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[2012] ZAFSHC 178
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Farmsecure Grains (Edms) Bpk v Du Toit en Ander (2382/2012) [2012] ZAFSHC 178; 2013 (1) SA 462 (FB) (20 September 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 2382/2012
In the matter between:
FARMSECURE GRAINS
(EDMS) BEPERK
(REGISTRASIE NR
2004/006764/07)
...........................................
Applicant
and
JOHANNES PETRUS
CORNELIUS DU TOIT
....................
1
st
Respondent
IDENTITEITSNOMMER:
JOHANNA ELIZABETH
DU TOIT
......................................
2
nd
Respondent
IDENTITEITSNOMMER:
JUDGMENT:
LEKALE, J
HEARD ON:
30 AUGUST 2012
_______________________________________________________
DELIVERED ON:
20 SEPTEMBER 2012
_______________________________________________________
INTRODUCTION AND
BACKGROUND
[1] This is essentially
an opposed application for confirmation of an interim order
authorising the applicant to take possession
of and keep certain
specified movable properties belonging to the respondent with the
assistance of the sheriff on the basis of
a notarial bond registered
in its favour by the respondents.
[2] On the 14
th
June 2012 a rule
nisi
issued at the instance of the applicant
calling upon the respondents to show cause why:
“
2.1 Die
applikant nie gemagtig sal word om sy sekuriteit soos verleen
kragtens die Notariële Verbandakte Nr BN7533/2010 te
bevestig en
perfek te maak deur die respondente se roerende goedere soos voorsien
deur die gesegde Notariële Verband wat aangeheg
sal word tot die
applikant se funderende eedsverklaring as aanhangsel “C”
in besit te neem en te hou nie;
Die Balju te Kroonstad of
sodanige balju binne wie se regsgebied die vermelde goedere soos
vervat in Aanhangsel “C”
hiertoe gevind mag word, nie
gemagtig en gelas sal word om daarop beslag te lê;
2.3
Respondente
nie beveel sal word om die koste van hierdie aansoek te betaal nie.”
[3] The respondents have
since delivered an opposing affidavit to which the applicant has
replied.
[4] On the 11 October
2010 and the 15
December 2011 the parties concluded
written production agreements in terms of which the applicant
appointed the respondents as joint
independent contractors for the
purposes of conducting farming activities on behalf of the applicant
on the property leased by
the applicant from them for that purpose.
[5] The essential terms
of the agreements were,
inter alia
, that ownership in the
crops planted shall, at all times, vest in the applicant as the
principal and the respondents, as independent
contractors, will keep
the harvest for and on behalf of the applicant and they shall have no
claim thereto.
[6] On the 3 November
2010 the respondents registered a Notarial Bond (bond) in terms of
which they hypothecated specified and defined
movable properties as
well as all other movable property then owned or to be acquired by
them in future in favour of the applicant
as security for R3.5
million which they owed to it.
[7] In terms of Clause
14.4 of the bond the applicant is generally entitled to immediately
and without notice assume possession
of and keep or sell the
hypothecated property for the amount owing, whether payable or not,
at the respondent’s costs in
the event that it, at any time,
have reason to believe that its interests are placed in danger in any
manner whatsoever as a result
of any conduct or negligence of,
inter
alia
, any creditor of the respondents.
[8] On the 22
nd
May 2012 the sheriff of Kroonstad attached some movable property
belonging to the respondents in execution of a judgment granted
against the first respondent in favour of his creditor.
[9] The applicant,
thereupon, launched the present proceedings on the 8 June 2012 on an
urgent basis citing the fact of the said
attachment as giving cause
for seeking to complete its security by taking possession of the
hypothecated movables.
ISSUES IN DISPUTE
[10] In both the opposing
papers and heads of argument submitted the respondents contend that
the relief sought by the applicant
in the Notice of Motion is not
supported by the founding affidavit and is, in fact, in conflict
therewith insofar as the Notice
of Motion prays for,
inter alia
,
an order authorising the sheriff to attach the property and to hand
same over to the applicant while the founding affidavit avers
that
the property is to be left on the farm so as to enable the
respondents to continue with the farming operations.
[11] The respondents,
further, contend that the bond on which the applicant relies is a
special notarial bond which does not hypothecate
general movable
property and is, as such, limited to the specified and clearly
recognisable movables in its operation.
[12] The respondents,
furthermore, maintain that the fact that the applicant never, at any
stage, approached the respondents with
a request for their consent
for it to assume control over the hypothecated movable property is
fatal to the “draconian”
relief it seeks in the light of
the requirement for such a request within the jurisdiction of this
court.
[13] It is not necessary,
according to the respondents, for the applicant to perfect its
security in the light of the provisions
of s1(1) of the Security by
Means of Movable Property Act no 57 of 1993 (the Act).
SUPPORT FOR RELIEF
SOUGHT
[14] It is common cause
between the parties that in the Notice of Motion the applicant prays
for an order authorising the sheriff
to attach the specified property
and to remove the same and hand it over to the applicant while, in
the founding affidavit, the
applicant undertakes only to assume
control and oversight over the property without removing it from the
site so as to enable respondents
to continue with farming operations.
[15] In the respondent’s
view the aforegoing state of affairs exhibits conflict between the
order prayed for and the founding
affidavit and, as such, the interim
order should not have been granted.
[16] The applicant, on
its part, contends that it is entitled to the relief prayed for and
that whether or not it removes the property
from the site rests in
its sole discretion. Mr Hefer for the applicant, further, correctly
points out that the interim relief granted
only authorises the
sheriff to attach the property and is silent on removal and handing
over of the same to the applicant.
[17] I am convinced that
the order in question is in line with the deposition made in support
thereof to the extent that it only
authorises attachment by the
sheriff.
[18] The aforegoing
order, read together with the interim order authorising the applicant
to take possession of the property in
question and to keep it,
effectively gives the applicant the possibility to assume control and
oversight over the property without
removing it in line with its
undertaking. An undertaking made under oath suffices to sustain an
order as the case was in
SENWES LIMITED v MULLER
2002
(4) SA 134
TPD at 144 B – C where the court accepted an
undertaking by the applicant not to sell property attached and handed
over on
the basis of special notarial bond.
SPECIAL NOTARIAL
BOND AS OPPOSED TO GENERAL NOTARIAL BOND
[19] In argument before
the court the parties are effectively
ad idem
that the
operation of the bond herein is limited to specified and identified
items insofar as Mr Hefer submitted that the property
attached is
that which is identified in the bond.
[20] It is, therefore, in
my view not necessary for the purposes of this application to decide
whether or not the bond is a special
and general notarial bond as its
heading indicates.
REQUEST OR DEMAND
AS A PREREQUISITE FOR RELIEF
[21] The parties are
effectively in agreement that the present application was not
preceded by either a request or a demand for
the respondents to make
the hypothecated movables available for the applicant to take
possession of the same.
[22] The respondents
contend that such a request or demand is a
sine qua non
for
the draconian relief claimed and relies, in this regard, on the
unreported decision of this court in
SENTRAAL OOS (KOöPERATIEF)
BPK v J H POTGIETER AND ANOTHER
case number 3870/94.
[23] On its part the
applicant maintains that, in terms of the bond, it is not
contractually obliged to give notice to the respondent
before it can
enforce its real right.
[24] A perusal of the
Sentraal Oos decision reveals that the court was concerned with a
general notarial bond in that matter as
opposed to a special notarial
bond which confers a real right. The applicant in Sentraal Oos was a
holder of a general notarial
bond which it sought to perfect and the
court found,
inter alia,
that its contractual remedy is
normally to first request or notify the respondents to release the
hypothecated movables and to
approach the court only as a last resort
if the respondents refuse to oblige.
[25] I am convinced that
the present matter is distinguishable from the Sentraal Oos
application insofar as the applicant herein
is a holder of a special
notarial bond which confers a real right on it
ex lege
. (See
s1(1) of the Act).
[26] As correctly
contended by the respondents, the holder of a real right is entitled,
in law, to follow its property wherever
it may be found and there and
then to vindicate. (See
CHETTY v NAIDOO
1974 (3) SA 13
(A) at 20 B.)
[27] A demand or request
is, thus, not a condition precedent to the enforcement of a real
right. The same applies, in my view, to
claims for specific
performance where the contract does not require a demand before legal
proceedings may be instituted. In my
judgment, the absence of a
demand or request in a case of a claim based on a real right may in
an appropriate case affect the issue
of costs. (Compare
REICHMAN
v YSEBRAND AND COMPANY
1930 OPD 148
and
AMS MARKETING
COMPANY (PTY) LTD v HOLZMAN AND ANOTHER
1983 (3) SA 263
(W)
at 270 C - D.)
NECESSITY OR
APPROPRIATENESS OF PERFECTION ORDER
[28] The parties are in
agreement that the legal effect of a registered special notarial bond
is that the mortgagee, in the shoes
of the applicant, acquires a
possessionless pledge over the hypothecated movables. (See
SENWES
LIMITED v MULLER
supra
at 139 I – J.)
[29] The respondents
contend that, in the light of the fact that the applicant has a real
right in the hypothecated property, it
is not necessary for it to be
in actual possession or control of mortgaged movables in order to
perfect its security. In this regard,
Mr De Wet, for the respondents,
relies on decisions emanating from the old Natal such as
BARCLAYS
NATIONAL BANK AND ANOTHER v NATAL FIRE EXTINGUISHERS MANUFACTURING CO
(PTY) LTD AND OTHERS
1982 (4) SA 650
(D).
[30] The applicant, on
its part, cites
SENWES LIMITED v MULLER
supra
,
in support of its contention that it is contractually entitled to
have actual physical possession of the hypothecated property
once it
has reason to believe that its interests are placed in danger as
contemplated in the bond.
[31] A glance at
BARCLAYS
NATIONAL BANK AND ANOTHER v NATAL FIRE EXTINGUISHERS MANUFACTURING CO
(PTY) LTD AND OTHERS
supra,
shows that the courts in
Natal were, prior to the enactment of the Act herein, generally
reluctant to allow a mortgagee in the
position of the applicant to
complete its security where the Natal Act, which was to the same
effect as the Act herein, was applicable.
[32] The position of such
a mortgagee was, however, aptly summarised by Ramsbottom J in
MILNE,
N.O. AND DU PREEZ, N.O. v DIANA SHOE AND GLOVE FACTORY (PTY) LTD AND
ANOTHER
1957 (3) SA 16
(W) at 20F – H when he observed,
in respect of the Natal Act, that:
“
By
accepting the security of a special bond of movables, the bondholder
accepts something less than a pledge constituted by delivery
of
possession, and takes the risk which is inherent in the situation.”
[33] In my view a
provision in the bond which allows the mortgagee to take actual
possession of the hypothecated movables in specified
circumstances in
order to complete its security seeks to improve the position of such
a mortgagee by removing or minimising the
risk identified by the
court in the
MILNE, N.O. AND DU PREEZ, N.O. v DIANA SHOE AND
GLOVE FACTORY (PTY) LTD AND ANOTHER
matter.
[34] The present matter
is, however, distinguishable on the facts from
SENWES LIMITED v
MULLER
(
supra
) insofar as the respondents, in
that matter, consented in the bond to the completion of the
applicant’s security in the event
of the specified
circumstances. The applicant in
SENWES LIMITED,
effectively, sought to enforce the relevant contractual provision
which supplemented the legal position conferred by the Act. In
the
present matter no such agreement on perfection of security exists.
The respondents effectively consent to enforcement of the
applicant’s
rights as conferred by the bond. As correctly submitted by Mr De Wet,
the applicant in a matter such as
SENWES LIMITED
effectively prays for specific performance as against the respondent
as was found in the unreported decision of this court in
THE
STANDARD BANK VAN SUID-AFRIKA BEPERK v H C CALITZ
case number
572/2000 where Wright J emphasised at paragraph 4 that:
“
Wat in die
waarheid in so ‘n geval gevra word, is niks meer as ‘n
bevel vir spesifieke nakoming van ‘n persoonlike
reg waarop die
verbandhouer geregtig is uit hoofde van die terme van die
verbandakte. Soos in die geval van enige eis om spesifieke
nakoming
het die hof ‘n diskressie om dit toe te staan met inagneming
van al die omstandighede.”
[35] The applicant, as a
holder of a real right in the specially hypothecated movables, is
contractually entitled to take possession
of the said movables
without notice upon the occurrence of any of the contractually
specified events as a way of enforcing its
real right as opposed to
perfecting its security. To secure the relief it seeks herein, it has
to prove that anyone of the agreed
circumstances has eventuated and
that it is,
ex contractu
, entitled to perfect its security.
(Compare
THE STANDARD BANK VAN SUID-AFRIKA BEPERK v H C CALITZ
supra,
at para [9] in respect of refusal as a prerequisite for
a court order.
[36] I am not persuaded
by the circumstances in the present matter that the applicant is
contractually entitled to complete its
security as the case was in
SENWES LIMITED v MULLER
(supra
).
In casu
the bond regulates,
inter
alia, when and how the bondholder is
to enforce its real right by
inter alia
, taking possession of
the hypothecated property for the purposes of selling them or keeping
them for the money owing. The situation
would, most probably, be
different if the relief sought by the applicant was either an
interdict or a vindicatory order. It is
not necessary or appropriate,
therefore, for the applicant to perfect its security regard being had
to the provisions of section
1(1) of the Act.
COSTS
[37] In my view there
exists no cause in this matter for a departure from the normal
practice with regard to costs and no request
to that effect is before
the court.
ORDER
[38] In consequence the
rule
nisi
is discharged.
[39] The applicant shall
pay the respondents’ costs.
_______________
L. J. LEKALE, J
On behalf of the
applicant: Adv. S. Hefer
Instructed by:
Lovius Block
BLOEMFONTEIN
On behalf of the
respondents: Adv. P J T de Wet
Instructed by:
Symington & De Kok
BLOEMFONTEIN
/eb