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[2001] ZAWCHC 1
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FHP Managers (PTY) Ltd v Theron N.O. and Others (13608/98) [2001] ZAWCHC 1 (13 July 2001)
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Certain
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IN THE HIGH COURT OF
SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION
)
CASE NO:
13608/98
In
the matter between:
FHP
MANAGERS (PTY) LTD
Applicant
and
THERON
N.O., SHANDO
1st Respondent
THERON
N.O., FRANS JACOBUS SMIT
2nd Respondent
THERON,
FRANS JACOBUS SMIT
3rd Respondent
JUDGMENT:
VAN REENEN, J:
This is an opposed
application in terms of Supreme Court Rule 49(11) which provides as
follows:
“
Where
an appeal has been noted or an application for leave to appeal
against or to rescind, correct, review, or vary any order of
court
has been made, the operation and execution of the order in question
shall be suspended, pending the decision of such appeal
or
application, unless the court which gave such order on the
application of a party, otherwise directs.”
In terms of a written
agreement of sale entered into on 29 May 1998, the applicant sold
Section No 11 in a sectional title scheme
known as H[...] I[...]
[...] Two (the premises) to the AS and R Children’s
Family Trust (the trust) represented
by Mr Frans Jacobus Smit
Theron (hereinafter referred to as 2nd/3rd respondent), in
his capacity as trustee, for an
amount of R680 000.
2nd/3rd Respondent in his personal capacity bound himself to the
applicant as surety and co-principal
debtor for the due fulfilment by
the trust of its obligations under the Agreement of Sale.
Pursuant to the terms of
the Agreement of Sale the trust paid the applicant a deposit of R34
000; R10 000 in respect of certain
movables; and occupational
interest in an amount of R14667 for the period 11 May 1998 until 31
August 1998. The trust also
paid an amount of R9372,60 in
respect of transfer costs.
The trust took occupation
of the premises on 11 May 1998. 2nd/3rd Respondent has
occupied the property since that date
and still does so.
As the trust failed to
take transfer of the premises the applicant instituted opposed motion
proceedings against it out of this
court with a view to enforcing the
terms of the agreement of sale. The matter was argued on 1 June
2000 before Duminy AJ
who on 7 August 2000 granted judgment in favour
of the applicant in the following terms:
“
47.1
The trustees of the A S and R Children Family Trust (“the
trust”) are directed to deliver to the offices
of the
applicant’s attorneys, Feinsteins, of […]
Floor,
The A[...], 4[…] S[...] Avenue, Milpark, Johannesburg, within
a period of 7 (seven) days after the grant of this Order,
a bank
guarantee required in terms of clause 4.1.2 of annexure “SS(4)”
to the applicant’s founding affidavit
in the sum of R646 000
(six hundred and forty six thousand rand), payable to Feinsteins as
against registration of transfer in
favour of the trustees of certain
immovable property comprising Section 11, as described on Sectional
Plan no. SS 1[...] in the
scheme known as
H[...] I[...] [...], together with an undivided share in the common
property in the aforesaid Scheme and an exclusive
use area described
as Parking Bay number P[...] (“the property”);
47.2
Failing compliance with the preceding
paragraph the said trustees and the third respondent, jointly and
severally with them are
directed to make payment to the applicant in
the sum of R646 000;
47.3
The said trustees are directed to sign all
documents which are required for purposes of registration of transfer
of the property
to them, within a period of 7 (seven) days after the
grant of this Order, failing which, the Sheriff of this Court or his
lawful
Deputy is authorised and directed to sign all documents and
take all steps that may be required for the transfer of the property,
in the name and stead of the trustees and at their cost;
47.4
The said trustees and third respondent,
jointly and severally with them, are directed to effect payment to
the applicant of the
sum of R129,80 per day from 1 September 1998 to
date of registration of transfer of the property in favour of the
trustees;
47.5
The said trustees and the third respondent
jointly and severally with them, are directed to pay the costs of
this application, the
one paying the other to be absolved pro tanto.”
Leave to appeal against
the above order was sought but refused by the learned Judge.
The Chief Justice, on petition, granted
leave to appeal to a Full
Bench of this Division.
A notice of appeal was
timeously filed. The notice of appeal assails the validity of
the Agreement of Sale on the basis that
due to the fact that
2nd/3rd Respondent was an unrehabilitated insolvent he was
disqualified to act as a trustee of
the trust and therefore unable to
enter into an enforceable agreement of sale and furthermore, that he
was not properly authorised
to have represented the trust as the
special resolution that authorised him to do so was signed by him
only and not also by him
and his co-trustee Mr Shando Theron the
1st respondent herein.
The noting of the appeal
automatically suspended execution of the judgment of Duminy AJ so
that execution thereof cannot be levied
without the leave of this
court.
The applicant seeks the
following relief in this application:
“
1.
Granting the Applicant leave to execute against the First, Second and
Third Respondents,
the order referred to in paragraph 47.4 of the
written judgment of his Lordship Mr Acting Justice Duminy which was
delivered in
the above Honourable court on the 7
th
of
August 2000 in Case No. 3608/98 between the parties in terms of Rule
49(11) of the Uniform Rules of the High Court. A copy
of the
said judgment is annexed to the founding affidavit marked
“SS2”;
2.
That in terms of Rule 49(12), unless the
above Honourable Court so orders, that prior to such execution the
Applicant be ordered
to enter into such security as the parties may
agree or the Registrar of the above Honourable Court may decide, for
the restitution
of any sum obtained upon such execution and that the
Registrar’s decision shall be final in terms of the aforesaid
rule of
court;
3.
That the costs occasioned by this
application be costs in the cause of the pending appeal to the Full
Bench of the above Honourable
Court;
4.
other and/or alternative relief.”
The applicant seeks leave
to execute only that part of the order that relates to the payment of
occupational interest at R129,80
per day from 1 September 1998 to the
date on which the premises are transferred into the trust’s
name. The amount that
has accrued as at 31 March 2001, assuming
that the Agreement of Sale is enforceable, is R12 241,40. The
applicant also claims
interest in an amount of R25296,29. That
claim is being disputed.
I shall for purposes of
this judgment assume, without deciding, that it is permissible in
terms of Rule 49(11) for a court to direct
that execution may be
levied in respect of only part and not the whole of an order granted
by it.
The criteria applicable
to an application of this nature have been fully set out by Corbett
JA (as he then was) in
South Cape Corporation (Pty) Ltd
v Engineering Management Services (Pty) Ltd
1977(3)
SA 534 (A) at 545 B – 546 C and do not necessitate repetition.
The purpose of the rule regarding the
automatic suspension of a
judgment as soon as an appeal has been lodged, is to prevent
irreversible harm to an intending
appellant in the event of the
appeal succeeding. A court has a wide general discretion, based
on what is just and equitable
in the circumstances of a particular
case, to decide whether or not execution should be permitted to be
proceeded with. A
court may furthermore determine the
conditions upon which any right to execute pending an appeal should
be exercised. It
should be borne in mind that the four factors
enumerated in the
South Cape Corporation
case at 545 E –
G do not constitute a
numerus clausus
, but are merely factors
that should ordinarily be taken into consideration by a court in
exercising its discretion. It was
held in the
South Cape
Corporation
case that the onus to show the existence of special
circumstances justifying execution pending an appeal rests on the
applicant
irrespective of whether the judgment is one
ad pecuniam
solvendam
or
ad factum praestandum
.
In my view the applicant
has failed to show that it will suffer irreparable harm or prejudice
should leave to execute be refused.
All that is likely to
happen is that the applicant’s claim against the trust would
have escalated by a further approximately
R27000 by the time the
appeal is heard in January/February 2002. Depending on whether
the appeal succeeds or not the applicant
will be able to recover all
amounts payable in respect of occupational interests
ex
contractu
or an appropriate amount of money in respect of the
trust’s occupation of the premises based on another legal
causa.
As regards the trust’s
ability to pay any amounts it may be liable for in respect of its
occupation of the premises, the highwater
mark of the applicant’s
case is that it verily believes that the respondents may not be able
to pay it the amount which it
is entitled to. Despite the fact
that those averments have not been specifically denied, they are of
doubtful evidentiary
value in that they constitute inferences and
conclusions unsupported by the primary facts on which they are based.
(See:
Bezuidenhout v Otto and Others
1996(3) SA 339 (W) at 344 J – 345 E). Despite their
doubtful evidentiary value the said averments, in my view,
are
sufficient to dispel the prima facie inference that the providing of
security
de restituendo
would protect the appellant against
irreparable harm or prejudice and obviate the need on the part of the
trust to adduce evidence
to the existence of special circumstances
(See:
South Cape Corporation
case at 548 D – G).
As the reason for the
automatic suspension of a judgment as soon as an appeal is noted, is
the avoidance of irreparable harm or
prejudice to the intended
appellant, a court considering an application in terms of Rule 49(11)
should have regard to whether the
status quo ante
could be
restored in the event of the appeal being upheld (See:
Kalahari Salt Works (Pty) Ltd and Another v Bonne
Fortune Beleggings Bpk
1973(4) SA 471 (NC) at 476 H –
477 C). In the case of a claim sounding in money the mechanism
by which any potentiality
of irreparable harm to an intending
appellant is obviated is to make execution subject to the providing
of security
de restituendo
. That objective is clearly
achievable if the intended appellant is capable of meeting the claim
in full. In the absence
of the ability of meeting the claim in
full, an applicant, unless precluded from doing so by the court’s
order, could proceed
to levy execution against the intended
appellant’s corporeal- and incorporeal movables and also
immovables. It is notionally
possible that an applicant could
attach and sell in execution the intended appellant’s interest
in the pending appeal and
thereby procure the termination of an
appeal that might have merit (See:
Brummer v
Gorfil Brothers Investments (Pty) Ltd en Andere
1999(3) SA
389 (SCA) at 418 B – H). It would also be possible to
resort to the sequestration of the intended
appellant ‘s estate
as a recognised form of execution (See:
Wilkens
v Pieterse
1937 CPD 165
at 170;
Moldenhauer
v De Beer
1959(1) SA 890 (O) at 892 F) and bring the
provisions of
Section 75
of the
Insolvency Act, No 24 of 1936
into
play. On the facts of the instant case, at best for the
applicant, I have been left in doubt that the providing of security
de restituendo
would obviate the potentiality of irreparable
harm or prejudice to the trust should execution of paragraph 47.4 of
the order of
Duminy AJ be permitted.
An extra-ordinary feature
of the litigation between the applicant and the Trust is that
although the upholding of the latter’s
contention will nullify
the legal basis upon which it, and through it 2nd/3rd respondent
may occupy the premises, it has continued
to do so since 11 May 1998.
Thát conduct on the part of the trust is difficult to
reconcile with a
bona fide
intention of seeking a reversal of
the judgment of Duminy AJ and is susceptible of an inference that the
proceedings were opposed
and the appeal lodged for some ulterior
purpose such as to gain time. Any temptation to construe
the trust’s
aforementioned conduct as a barometer of its own
negative perceptions of its chances of success on appeal must however
yield thereto
that the Chief Justice by having granted leave to
appeal on petition took a favourable view of its prospects of success
on appeal.
In view of the aforegoing
I have not been convinced that I should exercise my discretion and
grant the relief claimed in prayer
1 of the Notice of Motion and
accordingly the application is refused, as is the belated request to
order the trust to provide security
for the payment of any amounts
due in respect of occupational interest.
In this matter I have
decided to deviate from the general rule that a substantially
successful party is entitled to his or her costs.
In my view
the trust, by occupying the premises whilst assailing the validity of
the Agreement of Sale in terms of which it originally
became entitled
to do so, without making any payments in respect of occupational
interest, is acting opportunistically and unacceptably.
In
order to signify my disapprobation of the trust’s conduct no
costs order is made.
D. VAN REENEN.