satisfied
that the 1st
respondent was entitled in such circumstances to take further steps
against the applicants.
EXECUTION
OF THE IMMOVABLE PROPERTY NOT JUSTIFIED
[16]
The applicants contended that, when declaring the property executable
and when the warrant of execution was issued, the court
was not given
the opportunity to consider the guidelines set out in JAFTHA v
SCHOEMAN <& OTHERS: VAN ROOYEN v STOLTZ &
OTHERS
[2004] ZACC 25
;
2005 (2)
SA 140
(CC).
[17]
According to the applicants the 1st respondent had simply executed
the applicants’ property based on a four year old
execution
order and failed to consider the parties’ changed agreement and
the aforesaid guidelines. The 1st respondent was
duty bound to afford
the court an opportunity to consider the guidelines afresh
irrespective of the order obtained in 2008. The
sale in execution of
their property was therefore unjustifiable in light of section 26 of
the Constitution.
THE
APPLICABLE LAW
[18]
The guidelines set out in
[
19] Section 26 of the Constitution provides that - “Housing -
(1)
Everyone has the right to adequate housing.
(2)
The state must take reasonable legislative and other measures, within
its available resources, to achieve the progressive realisation
of
this right.
(3)
No one may be evicted from their home, or have their home demolished,
without an order of court made after considering all the
relevant
circumstances. No legislation may permit arbitrary evictions.”
[20]
The only way to determine whether the right to adequate housing has
been compromised is to require judicial oversight in all
cases of
execution against immovable property. This oversight is required also
in the absence of formal opposition and where the
debtor is in
default or where he or she is ignorant of his or her rights.
[21]
The sole purpose of requiring judicial oversight in all cases of
execution against immovable property is to prevent the infringement
of the right to adequate housing. See MKHIZE v UMVOTI MUNICIPALITY
(628/2010)
[2011] ZASCA 184
(30 September 2011) at para [20]
[22]
Judicial oversight is therefore constitutionally required so that the
judicial officer can “engage in the balancing process”
and “consider all the relevant circumstances of a case”
to determine whether there is a good cause to order execution
against
the immovable property concerned. See JAFTHA v SCHOEMAN & OTHERS:
VAN RQOYEN v STOLTZ & OTHERS above at paras [42]
- [43] and [55].
[23]
The absence of judicial oversight imperils a defendant’s
fundamental right of access to adequate housing contained in
section
26 (1) of the Constitution. The warrant of execution issued without
the required judicial oversight is invalid as it had
taken place in
breach of the defendant’s constitutional rights. The resultant
sale in execution, on the same reasons, is
also invalid and a
nullity. See MENOA & ANOTHER v MARKOM & OTHERS
2008 (2) SA
120
(SCA) at para [21].
ANALYSIS
OF EVIDENCE
[24]
In this instance, the court granted summary judgment against the
applicants and in the same judgment ordered the immovable
property
executable.
[25]
It is common cause that the sale in execution was pursuant to a valid
judgment granted against the applicants by default on
the 13 August
2008. One would infer that the warrant of execution which was
subsequently issued by the registrar of the High Court
was consequent
to the said court order which declared the property executable.
[26]
The applicants’ contention is that firstly, the court declared
the property executable without drawing the applicants’
attention and/or itself to the provisions of section 26 of the
Constitution. According to the 1st applicant in the founding
affidavit,
there was no enquiry as to whether the applicants’
right and that of their family to housing would be adversely affected
by the execution of the applicants’ house. Secondly,
considering the fact that the order against the applicant had been
granted
more than four years ago, the warrant of execution was issued
without judicial oversight - a procedure held by the Constitutional
Court in the JAFTHA - judgment to be unconstitutional if the warrant
of execution would infringe the judgment debtor’s rights
to
access to adequate housing in terms of section 26 of the Constitution
and would therefore have to be justified.
[27]
There is reason to believe that the applicants and their family’s
section 26 (1) right of access to adequate housing
might have been
infringed. The 1st applicant averred in the founding affidavit that
the property is the only registered property
that they have and they
may be homeless together with their school going minor children
should the property be sold in execution.
According the 1st applicant
before the warrant of execution was issued the court did not satisfy
itself that the applicants will
not lack adequate housing if their
property was sold in execution.
[28]
On the perusal of the record there is no indication how the court
came to the conclusion declaring the property executable.
The
application for summary judgment read as follows:
“
KINDLY
TAKE NOTICE that Application will be made to this Honourable Court on
WEDNESDAY THE 13™ AUGUST 2008 at 10H00 or as
soon thereafter as
Counsel may be heard for Summary Judgment to be entered against the
1st and 2nd Defendants, jointly and severally,
the one paying the
other to be absolved, as follows:-
1.
Payment of the sum of R273, 511.11;
2.
Interest at the rate of 13,80% per annum as from the 2nd May 2008 to
date of payment
3.
An Order Declaring
ERF
767 SOSHANGUVE BLOCK GG PRETORIA; REGISTRATION DIVISION: JR MEASURING
312 SQUARE METRES; HELD BY VIRTUE OF DEED OF TRANSFER
T31022/2008
(t31022/2002), executable;
4.
Costs of Suit
5.
Further and alternative relief.
AND
FURTHER TAKE NOTICE that the Affidavit of KAYOORI CHIBA and the
Covering Mortgage Bond annexed thereto will be used in support
of
this application.
TAKE
FURTHER notice that should the Defendants intend opposing this
Application, the Defendants’ attention is drawn to the
provisions of Rule 32 of the Rules of the above Honourable Court
insofar as the filing of an answering affidavit is concerned.”
[29]
Attached to the application for summary judgment is the affidavit by
the said KAYOORI CHIBA and a copy of the Covering Mortgage
Bond. The
affidavit sets out only the requirements of rule 32 of the Rules.
Nothing is stated about what is required in the JAFTHA
- judgment. It
is therefore not apparent from the record itself what the court
considered to come to the conclusion declaring the
property
executable. The reasons provided to the court at the hearing of the
summary judgment application, if any, are also not
enunciated in the
1st respondent’s answering affidavit. The court should have
ordered execution after having considered all
relevant circumstances,
which appears not to be the case in this instance.
[30]
I am prepared to accept that although the guidelines enunciated in
the JAFTHA - judgment were in place in 2008 when the property
was
declared executable, they were, however, not yet streamlined. There
was no set procedure to follow when declaring a property
executable.
[31]
Fast forward to 2012. The guidelines in the JAFTHA - judgment had
been streamlined by then. Rule 46 (1) was amended in 2010
to give
effect to the guidelines. The rule reads that -
“
(1)
(a) No writ of execution against the immovable property of any
judgment debtor shall issue until -
(i)
a return shall have been made of any process which may have been
issued against the movable property of the judgment debtor
from which
it appears that the said
person
has not sufficient movable property to satisfy the writ; or
(ii)
such immovable property shall have been declared to be specifically
executable by the court or, in the case of a judgment granted
in
terms of rule 31 (5), by the registrar: Provided that, where the
property sought to be attached is the primary residence of
the
judgment debtor, no writ shall issue unless the court, having
considered all the relevant circumstances, orders execution against
such property.
(b)
...”
[32]
It is not in dispute that the property in question is the residential
property of the applicants and that the property is their
primary
residence. It is also common cause that the court did not consider
all the relevant circumstances before the writ was issued.
It is
common cause that, at the time of the sale in execution, at least
four years had expired since the property was declared
executable. It
is indeed so that probabilities are that within that time period the
applicants’ circumstances might have
changed. I am thus of the
view that the applicants are correct, the court should have
considered their circumstances before the
writ was issued to
determine whether at that time the property was executable or not. To
my mind, by failing to give the court
that opportunity, the
applicants’ fundamental right to adequate housing were
infringed.
[33]
The warrant of execution in the circumstances of this case, in my
view, is tantamount to a re-issued warrant of execution.
The court in
MENOA & ANOTHER v MARKOM & OTHERS above at para [15] found a
re-issued warrant of execution to have been issued
by the clerk of
the court and that it was thus issued without judicial oversight.
Judicial oversight must be provided at the point
of sale in execution
against immovable property. Remember, as already stated, the sole
purpose of requiring judicial oversight
in all cases of execution
against immovable property is to prevent the infringement of the
right to adequate housing. A sale in
execution of immovable property
must not infringe this right as well.
[34]
In my judgment the warrant of execution in this instance is invalid
as it was issued without judicial oversight required by
the
Constitutional Court in the JAFTHA - judgment. The absence of this
procedural safeguard jeopardized the applicants’ right
to
adequate housing. The sale in execution to the 3rd respondent is also
invalid for the same reason.
RE-REGISTRATION
OF THE PROPERTY
[35]
In the light of the MENOA & ANOTHER v MARKOM & OTHERS -
judgment
above, I cannot order the 4th respondent to de-register the property
and transfer it in the name of the applicants. Similarly
as in this
instance, that court found the sale in execution to be void ab initio
but did not order the registrar to transfer the
property back into
the name of the appellant. The reasons advanced by that court were
that by simply directing the Registrar of
Deeds to re-register the
property in the name of the appellant would neither be ‘appropriate
relief as required by section
38 of the Constitution, nor would it be
a ‘just and equitable order’ in terms of section 172 (1)
(b) of the Constitution.
In coming to that conclusion, that court
considered the fact that the respondent had paid off the mortgage
bond amount which was
owed by the appellant. It also considered the
fact that by ordering re-registration in the name of the appellant,
the appellant
would be unjustly enriched and the respondent would be
left out of pocket, it then concluded that the property be recovered
in
vindicatory proceedings. Equally so, the appellants will have to
recover the property in vindicatory proceedings.
COSTS
[36]
As the successful party the applicants are entitled to the costs of
this application which shall include the costs of the
sale in
execution.
ORDER
[37]
In the premises I make the following order:
a.
the sale in execution held on the 23 February 2012 and the subsequent
transfer of the property to the 3rd respondent is declared
null and
void.
b.
the 1st respondent is to pay the costs of this application including
the costs of the sale in execution.
EM KUBISHI
JUDGE
OF THE HIGH COURT
Appearances:
HEARD
ON THE : 30 MAY 2013
DATE
OF JUDGMENT : JUNE 2013
APPLICANTS’
COUNSEL : ADV MALOAA
APPLICANTS’
ATTORNEY: MAHLANGU MASHOKO ATTORNEYS
1st
RESPONDENT’S COUNSEL : ADV VAN DER HEVER
1st
RESPONDENT’S ATTORNEY : HACK STUPEL & ROSS