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[2013] ZAFSHC 128
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Nedbank Ltd v South African Securitization Programme (Pty) Ltd and Others (2017/2011) [2013] ZAFSHC 128 (11 July 2013)
FREE STATE HIGH COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH AFRICA
CASE NO: 2017/2011
In the
matter between:
NEDBANK
LIMITED
........................................................................................................................
Applicant
and
SOUTH
AFRICAN SECURITISATION PROGRAMME (PTY) LTD
.........................................
First
Respondent
PAKISA
DEVELOPMENTS (PTY) LTD
..........................................................................
Second
respondent
THE
REGISTRAR OF DEEDS, BLOEMFONTEIN
..............................................................
Third
Respondent
SIMON
KHOLELA MASEKA
.......................................................................................
Fourth
Respondent
SIBONGILE
SOPHLITHI MASEKA
..................................................................................
Fifth
Respondent
___________________________________________________________________________
HEARD ON:
25 APRIL 2013
___________________________________________________________________________
JUDGMENT BY:
MHLAMBI,
AJ
___________________________________________________________________________
DELIVERED ON:
11 JULY
2013
___________________________________________________________________________
INTRODUCTION:
[1] The Applicant seeks an order:
[1.1]
Compelling
the First Respondent to
instructthe Third Respondent to uplift an interdict registered by the
Third Respondent at the instance of
the First Respondent against the
deed of an immovable property registered in the name of the Fourth
and the Fifth Respondents being
at 925, Welkom Extension 1, District
Welkom, Free State Province(“the property”),
[1.2] Should First Respondent fail to act in accordance
with prayer one above, Third Respondent be directed to register the
transfer
of the property from the Fourth and Fifth Respondents to the
Second Respondent.
[1.3] First Respondent be ordered to pay the costs of
the application.
[1.4] Second, Third, Fourth and Fifth Respondents be
ordered to pay costs only in the event of their opposing the
application.
[1.5] Further and or alternative relief.
[2]
BACKGROUND AND POINTS THAT ARE COMMON CAUSE
The above are succinctly set out in the grounds provided
by the First Respondent in terms of Rule 6(5)(d) (iii) of the Uniform
Rules
as follows:
[2.1] On 19 April 2005, 16 September 2005 and 25 October
2005, the applicant concluded a written loan agreement with the
Fourth
and Fifth Respondents in terms of which the applicant lent and
advanced to the Fourth and Fifth Respondents respectively the amounts
of R350 000.00, R200 000.00 and R215 000.00;
[2.2] As security for the due fulfilment of obligations
of the Fourth and Fifth Respondents towards the applicant pursuant to
the
conclusion of the aforesaid loan agreements, the Fourth and Fifth
Respondents caused for three respective mortgage bonds to be
registered in favour of the applicant, that being bond numbers
B20404/2004, B18904/2005 and B24564/2006;
[2.3] The Fourth and Fifth Respondents breached the
agreements in that they failed to maintain payments of the monthly
instalments;
[2.4] On 25 November 2011 the applicant, Fourth and
Fifth Respondents concluded a written agreement or deed of settlement
pursuant
to an action instituted by the applicant against the
aforesaid respondents under case number 6098/2010;
[2.5] In terms of the settlement agreement, the Fourth
and Fifth Respondents consented to judgment and were provided with an
opportunity
for a period of three months to sell the immovable
property by way of private treaty for an amount equal to the
outstanding balance
owed to the applicant;
[2.6] In the event of the Fourth and Fifth Respondents
failing to sell the property by private treaty on or before the
expiration
of the three month period, the applicant would be entitled
without any further notice to the Fourth and Fifth Respondents to
sell
the immovable property by way of sale in execution,
alternatively, a public auction to the highest bidder.
[2.7] The Fourth and Fifth Respondents provided the
applicant with an irrevocable power of attorney to sell the property
according
to its own discretion at a sale in execution alternatively
a public auction to the highest bidder;
[2.8] The Fourth and Fifth Respondents were unable to
sell the property by way of private treaty prior to the expiration of
the
deadline;
[2.9] The immovable property was then sold on 6 June
2012 at a public auction for an amount of R700 000.00;
[2.10] On 6 June 2012 the Fourth and Fifth Respondents
provided a special power of attorney to attorney Theunis Johannes
Nel, a
director of the firm Maree Gouws Incorporated Attorneys, to
take all such stepsas are necessary toensure that transfer of the
ownership
in respect of the immovable property was registered in
favour of the purchaser.
[2.11] The transfer could not be finalised as the First
Respondent had registered an interdict over the immovable property in
the
Deeds Office;
[2.12] The First Respondent had obtained judgment
against the Fourth Respondent under case number 2017/2011 whereafter
an interdict
was registered against the title deed of the immovable
property in favour of the First Respondent;
[2.13] A written request was addressed to the First
Respondent’s Attorneys of record on 20 September 2012
requesting that
the First Respondent allow the interdict to be
uplifted, thereby ensuring that the transfer could be finalised;
[2.14] On 25 September 2012 the First Respondent,
through its attorneys, communicated to the applicant’s
attorneys its unwillingness
to agree to the upliftment of the
interdict;
[2.15] The amounts owed by the Fourth and Fifth
Respondents towards the First Respondent remain outstanding.
[3]
ISSUES TO BE DETERMINED
Whether the Applicant has:
[3.1]
Locus Standi
to bring the
application
[3.2] Made out a case for the relief sought.
[4]
CONTENTIONS BY THE PARTIES
The Applicant contends that:
[4.1] The settlement agreement which was made an order
of the Court on 25 November 2011 declared the property specially
executable
in favour of the Applicant and that the Order pertinently
authorises the Applicant to sell the property by public auction
should
Fourth and Fifth Respondents fail to sell it by 25 February
2012.
[4.2] The Applicant was entitled to sell the property to
satisfy the judgment as it is both a secured and preferent creditor
while
the First Respondent is but a concurrent creditor,despite the
judgment granted in his favour as against the Fourth and Fifth
Respondents.
[4.3] The Applicant is the only
persona
with
rights to deal with the property and therefore having
locus
standi
to bring the application which is the only remedy available
to it.
[4.4] First Respondentresists the application for the
following reasons:
[4.4.1] The Applicant has no
locus standi
to bring
the application. Only the Fourth and Fifth Respondents have the
necessary
locus standi
to take appropriate steps in regard to
the property.
[4.4.2] No creditor can, in law, seek an order
compelling another creditor to abandon its rights arising from the
attachment of
the property and instruct the Registrar of Deeds to
uplift the interdict.
[4.4.3] By being a secured creditor does not imbue the
Applicant with the necessary
locus standi
, but determines the
privileged position the Applicant will hold in the event of the
distribution of the proceeds after the sale
of the property.
[4.4.4] Applicant failed to make out a case in his
founding affidavit and the allegations in his replying affidavit
should be struck
out.
[4.4.5] The order obtained in the Magistrates Court
entails no more than that the Applicant is excused from levying
execution against
Fourth and Fifth Respondents movable property.
[4.4.6] The Applicant has misconstruedits remedies.
[4.4.7] The Fourth and Fifth Respondents cannot seek an
order that the agreement of sale should take precedence over an
attachment
of the property in terms of the Rules of Court.
[4.4.8] Fourth and Fifth Respondents had no right to
sell the property which was judicially attached which had to be dealt
with
in accordance with Rule 46 of the Uniform Rules.
EVALUATION
[5] First Respondent did not file an opposing affidavit
but a Notice in terms of Rule 6 (5) (d) (iii) raising the two issues
that
the Applicant had no
locus standi
to bring this
application and that no case in law was made out for the relief
sought.
[6] In support of its case to prove
locus standi,
Mr
Cilliers, on behalf of the applicant, referred to
IvoralProperties
(Pty) LTD v Sheriff, Cape Town andOthers
,
2005 (6) SA 96
(CPD) at 113 G-J and
Standard Bank of South Africa Ltd v
Saunderson and Others
,
2006 (2) SA 264
(SCA) at 269 D- Eand
argued that the Applicant is entitled to satisfy the judgment by
selling the property.This interpretation
of the law is correct.
[7] In the
Ivoral Case
,
supra
,
it
was stated in paragraph 50
“
it is axiomatic that a
judgment or order
ad
pecuniamsolvendam
is
an indispensable prerequisite for the issuing of a writ of execution.
A judgment creditor who has obtained a judgment or order
sounding in
money is in law entitled to procure satisfaction thereof by electing
to invoke any of the procedures recognised by
the Supreme Court Act
the Uniform Rules of Court and the common law as a form of execution.
Relief declaring immovable property
executable entails no more than
that a judgment creditor who elects to obtain satisfaction of a
judgment debt by means of execution
against the judgment debtor’s
immovable property is excused from levying execution against the
judgment debtor’s movables
first………. but
merely a request for a direction with regard to the execution of a
judgment, which although
claimed summarily and simultaneously, in
essence, is ancillary thereto”.
[8] In countering the argument Mr van Reenen, on behalf
of the First Respondent, submitted that there was no authority that
the
Applicant, as a secured creditor of the Fourth and Fifth
Respondents, had acquired the necessary
locus standi
to enforce
the sale transaction. Its security simply means that whateveramounts
are realised in respect of the sale of the property
will be
distributed to the Applicant First.
[9] Similarly, even if the settlement agreement may have
been made a Court Order, it did not provide the applicant with the
necessary
locus standi
in respect of the present application.
It does not place the Applicant in the shoes of the judgment debtor
being the Fourth and
Fifth Respondents.
[10] In paragraph 15.1, page 18 of the Founding
Affidavit, the Applicant confirmedthat Fourth and Fifth Respondents
were the sellers
of the property as per the conditions of sale that
applied to the public auction and they duly signed the saleagreement
as such.
[11] In terms of the paragraphs 23.2 and 23.4 on page
29, Applicant stated that both Fourth and Fifth Respondents were
compelled
to effect transfer of the property to the Second Respondent
as sellers and consequently entitled to the relief sought to enable
them to fulfil their contractual obligations.
[12] Paragraph6.9 on page 231 of the Replying affidavit
reads as follows:
“
Die Vierde en Vyfde
Respondente het formaliteitshalwe as die geregistreerde eienaars die
koopaanbod- dokument gedateer 31 mei 2012
geteken”.
[13] In Paragraph 6.19 on page 233 of the same Replying
Affidavit it is stated that the Fourth and Fifth Respondents had no
further
rights to deal with the property after 25 February 2012.
[14] This elicited a sharp rebuke from Mr Van Reenen who
stated in his Heads of Argument that the Applicant sought to make out
a
completely new case in Reply, which directly contradicted its
allegations in its founding papers and thatsuch allegations in the
replying affidavit stood to be struck out. I agree with this view.
The Applicant must stand and fall by itsfounding affidavit.
[15] Mr Van Reenen argued further that even if the
allegations in reply were taken into account, given that the property
was purportedly
sold at a public auction without resorting to the
prescribed execution process and the involvement of thesheriff, the
Fourth and
Fifth Respondents were the persons with the necessary
locus
standi
to take any further steps with regard to the property. I
agree withthis view. The Fourth and Fifth Respondents played a role
and
were not merelybrought onto the scene by reason of the
foreclosure.
[16] They controlled thecourse of events and in fact
took part in the formulation of the sale. See
Sedibe v United
Building Society
1993 (3) SA 671
(T) at 675 H-J.
[17] Mr Cilliers argued that the property was declared
specially executable when the settlement agreement was made an Order
of Court.
The reference to
Saunderson
,
supra
,
does not advance the Applicant’s argument any further.The
approach in
Saunderson
was ventilated fully in
Gundwana
v Steko andOthers
2011(3) SA 608 (cc)paras 42-49.
[18] In counter-argument, Mr Van Reenen correctly said
that the applicant failed to provide the Court with a copy of the
Magistrate’s
Court Order. Referring to the provisions of the
Magistrate’s Court Rule 27 he submitted that the settlement
agreement did
not make provision for it to be made an Order of Court
as provided by the rule. It only provided for the fulfilment of
future conditions.
[19] Consequently, the Magistrate acted
ultra vires
if
it made the settlement an order as contended.
[20] Furthermore, if the property were declared
specially executable as contended by the applicant in reply, then the
entire case
in its founding papers must fail as the sale by the
Fourth and Fifth Respondents would then be a nullity as the Applicant
would
have been obliged to follow the prescribed execution process in
terms ofRule 43 of the Magistrate’s Court Rules. See
Mattoida
Construction (SA) (Pty)LTD v E Carbonari Construction (Pty) Ltd
1973
(3) SA 327
(D) at 332 A-B. Iagree with this view.
[21] Section 66 (1) (a) of the Magistrate’s Court
Act provides that a judgment for the payment of money shall be
enforceable
against the judgment debtor’s immovable property
when the Court, on good cause shown, so orders. See
Jafta v
Schoeman and Others Van RooyenScholtz and Others
[2004] ZACC 25
;
2005 (2) SA
140
(cc);Rule 46 of the Uniform Rules of Court;
Mkhize vUmvoti
Municipality and Others
2012 (1) SA 1
(SCA) at page 15 paras
26-28.
Jafta
,
supra,
set out the relevant
circumstances that the Court shouldconsider whether or not to declare
a natural person’s primary residencespecially
executable.
[22] The Applicant is not without a remedy. Two
possibilities were made by Mr Van Reenen:
Applicant should apply for the setting aside of the
attachment of the property.
Being armed with a Court Order, the Applicant should
harness the legal process of execution to attach the property and
enjoy the
rights afforded by the provisions of Rule 46.
CONCLUSION
[23] Both Applicant and First Respondent have mortgages
over the property;the First Respondent having a judicial mortgage in
the
form of a
pignusjudiciale
.The effect of a
pignusjudiciale
or attachment in execution, is to give a
judgment creditor a preference on the proceeds of the sale of the
property attached as
against the other creditors of the debtor save
(1) those who have a prior effective security over such property, and
(2) other
judgment creditors who lodge writs of execution, with the
proper officer, within a specified period after the original
attachment.
See Mortgage and Pledge, pages 60 and 70. Therefore the
Applicant’s position, whichever way it can be viewed, ranks
superior
to the other creditor.
[24] However, the relief sought by the Applicant as the
application stands, cannot be entertained and therefore stands to be
dismissed.
COSTS
[25] In the result, costs should follow the event.
ORDER
[26] The application is dismissed with costs.
______________
J.J. MHLAMBI, AJ
On behalf of applicant: Adv H.J. Cilliers
Instructed by:
Hill McHardy&Herbst Attorneys
BLOEMFONTEIN
On behalf of first respondent: Adv W.H.J. van Reenen
Instructed by:
SpangenbergZietsman& Bloem
BLOEMFONTEIN