Nedbank Limited v Wolmarans N.O and Others, Wolmarans N.O and Others v Nedbank Limited (1982/2006, 2150/2006) [2006] ZAFSHC 135 (14 September 2006)

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[2006] ZAFSHC 135
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Nedbank Limited v Wolmarans N.O and Others, Wolmarans N.O and Others v Nedbank Limited (1982/2006, 2150/2006) [2006] ZAFSHC 135 (14 September 2006)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE FREE STATE
PROVINCIAL DIVISION)
Case No.: 1982/2006
In the case between:
NEDBANK
LIMITED
Applicant
and
WOLMARANS, JOHANN
N.O.
1
st
Respondent
FAURE,
ABRAHAM IZAK N.O.
2
nd
Respondent
PHOTO
COPIERS
3
rd
Respondent
THE
DOCUMENT EXCHANGE (EDMS) BPK
4
th
Respondent
AP
PRETORIUS & VENNOTE
5
th
Respondent
THE AFRICAN
NATIONAL CONGRESS,
BLOEMFONTEIN
REGIONAL OFFICE
6
th
Respondent
DIE MINISTER VAN
SPORT, KUNS, KULTUUR
WETENSKAP
& TEGNOLOGIE, VRYSTAAT
PROVINSIE
7
th
Respondent
CAPITEC
BANK BEPERK
8
th
Respondent
HOME
TECH INTERNATIONAL
9
th
Respondent
ROYAL
ATHEM INVESTMENTS 16 (EDMS) BPK
10
th
Respondent
In
re:
Case No.: 2150/2006
J WOLMARANS
N.O.
1
st
Applicant
A
I FAURE N.O.
2
nd
Applicant
ROYAL
ANTHEM INVESTMENTS 16 (PTY) LIMITED
3
rd
Applicant
and
NEDBANK LIMITED
1
st
Respondent
REGISTRAR
OF DEEDS, BLOEMFONTEIN
2
nd
Respondent
______________________________________________________
JUDGMENT:
MILTON, AJ
______________________________________________________
HEARD ON:
15 JUNE 2006
______________________________________________________
DELIVERED ON:
14 SEPTEMBER 2006
______________________________________________________
[1]
INTRODUCTION
1.1 Nedbank Limited,
hereafter referred to as Nedbank, is the applicant in case number
1982/2006 and the 1
st
respondent in case number 2150/2006. Messrs Wolmarans and Faure are
cited as trustees of the Forum Trust II (“the Trust”) and
are 1
st
and 2
nd
respondents, and Royal Anthem Investments 16 (Pty) Ltd (“Royal
Anthem”) cited as 10
th
respondent in the first application. Hereafter refer to as
“Nedbank”, “the Trust” and “Royal Anthem” for the sake of
clarity to avoid confusion.
Respondents 3 to 9,
tenants of the Trust are all cited herein since specific relief is
also sought against them. These respondents
did not however file any
notice of opposition.
Respondents 1, 2 and 10
thereafter lodged an urgent counter application against Nedbank in
case number 2150/2006, Nedbank being
the respondent in that matter.
On the 25
th
May 2006 an interim order was given by agreement applicable to both
cases whereby the tenants of the property of the Trust, were
ordered, in short, to forthwith pay over all rentals directly into
the account of the appellant’s attorney, pending the date
on
which the two applications could be argued.
Nedbank also instituted
action by means of summons in this court under case number
32491/2004 against 1
st
and 2
nd
respondents in their representative capacity of the Forum Trust II
as well as against them in their private capacity and a J
M
Pretorius, for payment of the amount of R4 234 869,28.
[2]
RELIEF
SOUGHT
2.1
Application
1982/2006
Nedbank seeks the
following orders
pendente
lite,
of
the outcome of the action instituted in case number 3249/2004:
2.1.1 An order entitling
them to collect the rentals and other revenues due by the tenants,
respondents 3 to 9 who occupy the property
known as Saambou Building,
Maintland Street, Bloemfontein hereafter referred to as “the
Property” and
2.1.2 A
mandatory order whereby 3
rd
to 9
th
respondents be ordered to pay to the applicant the rentals and other
revenues pursuant to their occupancy of the property.
2.1.3 A
mandatory order whereby applicant may appropriate such rentals to the
indebtedness of the trust.
2.1.4 An
order interdicting the 1
st
,
2
nd
and 10
th
respondents and/or their agents/servants from receiving or collecting
any rental revenue from the 3
rd
to 9
th
respondents or any other occupant.
2.2
Applicant
seeks further mandatory orders namely
:
2.2.1 that 1
st
,
2
nd
and 10
th
respondents’ account to applicant in respect of all rental and
other revenues collected or received by them or any other tenant
in
occupation of the property (including 3
rd
to 9
th
respondents) after 1 January 2006 and to pay such rentals and
revenues forthwith over to the applicant.
2.2.2 That
1
st
,
2
nd
and 10
th
respondent furnish applicant with copies of all leases entered into
by the tenants in occupation (including 3
rd
to 9
th
respondents).
2.2.3 Condonation
be granted for the con-compliance of the rules relating to the
service and time periods.
2.3
Application
2150/2006
2.3.1 In the counter
application herein the respondents 1, 2 and 10 as the applicants seek
on an urgent basis the following mandatory
orders:
2.3.1.1 whereby Nedbank’s
attorney be ordered to prepare all documents to cancel the three
bonds registered in favour of Nedbank
and pertaining to the Saambou
Building loan.
2.3.2.2 whereby
Nedbank be ordered, within 15 days of receiving the order to sign all
documents to cancel the said mortgage bonds,
in absence whereof the
Registrar be ordered to do so on their behalf;
2.3.2.3 whereby
Nedbank be ordered to see to it that all the necessary documents etc.
be lodged, at the offices of the Registrar to
effect transfer of the
property into the name of the 10
th
respondent, (Royal Anthem).
[3] The issue in case
1982/2006 is whether Nedbank is entitled to all the interim relief
set out above, the main object being to enforce
the receipt of the
rental income in terms of the cession contained in the mortgage
documents, pending the finalisation of the main
action in 3249/2004,
instituted against the present registered owner, the Forum Trust II.
[4] The issue in case
number 2150/2006 is whether the Trust and Royal Anthem is entitled to
an order directing Nedbank to consent
to cancellation of the mortgage
bonds in terms of Nedbank and to do whatever ancillary steps
necessary to achieve the transfer of
the property into the Trust’s
name.
[5]
COMMON
CAUSE
5.1 The Forum Trust II
(the Trust) represented by 1
st
and 2
nd
respondents in their capacity as trustees, is the registered owner of
the immovable property, remaining extent of erf 24898, Bloemfontein,
situated at the Saambou Building (the property).
Three agreements of
loan were concluded between Nedbank and the Trust for the
advancement of certain amounts of money. The total
amount due and
owing on 1 January 2006 was R4 585 236,57 the amounts having been
advanced between December 1994 and in 1996.
Three mortgage bonds
were registered in favour of Nedbank, namely B19407/94, B19408/94
and B16353/1996 respectively, as security
thereof.
That the Trust breached
its obligations in terms of its agreements with Nedbank as far back
as March 2002 and fell into arrears
with the instalments payable.
Between 2002 and
January 2006 various attempts ensued to negotiate a settlement
which entailed various purchase agreements whereby
the 10
th
respondent would purchase the said property. I do not deem it
necessary to expand on the detail of each settlement agreement.
Needless to say, the
various agreements which were all dependant on the sale of the
property but were not successful, one of the
reasons being that the
Trust owed a substantial amount to the local authority for
outstanding rates and taxes and services and
a clearance
certificate for the transfer of the property could not be obtained
for purposes of the transfer.
5.6 Eventually an
agreement was concluded on the 24
th
January 2006 after roundtable discussions between the representatives
of the Trust and the applicant. The discussions were followed
with
written letters of confirmation, “JMV6” and “JMV7” to the
founding affidavit. JMV6, a letter from applicant’s attorney
specifically contained conditions for the settlement to be
successful:
5.6.1 The outstanding
loans were to be settled for the amount of R1,8 million (the letter
incorrectly reflects R1,4 million) for
cancellation of the first
bond, B16353/96.
5.6.2 The
amount is specifically accepted on condition
payment
be receive by Messrs Honey & Partners on or before the 28
th
February 2006.
5.7 That Messrs Honey &
Partners requested the original title deed and bond documents on the
26
th
January 2006 to enable them to attend to the cancellation of the
bonds and simultaneously the registration of the property in 10
th
respondent’s name.
5.8 That Messrs Krohn on
behalf of the Trust and 10
th
respondent requested a copy of the title deed to enable their office
to attend to the transfer on the 26 January 2006, 8 February
2006, 17
February 2006 and 21 February 2006 (“AI”, “AC”, “AM” and
“AN” to the replying affidavit). No reply was
ever received from
Messrs Honey.
5.9 The applicant did not
receive payment on or before the 28
th
February 2006.
5.10 The copies of the
guarantee were delivered by the Trust to Nedbank’s attorneys on the
28
th
February 2006 and the original on the 3
rd
March 2006 in respect of B19407/94 and B16353/1996 and B19408/94.
5.11 That Nedbank’s
attorney indicated to Messrs Honey that their mandate to continue
with the settlement arrangement was being
cancelled and this on the
23
rd
February 2006 seemingly prematurely (“AQ1” and “AQ2” to the
replying affidavit).
5.12 The mortgage bonds
relevant hereto both contain an identical clause 13 which makes
provision that the mortgagor cedes his rights,
title and interest in
all the rents and other revenues that may accrue from the property to
the bank (Nedbank). This is an additional
security for any amount
claimable by the bank and may not be acted on without consent of the
mortgagor if the mortgager has complied
with the bond conditions.
However, should the mortgagor be in default – the bank may act
immediately to receive rent etc.
5.13 During 2002 when
the 1
st
and 2
nd
respondents were in default, the applicant acted in terms of clause
13, instructed attorneys to collect the rentals.
5.14 During 2005 more
tenants occupied the building and letters were also written to them
in an attempt to also receive their rental
payments. Later a further
letter was sent during March 2006. These tenants did not react.
5.15 Payments received
were not sufficient to service the bond payments and the Trust made
no payments either.
5.16 Applicant in the
absence of receiving lease payments - advised the tenants in
writing that action would be taken against them.
5.17 Respondents
thereafter demanded in writing that the applicant cease to demand and
collect rentals from the tenants and the respondent
instructed an
attorney firm to also inform the tenants that they were not obliged
to make the payments to the applicant and that
they must make all
payments to Royal Anthem Investments in terms of their lease
agreements.
5.18 After the above
letters only 8
th
and 9
th
respondents paid over the monthly rentals to the applicant. The
applicant thereafter brought the urgent application seeking the
relief set out above. Some two weeks later the Trust, Royal Anthem,
brought an urgent counter application as set out above.
LEGAL POSITION
[6] It is clear that only
one of the applications can be successful. Nedbank is seeking
interim relief pending the outcome of their
action instituted for the
recovery of the outstanding amount due and owing as opposed to the
Trust and Royal Anthem that seek a final
mandatory relief to enable
them to cancel the present registered bonds of Nedbank and transfer
the property to the purchaser.
[7] Although the Uniform
Rules do not make substantive provision for a rule
nisi
order, it has in certain circumstances become part of our procedural
law especially in matters that are urgent and afford interim
relief
into protect rights and interests.
[8] For Nedbank to be
successful in their interlocutory application 1982/2006, they must
convince the Court, that the four prerequisites
have been be proved
namely:
8.1 A
prima
facie
right although “open to some doubt”. See
KNOX
D’ARCY LTD AND OTHER v JAMIESON AND OTHERS
1995 (2) SA 579
(WLD) on 593 F – G, and
KNOX
D’ARCY LTD AND OTHERS V JAMIESON AND OTHERS
[1996] ZASCA 58
;
1996 (4) SA 348
(AD).
A well granted
apprehension of irreparable harm – The test is objective and a
decision made if a reasonable man on the facts
would possibly
suffer harm. See
MCILONGO
NO v MINISTER OF LAW AND ORDER AND OTHERS
1990 (4) SA 181
(EDD) on 185 C and 185 G.
The balance of
convenience – See
VAN
DEN BERG v OVS LANDBOU INGENIEURS (EDMS) BPK
1956 (4) SA 391
(OPD) on 399 G:
¡°... moet die Hof, nadat hy die nadeel of skade wat die appellant
mag ly deur die weiering van die gevraagde interdik opgeweeg
het teen
die nadeel of skade wat aan die respondent besorg mag word deur die
toestaan daarvan, oortuig wees dat die aangevoerde getuienis
voldoende en sterk genoeg is om die gevraagde interdik te regverdig
.”
This implies that the
stronger the chances of success, the less necessary that the balance
must favour the applicant and
visa
versa
.
See
NKWANYANA
v SOUTH AFRICAN BANTU FOOTBALL ASSOCIATION AND OTHERS
1972 (4) SA 309
op 315 C (D and CLD).
8.4 No alternative remedy
- This presumes that the applicant will be in a helpless position
if the interdict is not granted. See
VAN
NIEKERK v VAN RENSBURG
1959 (2) SA 185
(FPA) on 187 A.
[9] The court has a wide
discretion in applying the abovementioned prerequisites which must be
considered judicially and on the facts
of each matter.
[10] A final order as
sought by the Trust and Royal Anthem as different prerequisites,
being:
10.1 A clear right -
whether a right is clear is a matter of evidence and must be proved
on a balance of probabilities, facts which
in terms of substantive
law establish the right relied on. See
DIEPSLOOT
RESIDENTS AND LANDOWNERS ASSOCIATION AND OTHERS v ADMINISTRATOR
TRANSVAAL, AND OTHERS
1993 (3) SA 49
(TPD) on 61B and
FREE
STATE GOLD AREAS LTD v MERRIESPUIT (ORANGE FREE STATE) GOLD MINING CO
LTD AND ANOTHER
1961 (2) SA (WLD) 524 C – D.
10.2 An injury actually
committed or reasonably apprehended – The test is also objective
and the evaluation is on the facts of whether
the applicant can
establish on a balance of probabilities if injury will follow. See
NESTOR
AND OTHERS v MINISTER OF POLICE AND OTHERS
1984 (4) SA 230
(SWA) on 244.
10.3 No alternative
remedy – This supposes that the alternative remedy must be:
10.3.1 adequate;
10.3.2 ordinary
and reasonable;
10.3.3 a
legal remedy;
10.3.4 afford
similar protection: See
LAW
SA, Volume II, Re-issue, paragraph 312.
[11]
URGENCY
11.1 In considering an
application in terms of Rule 6(12) the court must ask itself what
damages, if any, the applicant will suffer
if it is to wait for a
trial in the ordinary course of litigation and the urgent application
is not granted.
On the 25
th
May 2006 the parties by agreement assented to an interim interdict
being granted on case 1982/2006. It is my humble opinion
that the
respondents, the Trust and Royal Anthem conceded that Nedbank was
entitled to bring an application on an urgent basis
when they
conceded to the interim order, and the question is whether the
Trust and Royal Anthem were entitled to bring an urgent
application
or whether both applications were tainted with self-imposed
urgency. The question of urgency will be dealt with
herein under
application to the facts.
[12]
APPLICATION
TO THE FACTS
12.1 I have carefully
evaluated the facts placed before the court, some of which was
extensive and burdened the applications unnecessarily.
Neither party
attempted to be concise in their pleadings, nor in their arguments.
[13] Nedbank has brought
an interlocutory application only seeking interim relief pending the
finalisation of their action for the
recovery of an amount due and
owing and for which they hold security in the form of mortgage bonds.
This action has already been
instituted. The Trust and Royal Anthem
deny that Nedbank is entitled to collect the rentals since they aver
that they have a binding
agreement whereby Nedbank agreed to accept
an amount in full and final settlement for the outstanding amount due
and owing.
[14] In light of the
above the Trust and Royal Anthem brought their application under case
number 2150/2006 on an urgent basis to
counter Nedbank’s interim
requests and seek final relief. This can only be granted if there is
no dispute of the facts. A dispute
arises when one party denies
material allegations and the applicants can produce positive evidence
to the contrary.
It is accepted that final
interdicts should only be granted in motion proceedings if the facts
stated by the respondents together
with the admitted facts in the
application affidavits justify such an order. See
PLASCON-EVANS
PAINTS LTD v VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
(AD) on 634 I where the following was said:
¡°In certain instances the denial by respondent of a fact alleged
by the applicant may not be such as to raise a real, genuine
or
bona
fide
dispute of fact....”
and in
SOFFIANTINI
v MOULD
1956 (4) SA 150
(EDCD) on 154 G – H:
¡°It is necessary to make a robust, common-sense approach to a
dispute on motion as otherwise the effective functioning of the
Court
can be hamstrung and circumvented by the most simple and blatant
stratagem. The Court must not hesitate to decide an issue
of fact on
affidavit merely because it may be difficult to do so. Justice can be
defeated or seriously impeded and delayed by an
over-fastidious
approach to a dispute raised in affidavits.”
The applications will
therefore be evaluated separately with particular regard to the
question if each applicant has succeeding in
proving on a balance of
probabilities that they are entitled to the relief sought.
[15] Nedbank on an
interim interdict only has to prove a
prima
facie
right. However, I am convinced that Nedbank, applicants in case
1982/2006 has a real right, since they have registered mortgage
bonds
over the said property of the Trust in their favour and have certain
rights that flow therefrom should the mortgagor be in
default.
[16]
“A
real right is a thing conferring on the holder of the right an
exclusive benefit in the thing; ie the benefit is indefeasible
legally by any other person.”
and
“Mortgage
is the right that one person has in the property of another which
serves to secure an obligation.”
and
“
The essence of the right which the
mortgagor obtains is to retain his hold or security over the property
until the obligation is discharged
and if the obligation is not
discharged when due, to have the property sold and to recover the
amount due to him form the proceeds
of the sale of the property.”
See
Dale
Hutchinson and Others: WILLES PRINCIPLES OF SOUTH AFRICAN LAW,
8
th
Edition on page 249 and 334 respectively.
[17] The Trust and Royal
Anthem on the other hand base their application on an agreement
concluded on the 24
th
January 2006 whereby by an amount of R1 800 000 would be paid in full
and final settlement and that this contract was still binding.

However he settlement was clearly made subject thereto that the said
amount had to
be
paid
on
or before the 28
th
February 2006, to Nedbank’s attorneys (See “JMV6” of the
Nedbank’s founding affidavit).
[18] The Trust’s
argument is that they delivered their guarantee on the 28
th
February 2006 and that the guarantee is equivalent to payment and
therefore did not breach the agreement. Nedbank’s denies
specifically
that the condition of payment was met. It is Nedbank’s
case additional thereto that the settlement reached on the 24
th
February 2006 was not subject to a bond being registered from whence
the finances would be forthcoming. I cannot believe that Nedbank
believed that the finances would not be forthcoming and financed from
the sale of the property when transactions in the normal course
of
registration would take place simultaneously. The Trust would not be
able to raise such funds without a buyer, who if he would
not be
paying cash, would have to apply for a bond. It is accepted that the
sale transaction had nothing to do with Nedbank since
they were not
the sellers but from the negotiations over the years with Nedbank
they were aware that the only way to release the
liability due and
owing to them was by selling the property and that guarantees would
have to be delivered. The attorneys of the
Trust indicated that
registration would most probably take place at the end of February
2006, which coincides with the last date
determined by Nedbank. I
think it would suffice to say that both parties knew and understood
that the transaction would be completed
by 28
th
February 2006 and that the funds would be forthcoming from the sale.
[19] Nedbank’s letter
is however, quiet clear and stated in unequivocal language, and to be
understood by the ordinary reader.
This condition was never queried
by the Trust, in fact they confirm as previously mentioned that
registration will take place before
or on the 28
th
February 2006. They were aware that the date played a role.
[20] They however did not
make any arrangements for postponements or an indulgence when they
realised that registration would not
take place for two reasons:
They were still
negotiating with the municipality for the outstanding rates and
taxes etc.
Mr Krohn, the Trust’s
and Royal Anthem’s attorney had not received a copy of the title
deed timeously. The Trust and Royal
Anthem gave a long account of
the request for the title deed from Nedbank and that the requests
were ignored. As a result of
Nedbank not supplying the original
title deed, the transaction could not be registered before 28
February 2006 and that in fact
instituted repudiation of the
contract. It is quite clear from the pleadings before this court
that nowhere was the original
title deed requested by the
respondents and it is further common knowledge that a copy was only
needed to draw up the transfer
documents. A copy could be obtained
from the deeds office which is in fact exactly what the
respondent’s attorney eventually
accomplished, albeit at a very
late stage.
[21] With the knowledge
that the payment was to be financed from the sale of the property,
and that the last date for payment was
28 February 2006, respondents
and/or their attorneys did not request extension or attempt to
negotiate another date for performance.
It is however doubtful if
the conduct of Mr. Khron, the respondent’s attorney had any bearing
on the fact that payment could not
be affected on the 28
th
February 2006.
The bank only issued
guarantees on the 22
nd
February 2006 and a copy delivered to the applicant’s attorney on
the 28
th
February 2006, clearly not payment and clearly not in time to
register the transaction before 28
th
February 2006.
[22] It is respondent’s
contention that a guarantee is as good as payment. This can only be
if the guarantee is unconditional.
The guarantees herein “AR3-4”
and “AR5-6” contain the normal conditions but an additional
condition features, namely that
copies of the lease agreements with a
gross income of R158, 674 be received by the bank (ABSA in this
instant). Specific provision
is also made that the bank reserves the
right to withdraw the guarantees, for reasons set out therein. These
guarantees are clearly
then not unconditional.
[23] The Trust and Royal
Anthem also averred that their attorneys were not informed which
attorney on behalf of Nedbank was to deal
with the cancellation
transaction further delaying the registration process. This is also
not true. During the negotiation period,
Mnr. Van Zyl on behalf of
Nedbank, informed the Trust’s attorney on more than one occasion
that Mr. Saffey of their offices would
be attending thereto. See
“JMV6” and “JMV7”.
[24]
DISPUTES
The
parties are in dispute regarding the contents of the agreement
reached on the 24
th
January 2006, specifically regarding the furnishing of the title
deed. I am of opinion that the furnishing of the title deed or
copy
thereof is not a valid excuse for the Trust’s non-performance,
since a copy could easily have been obtained from the Deeds
Office
timeously. It was only necessary to obtain a copy so that the
documents could be drawn, which could and should have been
done prior
to the bank guarantees being made available.
[25] There was also the
added problem of the outstanding municipal rates etc that had to be
paid and negotiations with the municipality
were not yet completed.
It is common cause that the finalisation thereof took some time, and
that the transfer would not then be
registered in time to affect
payment. This all happened on the “side” of the Trust and cannot
be interpreted as Nedbank’s
“unequivocal intention to no longer
be bound”. See
STREET
v DUBLIN
1961 (2) SA 4
(WLD) on 10 B and see also
VAN
ROOYEN v MINISTER VAN OPENBARE WERKE
1978 (2) SA on 835 on 846 A.
[26] There is a further
dispute if whether bond re-payments of R18 500 were made monthly
pending the final registration. The Trust
is of opinion that this
condition only applied to the previous agreement during October 2005,
and that payments did not have to be
made after the agreement was
reached.
[27] Trust avers further
that they were willing and entitled to continue with the contract.
[28] There are various
differences regarding the actual agreement reached on the 24
th
January 2006 specifically what was said or not said by the various
representing attorneys.
[29] A further confusion
arises when Nedbank gives written instructions to Honey to close
their file on the 23
rd
February 2006 and inform the Trust that the full amount outstanding
must be immediately recovered. This instruction was most certainly
premature, however, it is doubtful if it had any bearing on the non
performance of the contract. As I commented in court, Nedbank
probably realised (albeit prematurely) that the Trust would not be
able to affect payment before the 28
th
February 2006, hence their instruction. This cannot be construed as
repudiation since the Trust would still be entitled to perform
until
the 28
th
February 2006 if it was at all possible. Nedbank gives no
explanation for their seemingly hasty action.
[30] It is the Trust’s
case that the agreement reached on the 24
th
January 2006 is still valid and that they, as owners have already
entered into an agreement, with a third party, to enter into
subleases
with all the tenants in the building and therefore they
were entitled to inform and threaten the tenants that all payments
must be
made to their agent (Royal Anthem).
30.1 There can be no
doubt that Nedbank as applicant has established not only a
prima
facie
right, but a real right. There are registered mortgage bonds in
favour of Nedbank which serves as security for monies lent and
advanced.
Further that the Trust
was in arrears as far back as 2002 and that various attempts and
agreements had been unsuccessful to settle
the outstanding amount.
That in terms of clause
13 of the mortgage bonds, the mortgagor gave a cession of rentals
and other revenues which may accrue
from the mortgaged property to
the mortgagee in the event that the mortgagor (the Trust) does not
comply with the conditions
of the bond.
Nedbank duly insisted
on receiving these payments from the tenants to curb their losses
regarding monthly bond repayments that
were not being met by the
Trust. The mortgagor’s consent is not required when conditions
have not be complied with and it
is common cause that the
conditions were not complied with.
[31] The Trust and Royal
Anthem on the other hand, are of opinion that the agreement to settle
the amount is valid since delivery
of the guarantees is as good as
receiving and this agreement must take payment preference over the
real right of Nedbank. The contract
must be enforced hence the
prayers for a final order against Nedbank.
[32] For the Trust and
Royal Anthem to be successful they must be able to prove that they
have a clear right on the facts before this
court. If it is clear
that the applicants cannot prove a clear right or even on
prima
facie
right since there are serious disputes regarding their allegations
and
prima
facie
it would appear that the agreement has lapsed on the 28
th
February 2006.
[33] I do not deem it
necessary to refer the matter for oral evidence. Nedbank has in case
1982/2006 established facts that have
been confirmed not only by
documentation annexed to the respective parties’ affidavits but
have been admitted or confirmed by the
respondents (Trust and
Anthem).
34.1 It is common cause
that the Trust has been
in
mora
for a period that stretches from 2002 until the institution of the
applicants and that the Trust, in spite of arrangements that interim
payments must be made on the loan account, did not adhere to the
conditions. In addition to this, the municipal rates and taxes
of
the property also reflected on astronomical arrears which were part
of the Trust’s problem to expedite the registration of the
agreement of sale.
34.2 It has been
contended that the irreparable harm that Nedbank will suffer if they
do not collect the rentals, will be insurmountable
and unrecoverable.
According to the letter sent from Nedbank’s attorney on the 7
th
March 2006 (“AT3”) the outstanding loan reflected an outstanding
amount of R4, 360 000,00 which they called up when the Trust
could
not affect payment on the 28
th
February 2006.
34.3 Should Nedbank be
entitled to collect and receive the rentals from the tenants, and
thereafter make payments on the bond account,
they would be able to
curb their damage. It was further argued that the outstanding loan
is escalating daily and that it is doubtful
if the commercial value
of the property will at all be sufficient to protect their rights,
should the bond be called up. Any interim
payment will be utilised
in reducing the outstanding loan and escalating interest.
35.1 Mnr. Van Rhyn, on
behalf of the Trust, argued that the cession of the lease amount
granted by the Trust in favour of Nedbank
has not been granted by the
present lessor, the purchaser, and cannot be enforced against them.
This argument is truly not understood.
How can a purchaser, who is
not yet the registered owner, have more rights than Nedbank who
presently holds registered real rights
and interest in the said
property? Besides, no lease contracts were produced at any stage
during the proceedings and attached to
the respondent’s replying
affidavits which were also a specific requirement and condition of
the guarantee issued by Absa.
35.2 Nedbank, while the
bonds are still registered in their favour can and should enforce
their rights against the lessees. The court
in any case accepts that
the entity collecting the rentals was appointed as an agent by the
Trust, operating as such in the Trust’s
interest.
35.3 It is not sure what
the Trust and/or its agent have done with the money previously
collected by the tenants i.e. from January
2006 until the interim
order of 25 May 2006. Since the Trust has been
in
mora
for more that 4 years. There is no doubt they have suffered harm and
will do so if the interim order is not granted.
36.1 Nedbank’s argument
is that the balance of convenience favours them stronger than the
Trust. If the interim relief is refused,
they will suffer harm as
discussed above. They also tender to pay whatever damages the Trust
may suffer in the event that Nedbank
is not successful with their
action instituted. They have also undertaken to utilise the tenant’s
lease amount to service the
loan account, municipal rates and taxes
etc.
36.2 No prejudice will
therefore be suffered by the Trust. The only disadvantage that the
Trust will suffer is that it will have
no control over the tenants
payment which is an income and not have an income to pay the rates
and taxes which is the responsibility
of the owner of the immovable
property only in the event that the applicant Nedbank pays these
services the respondents will suffer
no damages.
[37] The Trust put
forward an argument that the instability and “tug of war” between
Nedbank and the Trust regarding to whom the
tenants must make
payments is disruptive and it is afraid that the tenants are going to
cancel their contracts which will be financially
harmful. I cannot
agree with this argument. A tenant has no rights to the property
except a right of occupation on condition he
pays his contracted
lease amount. What would it matter to whom the amount is to be paid,
as long he is in possession of unimpeded
occupation of the premises.
In fact the tenants, seemingly under the influence of the 10
th
respondent, Royal Anthem, exacerbated Nedbank’s position making it
necessary to bring the application on an urgent basis.
[38] I am satisfied that
the applicant (Nedbank) in case 1982/2006, had in the circumstances
to curb damages no other recourse than
to bring this urgent
application. The Trust has for four years struggled to make payments
or settle the matter in spite of various
attempts and indulgences.
Nedbank attempted without the intervention of a court to extract
payment from the tenants in accordance
with there real registered
right, however to no avail, forcing them to eventually vent
themselves to court with an urgent application.
Nedbank has already
instituted action for the recovery of the outstanding amounts, but it
is common knowledge that litigation in
the High Court is sometimes
cumbersome and at times lengthy and protracted. The applicant will
be helpless during this time and
not have the benefit of the tenant’s
payments with which to reduce the loan. It is also not clear how the
Trust and/or Royal Anthem
has dealt with the funds up and till this
application. Applicant only become aware Royal Anthem’s
involvement after a letter
was received on the 1 April 2006.
The Trust on the other
hand was aware of the tenants being approached for the payments by
Nedbank. They were also aware as previously
stated above that the
agreement confirmed in “JMV6” categorically stated that
payment
was to be received on the 28
th
February 2006. With their prior knowledge of all the difficulties
facing timeous registration, they did not ask for extention,
and in
spite of them being in possession of letters from Nedbank’s
attorney that they may not collect the rentals, they do
not deem it
necessary to bring an application. Only after Nedbank instituted
action, and only somewhat two weeks later, did
the Trust bring an
urgent counter application.
Taking all the criteria
into account in determining whether these application should be
treated as urgent in terms of Rule 6(12)
or not, prejudice to be
suffered by Nedbank whilst waiting for a hearing in the ordinary
course, and the prejudice that the respondent
might suffer by an
abridgement of the prescribed times have been weighed up. By
consent parties conceded by requesting the interim
order on 29 May
2006 that there was urgency to receive the income for payment of
the various obligations, being certainly
ad
idem re
the urgency of Nedbank’s position. I have already indicated that
had the parties not agreed to an interim order, I would have
at
that stage obliged the applicant taking into regard the prejudice
suffered.
38.4 The respondents were
aware since early March that Nedbank was of opinion that the
agreement had lapsed and were not going to
give any further extension
for payment. Why did the Trust not bring the application immediately
thereafter? I firstly find no merits
in their grounds for urgency
and secondly it is obvious that their application is being disputed
factually by Nedbank and final relief
cannot be given.
[39] The application
2150/2006 is therefore dismissed with costs.
[40] Before
the final order is given, I intend amending paragraph 4 of the
applicant’s amended notice of motion to read as follows:
“
Directing that the applicant shall
appropriate such rentals to the indebtedness of the Trust pending the
outcome of the action instituted
against the Forum Trust II (“The
Trust”), under case number 3249/2004 in the above Honourable Court
(“The Action”), subject
to the undertaking of the applicant
contained in paragraphs 86, 87 and 88 of the founding affidavit.”
[41] An order is then
granted in terms of prayers 1, 2, 3, 4 as amended 5, 6, 7, 8 and 9 of
the amended notice of motion.
______________
D. MILTON, AJ
On
behalf of the Applicants: Adv. L. Wepener SC en
J. J. F. Hefer
Instructed by:
Symington & De Kok
BLOEMFONTEIN
On
behalf of the Respondents: Adv. A. J. R. Rhyn SC en
C. Snyman
Instructed by:
Krohn & Kie
BLOEMFONTEIN
/em