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[2024] ZANCHC 53
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Land and Agricultural Development Bank of South Africa v Steenkamp N.O and Others (1204/2021) [2024] ZANCHC 53 (31 May 2024)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH COURT OF
SOUTH AFRICA
(NORTHERN CAPE
DIVISION, KIMBERLEY)
CASE NO: 1204/2021
Reportable: YES / NO
Circulate to Judges: YES
/ NO
Circulate to Magistrates:
YES / NO
Circulate to Regional
Magistrates: YES / NO
In
the matter between:
THE
LAND AND AGRICULTURAL
DEVELOPMENT
BANK OF SOUTH AFRICA
Applicant
and
JAN
WILLEM CASPARUS STEENKAMP N.O.
First Respondent
CARIN
STEENKAMP N.O.
Second Respondent
JOHANNA
MARIA STEENKAMP
N.O.
Third Respondent
JAN
WILLEM CASPARUS
STEENKAMP
Fourth Respondent
CARIN
STEENKAMP
Fifth Respondent
Heard
on:
18 March 2022
Delivered
on: 31 May 2024
JUDGMENT
RAMAEPADI
AJ
INTRODUCTION
1
The applicant, the Land and Agricultural
Development Bank of South Africa (the Land Bank) has brought an
application against the
Kromdrif Trust (the Trust), represented by
the first, second and third respondents in their capacities as
trustees of the Trust,
and the fourth and fifth respondents. In terms
of the notice of motion dated June 2021, the applicant seeks the
following order:
-
1.1.
Judgment against the Trust, represented by
the first, second and third respondents, and the fourth and fifth
respondents, jointly
and severally, for the sum of R10 887 200.63
(ten million eight hundred and eighty-seven thousand two hundred rand
and sixty-three
cents) plus interest at the rate of 7.50% per annum,
monthly compounded, from 28 February 2021, until date of final
payment;
1.2.
Judgment against the Trust, represented by
the first, second and third respondents, and the fourth and fifth
respondents, jointly
and severally for the sum of R558 606.51 (five
hundred and fifty-eight thousand six hundred and six rand and
fifty-one cents) plus
interest at the rate of 7.50% per annum,
monthly compounded, from 28 February 2021, until date of final
payment.
2
The applicant also seeks an order that the
following immovable properties be declared executable:
2.1.
Remainder of the farm Matjesfontein No. 25
situated in the Karoo Highland Municipality, Sutherland division,
Northern Cape Province,
in extent 4484,8543 hectares and held under
deed of transfer no. T[...] registered in the name of the first,
second and third respondent;
2.2.
Portion 5 (a remainder of Portion 2) of the
farm Matjesfontein No. 25 situated in the Karoo Highland
Municipality, Sutherland division,
Northern Cape Province, in extent
8,2912 hectares and held under deed of transfer no. T[...] registered
in the name of the first,
second and third respondents;
2.2.1.
Remainder of the farm Kleine Fontein No.
886 in the Hantam Municipality, Calvinia division, Northern Cape
Province, in extent 3073,6773
hectares and held under deed of
transfer no. T[...] registered in the name of the fourth respondent;
2.2.2.
Portion 6 (a portion of Portion 2) of the
farm Stinkkuil No. 888 in the Hantam Municipality, Calvinia division,
Northern Cape Province,
in extent 15,9751 hectares and held under
deed of transfer no. T[...] registered in the name of the fourth
respondent;
2.2.3.
Portion 5 (a portion of Portion 4) of the
farm Stinkkuil No. 888 in the Hantam Municipality, Calvinia division,
Northern Cape Province,
in extent 3,4666 hectares and held under deed
of transfer no. T[...] registered in the name of the fourth
respondent;
2.2.4.
Remainder of Portion 1 (Klein Karoo) of the
farm Stinkkuil No. 888 in the Hantam Municipality, Calvinia division,
Northern Cape
Province, in extent 1982,0193 hectares and held under
deed of transfer no. T[...] registered in the name of the fourth
respondent;
2.2.5.
Portion 3 (Blaauw Krans) of the farm
Stinkkuil No. 888 in the Hantam Municipality, Calvinia division,
Northern Cape Province, in
extent 742,3234 hectares and held under
deed of transfer no. T[...] registered in the name of the fourth
respondent;
2.2.6.
Portion 1 of the farm Middelpos No. 887 in
the Hantam Municipality, Calvinia division, Northern Cape Province,
in extent 1051,9974
hectares and held under deed of transfer no.
T[...] in the name of the fourth respondent;
2.2.7.
Portion 2 of the farm Middelpos No. 887 in
the Hantam Municipality, Calvinia division, Northern Cape Province,
in extent 1994,9654
hectares and held under deed of transfer no.
T[...] registered in the name of the fourth respondent.
2.3.
The applicant also seeks an order declaring
that it is entitled to perfect its security in terms of the long-term
loan agreement
and medium-term loan agreement entered into between
the applicant and the Trust and the fourth respondent, as read with
the covering
mortgage bonds registered in favour of the applicant, by
taking any steps it deems necessary to realize the above properties.
2.4.
The applicant also seeks an order directing
the respondents to pay the costs of the application on attorney and
client scale, jointly
and severally.
3
The application is opposed by the first to
fifth respondents. They do so essentially on two grounds.
3.1.
First,
non-compliance with the provisions of Uniform Rule 46A. The
respondents’ contention in this regard is that the applicant
ought to have complied with the provisions of Rule 46A as there are
natural persons resident on the farms listed as security in
the
mortgage bond.
[1]
3.2.
Second,
that the Trust’s performance was rendered impossible or
partially impossible due to
force
majeure
.
In this regard, the respondents refer to the nine years of intense
drought in the Northern Cape, as well as veld fires that occurred
during the summer of 2016/2017, which on the respondents’
version, caused the Trust extreme financial difficulties.
[2]
4
An examination of the pleadings will
immediately reveal that the respondents do not dispute their
indebtedness to the applicant,
the amount of the indebtedness, and
the failure to pay the agreed instalments on the loans. The
respondents’ case as I understand
it, is dependent entirely on
the two defenses set out in sub-paragraphs 3.1 and 3.2. Accordingly,
all that remains of this case,
is a determination of the respondents’
defenses.
5
In the discussion below, I deal with each
of the defenses summarized above. However, before doing so, it is
necessary to set out
a brief background of this matter.
PERTINENT
BACKGROUND
The following background
facts emerge from the pleadings filed off record.
6
The applicant concluded two loan agreements
with the Trust and the first respondent, Jan Willem Casparus
Steenkamp (‘Steenkamp’).
6.1.
First, the long-term loan agreement
concluded on 22 August 2013 at Calvinia, Northern Cape. In concluding
the long-term agreement,
the Trust was represented by Steenkamp in
his capacity as a trustee of the Trust, as well as in his personal
capacity, whereas
the applicant was represented by Helperius Eritzema
Louw and Willem Adriaan Louw. The terms of the long-term loan
agreement relevant
to this case are:
6.1.1.
The applicant advanced the amount of R9 000
000.00 (nine million rand) to the Trust and Steenkamp for purchase of
certain immovable
properties;
6.1.2.
The loan was subject to, inter alia,
registration of the first mortgage bond for the amount of R10 000
000.00 (ten million rand)
and the fifth respondent binding herself as
surety and co-principal debtor in respect to the Trust and
Steenkamp’s indebtedness
to the applicant;
6.1.3.
The loan shall attract interest at the rate
of prime plus 0,5% per annum, calculated daily and compounded
monthly;
6.1.4.
The loan shall be repaid in instalments of
approximately R974 917.39 (nine hundred and seventy-four thousand
nine hundred and seventeen
rand and thirty-nine cents) per annum,
annually in arrears over a period of twenty-five (25) years;
6.1.5.
A certificate signed by an official of the
applicant whose authority need not be proved, setting out the
outstanding balance due
to the applicant shall constitute prima facie
proof of the amount owing by the Trust and Steenkamp to the
applicant;
6.1.6.
In the event of default by the Trust
or Steenkamp, the applicant shall be entitled to claim and recover
from the Trust and Steenkamp
the full outstanding balance due in
terms of the long-term loan agreement, together with interest thereon
at the rate of prime
plus 0,5% per annum;
6.1.7.
The long-term loan agreement can only be
varied in writing and when signed by the parties to the long-term
agreement;
6.1.8.
The Trust and Steenkamp both selected their
domicilium citandi et executandi
at the farm Botuin, Middelpos, Calvinia, Northern Cape;
6.1.9.
The Trust and Steenkamp shall be jointly
and severally liable in terms of the long-term loan agreement to the
applicant.
6.2.
Second, the medium-term loan agreement
concluded between the applicant, represented by Helperius Eritzema
Louw and Willem Adriaan
Louw, and the Trust represented by Steenkamp
as trustee of the Trust, and also in his personal capacity. The terms
of the medium-term
loan agreement relevant to this case are:
6.2.1.
The applicant advanced the amount of R1 000
000.00 (one million rand) to the Trust and Steenkamp for the purchase
of certain movables
and livestock;
6.2.2.
The loan was subject to, inter alia, the
registration of the first covering mortgage bond for the amount of
R10 000 000.00 (ten
million rand) and the fifth respondent binding
herself as surety and co-principal debtor in respect of the Trust and
Steenkamp’s
indebtedness to the applicant;
6.2.3.
The loan shall attract interest at the rate
of prime plus 0,5% per annum, calculated daily and compounded
monthly;
6.2.4.
The loan shall be repaid in instalments of
approximately R197 998.87 (one hundred and ninety-seven thousand nine
hundred and ninety-eight
rand and eighty-seven cents) per annum
annually in arrears over a period of ten (10) years;
6.2.5.
A certificate signed by an official of the
applicant whose authority need not be proved, setting out the
outstanding balance due
to the applicant shall constitute prima facie
proof of the amount owing by the Trust and Steenkamp to the
applicant;
6.2.6.
In the event of default by the Trust or
Steenkamp, the applicant shall be entitled to claim and recover from
the Trust and Steenkamp
the full outstanding balance due in terms of
the medium-term loan agreement, together with interest thereon at the
rate of 0,5%
per annum;
6.2.7.
The medium-term loan agreement can only be
varied in writing and when signed by the parties to the medium-term
loan agreement;
6.2.8.
The Trust and Steenkamp shall be jointly
and severally liable to the applicant under the medium-term loan
agreement.
6.3.
On 5 November 2013 the Trust and Steenkamp
passed a covering mortgage bond B[...] in favour of the applicant as
security for their
indebtedness towards the applicant in the sum of
R10 000 000.00 (ten million rand) together with the additional amount
of R2 000
000.00 (two million rand). In terms of the covering
mortgage bond:
6.3.1.
The mortgage bond constitutes continuous
covering security for monies loaned and advanced by the applicant to
the Trust and Steenkamp;
6.3.2.
The Trust and Steenkamp waived the benefits
of inter alia, lawful exceptions, revision of accounts, no value
received,
de duobus vel pluribus reis
debendi
and
beneficia
ordinis seu excussiones et divisiones;
6.3.3.
The Trust and Steenkamp shall be jointly
and severally liable as co-principal debtors to the applicant for the
repayment of all
amounts due in terms of the loan agreements;
6.3.4.
In the event of default, the applicant
shall be entitled to execute against the properties put up as
security in the bond;
6.3.5.
A certificate of balance shall at all times
be sufficient proof of any amounts due and owing by the Trust and
Steenkamp to the applicant;
6.3.6.
The Trust and Steenkamp agreed to pay all
legal costs on the scale as between attorney and client; and
6.3.7.
The following properties were listed as
security:
6.3.7.1.
Remainder of the farm Matjesfontein No. 25
situated in the Karoo Highland Municipality, Sutherland division,
Northern Cape Province,
in extent 4484,8543 hectares and held under
deed of transfer no. T[...] in the names of the first, second and
third respondents;
6.3.7.2.
Portion 5 (a remainder of Portion 2) of the
farm Matjesfontein No. 25 situated in the Karoo Highland
Municipality, Sutherland division,
Northern Cape Province, in extent
8,2912 hectares and held under deed of transfer no. T[...] registered
in the names of the first,
second and third respondents;
6.3.7.3.
Remainder of the farm Kleine Fontein No.
886 in the Hantam Municipality, Calvinia division, Northern Cape
Province, in extent 3073,6773
hectares and held under deed of
transfer no. T[...] registered in the name of the fourth respondent;
6.3.7.4.
Portion 6 (a portion of Portion 2) of the
farm Stinkkuil No. 888 in the Hantam Municipality, Calvinia division,
Northern Cape Province,
in extent 15,9751 hectares and held in the
name of the fourth respondent;
6.3.7.5.
Portion 5 (a portion of Portion 4) of the
farm Stinkkuil No. 888 in the Hantam Municipality, Calvinia division,
Northern Cape Province,
in extent 3,4666 hectares and held under deed
of transfer no. T[...] registered in the name of the fourth
respondent;
6.3.7.6.
Remainder of Portion 1 (Klein Karoo) of the
farm Stinkkuil No. 888 in the Hantam Municipality, Calvinia division,
Northern Cape
Province, in extent 1982,0193 hectares and held under
deed of transfer no. T[...] registered in the name of the fourth
respondent;
6.3.7.7.
Portion 3 (Blaauw Krans) of the farm
Stinkkuil no. 888 in the Hantam Municipality, Calvinia division,
Northern Cape Province, in
extent 742,3234 hectares and held under
deed of transfer no. T[...] registered in the name of the fourth
respondent;
6.3.7.8.
Portion 1 of the farm Middelpos No. 887 in
the Hantam Municipality, Calvinia division, Northern Cape Province,
in extent 1051,9974
hectares and held under deed of transfer no.
T[...] registered in the name of the fourth respondent;
6.3.7.9.
Portion of the farm Middelpos No. 887 in
the Hantam Municipality, Calvinia division, Northern Cape Province,
in extent 1994,9654
hectares and held under deed of transfer no.
T[...] registered in the name of the fourth respondent.
6.4.
On 4 October 2013, the fifth respondent
signed two deeds of suretyship in terms of which, the fifth
respondent bound herself as
surety and co-principal debtor with the
Trust and Steenkamp for the due and punctual performance of their
obligations to the applicant
arising out of the loan agreements
(‘’the suretyship’’). In terms of the deeds
of suretyship:
6.4.1.
The fifth respondent’s liability to
the applicant in terms of the one deed of suretyship shall be limited
to R9 000 000.00
(nine million rand) and in terms of the other deed
of suretyship, her liability to the applicant shall be limited to R1
000 000.00
(one million rand);
6.4.2.
Should the principal debtors breach their
obligations under the loan agreements, the applicant shall be
entitled to claim fulfilment
of such obligations from the fifth
respondent;
6.4.3.
A certificate of balance signed by a
manager or official of the applicant, whose capacity need not be
proved, shall be accepted
as prima facie evidence of the amount due
by the fifth respondent to the applicant;
6.4.4.
The fifth respondent renounced the benefits
of lawful exceptions, revision of accounts, no value received,
de
duobus vel pluribus reis debendi and beneficia ordinis seu
excussiones et divisiones
;
6.4.5.
Any amendment or cancellation of the deeds
of suretyship shall only be valid if reduced to writing and signed by
the applicant.
THE RESPONDENTS’
INDEBTEDNESS TO THE APPLICANT
7
In terms of the pleadings, the following
matters are common cause between the parties, not necessarily because
they have been formally
admitted, but in the sense that they have not
been seriously disputed:
7.1.
The Trust and Steenkamp breached their
obligations under the loan agreements and mortgage bond in that they
failed to make payment
of the agreed instalments to the applicant in
terms of the loan agreements;
7.2.
By reason of the respondents’ breach
aforesaid, the full amount outstanding under each agreement became
due and payable by
the respondents to the applicant. In terms of the
Certificates of Balance signed by the applicant’s Finance
Administrator
(Magdalena Groenewald) on 15 March 2021:
7.2.1.
As of the 28
th
of February 2021, an amount of R10 887 200.63 (ten million
eight-hundred and eighty-seven thousand two hundred rand and
sixty-three
cents), together with further interest at 7.50% per annum
from 28 February 2021 to date of final payment was due and owing by
the
first, second, third and fourth respondents to the applicant
under the long-term loan agreement; and
7.2.2.
In terms of the medium-term loan agreement,
an amount of R558 605.51 (five hundred and fifty-eight thousand six
hundred and five
rand and fifty cents) was due and owing by the
first, second, third and fourth respondents to the applicant as at 28
February 2021,
together with further interest at the rate of 7.50%
per annum from 28 February 2021 to date of final payment.
7.3.
Notwithstanding demand, the Trust and
Steenkamp have failed to pay to the applicant the amounts outstanding
under the loan agreements.
7.4.
Accordingly, the Trust, Steenkamp and the
fifth respondent became liable to the applicant as co-principal
debtors under the loan
agreements, mortgage bond and the deeds of
suretyship.
IS RULE 46A
APPLICABLE TO THIS CASE?
8
The respondents contend that the provisions
of Uniform Rule 46A are applicable to this case, and that the
applicant ought to have
complied therewith. The respondent’s
argument for why rule 46A is applicable to this case is based on four
(4) premises.
8.1.
First,
Willie Steenkamp and his wife’s primary residence is situated
on the farm Matjesfontein No. 25, which is referred to
in prayers 3.1
and 3.2 of the notice of motion.
[3]
8.2.
Second,
two employees, one of their spouses and their five dependent children
are also permanently resident on the farm Matjesfontein.
[4]
8.3.
Third,
Kerneels Van Wyk, Josup Karelse, his wife and son, who suffers from
epilepsy permanently reside on the farms referred to
in prayers 3.3
to 3.9 of the notice of motion.
[5]
8.4.
Fourth, should the immovable properties be
declared executable, the employees will lose their employment and
will be rendered homeless.
9
The applicant contends differently. It
contends that the provisions of rule 46A do not find application in
this case because rule
46A applies specifically to execution by a
judgment creditor against the residential immovable property of a
judgment debtor in
cases where the judgment debtor is an individual
and natural person. It does not apply, so the argument continues, to
immovable
property owned by juristic entities and trusts. The
applicant relies on three decided cases in support of this
contention.
9.1.
The
first, is the judgment of the Full Court of the Gauteng Division of
the High Court in
First
Rand Bank Ltd v Folscher and Another, and Similar Matters
.
[6]
In that case, the Court unanimously held that:
“
[30]
The judicial oversight that must be exercised is therefore limited to
those instances where the execution
order relates to the debtor’s
principal or – usually – the only dwelling the judgment
debtor owns. Execution
against a holiday home or a second house that
is not usually occupied by the debtor does not trigger the
application of the rule.’’
9.2.
Importantly, at paragraphs [31] and [32] of
the judgment, the court was in agreement that:
“
[31]
The term ‘judgment debtor’ as understood, for instance,
in
Saunderson
(supra) para 3 refers to an individual, a person. It is therefore the
primary residence owned by a person that falls within the
purview of
the rule.
[32]
Immovable property owned by a company, a close corporation or
a
trust
, of which the member, shareholder or beneficiary is the
beneficial occupier
, is not protected by the amended rule
requiring judicial oversight
by way of an order of court
authorizing a writ of execution, even if the immovable property is
the shareholder’s, member’s
or
beneficiary’s
only residence
.’’ (
emphasis supplied
)
9.3.
At paragraph [50] of the judgment, the
court concluded that the amended rule applies only to individual
judgment debtors, not to
corporate entities or trusts.
9.4.
The
second authority relied upon by the applicant is the Full Court
decision of the Gauteng Local Division in
Absa
Bank Ltd v Mokebe and Related Cases
.
[7]
In
Absa
Bank Ltd
,
the court was not invited, however, to answer the question presented
in this case, thus the question of the applicability of rule
46A to
execution of immovable properties not owned by individuals, but by
trusts and other corporate entities. The court was invited,
instead,
to make a ruling on the procedures to be followed by banks when
foreclosing mortgages on primary residences, and on the
propriety of
the practice of the courts of granting applications for money
judgments against defaulting homeowners while postponing
the
associated applications for sale in execution. Accordingly, the
judgment in
Absa
Bank
Ltd
does not contribute meaningfully to the debate in this case, nor does
it overturn the judgment in
First
Rand Bank Ltd
.
9.5.
The
third authority relied upon, is the judgment of the Gauteng Local
Division, Johannesburg in
Investec
Bank Ltd v Fraser NO and Others
.
[8]
In
Investec
Bank
Ltd
,
an argument similar to the one raised by the respondents in this case
was rejected by the court
per
Lapan
AJ in trenchant terms. Relying on the dictum in paragraph [32] of
First
Rand Bank Ltd
,
the court held:
“
[54]
The above dictum puts it beyond doubt that if the judgment debtor is
not a natural person, the constitutional
considerations and
protections are not available to such a judgment debtor and the right
to access adequate housing in s 26 of
the Constitution is not
implicated.
[55]
Accordingly, in the present matter, the provisions of rule 46A are
not applicable as the property sought
to be executed against is
registered in the name of the Trust and it is irrelevant that the
trustee and her children reside on
the property and consider it their
home. Since the Trust, being the judgment debtor, is not a natural
person, the constitutional
safeguards are not available to it where
execution is sought against its immovable property.’’
10
The applicant’s counsel urged me to
follow the full bench judgment of the High Court in
First
Rand Bank Ltd
, and the judgment of
Lapan AJ in
Investec Bank
Ltd
, and
accordingly find that rule 46A is not applicable to this case for the
reasons
inter alia
,
that:
10.1.
Rule 46A applies specifically to execution
by a judgment creditor against the residential immovable property of
a judgment debtor
in cases where the judgment debtor is an individual
and natural person. It does not apply to immovable property owned by
juristic
entities and trusts.
10.2.
The
Trust is not a natural person and is accordingly incapable of having
a primary residence. Whether the properties are occupied
by trustees
or beneficiaries of the trust, or employees of the trust or another
entity, is immaterial because any residents on
the properties sought
to be declared executable will have their rights protected in terms
of the Prevention of Illegal Eviction
from and Unlawful Occupation of
Land Act 19 of 1998 or by the
Extension of Security of Tenure Act 62
of 1997
.
[9]
11
The
respondents, on the other hand, place heavy reliance on the judgment
of the Gauteng Division of the High Court in
Nedbank
v Trustees for the time being of The Mthunzi Mdwaba Family Trust and
Others
.
[10]
In that case – (‘
Nedbank’)
,
the court held that the legal persona of the judgment debtor is of no
significance in determining whether the provisions of
rule 46A
are
applicable. The Court observed in relevant parts thus:
“
[19]
The underlying principle is that the judgment debtor must perform the
function of a form of a dwelling or
shelter for humans. The
legal
persona
of the judgment debtor is of no
significance. It is immaterial whether the judgment debtor is a
juristic person or a natural person.
The trustees in their official
capacity do not have to be the judgment debtors for
Rule 46A
to be
applicable. The second respondent is a trustee and a surety to the
loan granted to the Trust. It is not essential for the
judgment
debtor to be a surety to the loan granted to the Trust for
Rule 46A
to be applicable.
[20]
The right to housing is recognised as a fundamental human right by
section 26(3).
I also have to determine the purpose for which the
immovable property was purchased and used and by whom it was used. In
this case,
the immovable property which is registered in the name of
the trust, is purchased as a residential property which is registered
in the name of the trust, is purchased as a residential property and
is being used as a dwelling or shelter for one of the trustees
or
trust beneficiary and his children. These are natural persons. What
is important is that the property must be used as a dwelling
by the
trustee of trust beneficiaries (or by the shareholders of the
company). As a consequence, an obligation is placed on the
judgment
creditor to conduct an investigation as to the purpose for which the
property is being used for and by whom.’’
12
On the affidavits, it is not in dispute,
that
12.1.
One
of the beneficiaries of the Trust (Willie Steenkamp) and his wife
have their primary residence situated in Matjesfontein No.
25, which
is one of the immovable properties against which execution is sought
in this application.
[11]
12.2.
Two
employees, one of their spouses and their five dependent children are
also permanently resident on the farm Matjesfontein.
[12]
12.3.
Josup Karelse, his wife and a child of 18
years who is suffering from epileptic fits, as well as Kerneels van
Wyk are residing on
the farms referred to in prayers 3.3 to 3.9.
13.
On the undisputed facts, therefore, all the
immovable properties against which execution is sought in this
application are used
as a residential dwelling by the people referred
to in paragraphs 12.1 to 12.3 above. These are natural persons.
14.
Once it is so, then on the authority of
Nedbank
(
supra
) an
obligation is placed on the judgment creditor (“the Land Bank”)
to conduct an investigation as to the purpose for
which the immovable
properties are being used for and by whom. Such investigation will
probably, further reveal whether the occupants
of the immovable
properties have access to alternative accommodation, or whether a
sale in execution of the immovable properties
will render them
homeless. The implication of this obligation is to trigger the
provisions of
Rule 46A.
15.
Rule 46A
provides, in relevant part, that:
“
(1)
This rule applies whenever an execution creditor seeks to execute
against the residential immovable
property of a judgment debtor.
(2)(a)
A court considering an application under this rule must
–
(i)
establish whether the immovable property which the execution creditor
intends
to execute against is the primary residence of the judgment
debtor; and
(ii)
consider alternative means by the judgment debtor of satisfying the
judgment debt,
other than execution against the judgment debtor’s
primary residence.
(b)
A court shall not authorise execution against immovable property
which is the primary residence
of a judgment debtor unless the court
having considered all relevant factors, considers that execution
against such property is
warranted.
(c)
The registrar shall not issue a writ of execution against the
residential immovable
property of any judgment debtor unless a court
has ordered execution against such property.’’
16.
The
text of
rule 46A
(1) and (2) is instructive on the purpose of the
rule. An examination of the rule will immediately reveal that the
rule is concerned,
in the main, with procedural prescripts only.
However, in
Bestbier
,
[13]
the SCA found that the aim of the rule is to assist the court in
considering whether the
s 26
rights
[14]
of the judgment debtor would be violated if their house is sold in
execution. The SCA concluded that, whenever it is established
that
the immovable property of the judgment debtor, irrespective of
whether the property is owned by a trust or a natural person,
is used
as residential immovable property,
rule 46A
would have to be
followed.
17.
In
the
Bestbier
case,
the SCA drawing strength from the remarks of the Constitutional Court
in
Jaftha
,
[15]
and the SCA decision in
Mkhize,
[16]
observed that:
“
[22]
Rule 46A
requires judicial oversight and consideration by a court of
various factors when a creditor seeks to execute against ‘the
residential immovable property of a judgment debtor’. There is
considerable force in Du Plessis & Penhold’s argument
in
their discussion of
Jaftha
and
Saunderson,
that 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 the immovable property on a case-by-case basis. The
sole purpose of judicial oversight in all cases
of execution against
immovable property is to ensure that the orders being granted did not
violate s 26(1) of the Constitution
and that the judgment debtor is
not likely to be left homeless as a result of the execution.’’
18.
Then, at paragraphs 25 to 28 of the
judgment, the court remarked as follows about rule 46A:
“
[25]
The text of rule 46A(1) reveals that the rule applies whenever an
execution creditor seeks to execute against
residential immovable
property of a judgment debtor. Notably, rule 46A(2) provides that a
court considering an application in which
a creditor seeks to execute
against the judgment debtor’s immovable property must consider
various matters.
[17]
Given
that rule 46A(2) provides that a court ‘shall not’
authorise execution unless ‘all relevant factors’
have
been considered, I can see no reason why the fact, that the relevant
immovable
property is owned by a trust and occupied as a place of residence by
the beneficiary of that trust
,
should not be one of the factors to be taken into account. It is also
noteworthy that rule 46A(3) requires that ‘every notice
of
application to declare residential immovable property executable
shall be . . .on notice to the judgment debtor and to any other
party
who may be affected by the sale in execution.
[26]
It is clear from a plain reading of the entire text of rule 46A that
it is important to have
a preceding enquiry in all cases where the
immovable property of the judgment debtor is used as residential
immovable property.
This preceding enquiry should be directed at
establishing whether the persons occupying the immovable property in
question are
of the
Jaftha
kind. As I see it, a creditor seeking to execute against immovable
property owned by a trust would have to establish whether
beneficiaries
of that trust occupy the immovable property in
question. Where that has been established, rule 46A would have to be
followed and,
consequently, rule 33 of the Practice Directive would
have to be complied with. I therefore disagree with the submission
made by
the respondent’s counsel that the person to be
protected by rule 46A is, in the tradition of
Jaftha
and
Gundwana,
a natural person and not a legal persona such as a company or a close
corporation, nor an institution such as a trust, ‘even
if the
immovable property is the shareholder’s, member’s or
beneficiary’s only residence’.
[18]
Clearly, a blanket approach that considers all immovable property
held in the name of a juristic person to fall outside the protection
of rule 46A is too narrow.
[27]
Due regard must be had to the impact that the sale in execution is
likely to have on vulnerable
and poor beneficiaries who are occupying
the immovable property owned by the judgment debtor, who are at risk
of losing their only
homes. Given the clear provisions of rule 46A, I
can see no reason why trust beneficiaries who fall into the
Jaftha
kind category and occupy the trust’s immovable property as a
primary residence (and are thus likely to be affected by the
order
declaring the immovable property specially executable) should be
barred from the protection of rule 46A merely because the
property in
question is owned by a trust.
[28]
In my opinion, the fact that, in addition to being a primary
residence for the trust beneficiary,
the trust’s immovable
property was also used commercially as a wine farm, cannot, in and of
itself and without any preceding
enquiry, be a bar to affording the
beneficiaries the protection of rule 46A. The protection of rule 46A
should be objective. Thus,
the exclusive consideration of the
nature of the entity in which the judgment debtor’s immovable
property is registered, as
the decisive determining factor for
affording the protection envisaged in s 26 of the Constitution as set
out in rule 46A, would
defeat the very purpose for which the
protection is granted. Vulnerable and poor beneficiaries of a trust
who use the trust’s
immovable property as their home ought not
to be barred from the protection of s 26 of the Constitution merely
because the judgment
debtor is a trust and not a natural person
.’’
(My emphasis).
19.
I agree. The nature of the entity in which
the immovable properties are registered, should not be decisive in
determining whether
to afford the beneficiary of the Trust (Willie
Steenkamp and his wife) who reside at the farm Matjesfontein, the
protection of
section 26 of the Constitution. For so long as the
properties are used as a dwelling for residential purposes, he is
entitled to
the protection under section 26 of the Constitution.
20.
However, the fact that Willie Steenkamp and
his wife are entitled to the protection in terms of section 26 of the
Constitution,
does not mean that the immovable property in question
(Matjesfontein No. 25) may not be sold in execution purely because it
is
being used by Willie Steenkamp and his wife as their primary
residence. What it means, however, is that any declaration of
executability
against the immovable property must be preceded by an
enquiry in terms of rule 46A.
21.
It is that enquiry that will inform the
court whether execution against the immovable property is likely to
violate the rights in
terms of section 26(1) of the Constitution or
not, and whether Willie Steenkamp and his wife will be left homeless
as a result
of the execution. At this stage of the proceedings, this
Court does not have that information before it to determine whether
execution
against the immovable property is likely to violate the
rights in terms of section 26(1) of the Constitution.
22.
An argument may be advanced that execution
against the farm Matjesfontein No. 25 is not likely to violate the
rights in terms of
section 26(1) of the Constitution, because Willie
Steenkamp is a white person and is therefore not likely to be
rendered homeless
should execution be granted against the immovable
property. The complete answer to that proposition is that this Court
simply does
not know at this stage, whether execution against the
immovable property is likely to render Willie Steenkamp and his wife
homeless,
or not.
23.
Had this application been brought in terms
of rule 46A, the Court would have been placed in possession of the
relevant material
to determine whether to grant execution against the
immovable property. Admittedly, the applicant has failed to bring the
application
in terms of rule 46A of the Uniform Rules of Court, on
the basis that rule 46A is not applicable to execution of immovable
property
registered in the name of a trust. That contention is
demonstrably false. Rule 46A is not confined to execution of
immovable property
owned or registered in the name of a natural
person. The rule equally applies to execution of immovable property
owned or registered
in the name of a trust. The decisive factor is
that the immovable property must be used for residential purposes,
and as a primary
residence.
24.
The allegations in the respondents’
answering affidavit, which have not been disputed by the applicant,
are that:
24.1.
Willie
Steenkamp (who is the beneficiary of the Trust) and his wife’s
primary residence is situated on the farm Matjesfontein
No. 25, in
respect of which the applicant is seeking execution.
[19]
25.
Once
it is so, then it follows that rule 46A is applicable to this
application because the applicant seeks execution against immovable
property (Mtajesfontein No. 25), which is being used by the
beneficiary of the Trust (Willie Steenkamp) and his wife, for
residential
purposes as their primary residence. It is important to
note that as a beneficiary of the Trust, Willie Steenkamp will not
enjoy
protection, either under the
Extension of Security of Tenure
Act, 62 of 1997
because he does not fall within the definition of
‘occupier’
[20]
under the Act, or ‘unlawful occupier’
[21]
under the
Prevention
of Illegal Eviction from and Unlawful Occupation of Land Act 19 of
1998 (‘
PIE
Act’).
26.
Though the position of the two employees
may be different from that of the beneficiary of the Trust in that
they would probably
receive protection under the
Extension of
Security of Tenure Act, just
like Willie Steenkamp, they too use the
farm (Matjesfontein No. 25) for residential purposes. For that
reason, it matters not that
the farm workers would be protected by
the
Extension of Security of Tenure Act. For
as long as they use the
immovable property for residential purposes, they are also entitled
to the protection under rule 46A of
the Uniform Rules of Court.
27.
The
same applies to the immovable properties referred to in prayers 3.3
to 3.9 of the notice of motion. In their answering affidavit,
the
respondents allege that Kerneels van Wyk, Josup Karelse, his wife and
a child of 18 years who is suffering from epileptic fits
are residing
at those farms.
[22]
Not much
has been placed before the Court in the form of the arrangements for
their stay at the immovable properties in question,
i.e
,
whether their stay is in terms of a lease agreement or some other
arrangement. For present purposes, however, that is not material.
28.
What is material, is that they are using
the immovable properties referred to in prayers 3.3 to 3.9 of the
notice of motion for
residential purposes. It is not clear as to how
are they residing at all those immovable properties. However, since
the allegations
by the respondents in this regard have not been
disputed by the applicant, there is no reason to question the
respondents’
allegations in this regard. Accordingly, I shall
accept for present purposes that the immovable properties referred to
in prayers
3.3 to 3.9 of the notice of motion are being used for
residential purposes.
29.
Once it is so, then it follows that they
too, are entitled to the protection under section 26(1) of the
Constitution. It is irrelevant
that they may also receive protection
under the PIE Act. This Court is obliged at this stage to ensure that
their rights under
section 26(1) of the Constitution are not
violated.
CONCLUSION
30.
The undisputed evidence before this Court
is that one of the beneficiaries of the Trust (Willie Steenkamp)’s
primary residence
is situated at the farm Matjesfontein No. 25, and
that he resides with his wife at the farm. It is further undisputed
that the
other immovable properties referred to in prayers 3.3 to 3.9
of the notice of motion are also used for residential purposes by
Kerneels, Van Wyk and his family. The personal circumstances of these
people are not known to the Court. In particular, it is not
known
whether these people fall into the poor and vulnerable group, who are
likely to be homeless should the immovable properties
be sold in
execution.
31.
It is no answer to the respondents’
plea for judicial oversight, for the applicant to argue, as it does,
that Willie Steenkamp,
the employees, Kerneels, and Van Wyk and his
family will have their rights protected in terms of the Prevention of
Illegal Eviction
from and Unlawful Occupier of Land Act, or by the
Extension of Security of Tenure Act.
32.
Rule
46A places an obligation on this Court
at this stage of the proceedings, not thereafter, to ensure that the
order which the court
is asked to grant, does not violate s 26(1) of
the Constitution and that execution of the immovable property in
question, will
not result in poor and vulnerable members of society
who permanently reside on the immovable property being rendered
homeless.
This is made clear by the judgment of the Supreme Court of
Appeal in
Mkhize
,
where the court said the following about the role of judicial
oversight in matters of this nature.
“
.
. .
judicial
oversight … is constitutionally required so that the judicial
officer can engage in a balancing process and consider
all the
relevant circumstances of a case to determine whether there is good
cause to order execution against the immovable property
concerned.”
[23]
33.
It is only through judicial oversight that
the Court is able to make an informed determination whether rights in
terms of s 26(1)
of the Constitution are implicated. This was aptly
explained by the SCA in
Mkhize
as follows:
“
[26]
The object of judicial oversight is to determine whether rights in
terms of s 26(1) of the Constitution are
implicated. In the main a
number of cases grappling with
Jaftha
sought to arrive at that determination without accepting that
judicial oversight was required in every case. How, it must be asked,
can a determination be made as to whether s 26(1) rights are
implicated, without the requisite judicial oversight? We are unable
to understand the difficulty of applying the principle that it is
necessary in every case to subject the intended execution to
judicial
scrutiny to see whether s 26(1) rights are implicated
.
. .
”
34.
It may be, that ultimately the court may
find that Willie Steenkamp and his wife do not fall into the category
that will be rendered
homeless should the immovable property (the
farm Matjesfontein) be sold in execution or, that they have access to
alternative shelter.
However, such information is not before the
Court at this stage. What is before the Court, instead, is that the
farm Matjesfontein
is being used by one of the beneficiaries of the
Trust (Willie Steenkamp) and his wife for residential purposes. This
is not denied
by the applicant.
35.
Once it is so, then it follows that
judicial oversight in terms of rule 46A is applicable to the intended
execution of the immovable
properties referred to in prayers 3.1 to
3.9 of the notice of motion. It matters not, that the immovable
properties were purchased
for commercial purposes, and that part
thereof may even still be used for purposes of commercial farming.
36.
In the result, I find that rule 46A of the
Uniform Rules of Court is applicable to this application.
Accordingly, the respondents’
first point
in
limine
of non-compliance with rule 46A
of the Uniform Rules of Court is upheld. The application to declare
the immovable properties referred
to in prayers 3.1 to 3.9 of the
notice of motion executable, must comply with the provisions of rule
46A of the Uniform Rules of
Court.
37.
A decision on the point
in
limine
of non-compliance with rule 46A
would have been dispositive of this case had it not been for the
money claim in prayers 1 and 2
of the notice of motion.
SECOND POINT IN
LIMINE:
FORCE MAJEURE
38.
At the hearing of this application, Ms.
Stanton who appeared for the respondents did not seriously persist
with the plea of
force majeure
.
She urged me that if the Court was not with her on the
force
majeure
defence, the Court should do
one of two things. Either, the Court should -
38.1.
grant the money judgment, but postpone the
execution of the immovable properties, or
38.2.
postpone the case in its entirety, because
the drought has passed and the Trust will be able to keep up with the
repayments of the
loans.
39.
As I have already indicated above, the
respondents do not dispute their indebtedness to the applicant and
the amount thereof. Ordinarily,
I would have been inclined to grant
the money judgment, but postpone the execution of the immovable
properties as requested by
Ms. Stanton.
40.
However,
the proposed approach appears to be at odds with the judgment of the
Full Court of the Gauteng Local Division in
Absa
Bank Ltd
.
[24]
In the
Absa
Bank Ltd
matter
,
the court found that the claim for payment and the claim for
execution must be heard simultaneously and, should the claim for
execution not be finalised and require postponement, the monetary
claim should be dealt with in the same way.
[25]
41.
Borrowing freely, if I may, from the
eloquent explained of the court in
Absa
Bank Ltd
, this Court has the ‘
power
in the exercise of its discretion to postpone the granting of an
order declaring property executable or to defer its operation
where
the property is a debtor’s primary residence because the order
implicates a constitutional right – the constitutional
s 26
right to adequate housing’
. The
court concluded that the discretion emanates from section 172(1)(b)
of the Constitution, which empowers courts with a broad
discretion
when deciding a constitutional matter within its powers to grant just
and equitable relief.
42.
I agree. It would not be competent for this
Court to adjudicate this matter on a piecemeal basis, by deciding the
money claim now,
and defer the adjudication on the execution of the
immovable properties to a hearing in due course. As I have already
indicated
above, both aspects of the case must be heard and
adjudicated upon in the same hearing.
43.
In the result I make the following order:
1.
The application is postponed
sine
die
.
2.
The application to declare the immovable
properties referred to in prayers 3.1 to 3.9 of the notice of motion
executable, must comply
with the provisions of rule 46A of the
Uniform Rules of Court.
3.
The costs of the application are reserved
for determination at the hearing of the entire application.
M J Ramaepadi
Acting Judge of the High
Court of South Africa, Northern Cape Division, Kimberley
APPEARANCES
For
the Applicant:
Adv.
W. J. Pietersen
Instructed
by:
Van
de Wall Attorneys
Kimberley
For
the Respondents:
Adv.
A Stanton
Instructed
by:
Engelsman
Magabane Inc.
Kimberley
[1]
AA
p213 para 2.1.
[2]
AA
p217 para 13.1.
[3]
AA
p213 para 2.1.4.
[4]
AA
p213 para 2.1.5.
[5]
AA
p214 para 2.1.6.
[6]
2011
(4) SA 314
(GNP)-
(‘First
Rand Bank Ltd’
).
[7]
2018
(6) SA 492
(GJ)- (‘
Absa
Bank Ltd’).
[8]
2020
(6) SA 211
(GJ)- (‘
Investec
Bank Ltd’).
[9]
Applicant’s
heads of argument
paras
9 and 10.
[10]
(7901/2017)
[2019] ZAGPPHC 336 (9 July 2019)- (‘
Nedbank’).
[11]
AA
p213 para 2.1.4.
[12]
AA
p213 para 2.1.5.
[13]
Bestbier
and Others NNO v Nedbank Ltd
2023
(4) SA 25 (SCA).
[14]
See
Section
26 of the Constitution of the Republic of South Africa, 1996.
[15]
Jaftha
v Schoeman and Others; Van Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005
(2) SA 140
(CC)- (‘
Jaftha’).
[16]
Mkhize
v Umvoti Municipality and Others
2012
(1) SA 1
(SCA)- (‘
Mkhize’).
[17]
These
include whether the immovable property which the execution creditor
intends to execute against is the primary residence
of the judgment
debtor and whether there are other alternative means by which the
judgment [debtor] can satisfy the debt, other
than execution against
the judgment debtor’s primary residence.
[18]
FirstRand
Bank Ltd v Folscher and Another and Similar Matters
2011
(4) SA (GNP) para 32.
[19]
AA
p213 para 2.1.4.
[20]
Section
1
(1) of the
Extension of Security of Tenure Act defines
an
‘occupier’ as a person residing on land which belongs to
another person, and who has or on 4 February 1997 or
thereafter, had
consent or another right in law to do so, but excluding –
(a)
. . . [Para
.
(a)
omitted by Act 2 of 2018 (wef 1
April 2024).]
(b)
a person using or intending to use the
land in question mainly for industrial, mining, commercial or
commercial farming purposes,
but including a person who works the
land himself or herself and does not employ any person who is not a
member of his or her
family; and
(c)
a
person who has an income in excess of the prescribed amount.
[21]
Under
the PIE Act, an ‘Unlawful Occupier’ is defined as a
person who occupies land without the express or tacit consent
of the
owner or person in charge, or without any other right in law to
occupy such land, excluding a person who is an occupier
in terms of
the
Extension of Security of Tenure Act, 1997
, and excluding a
person whose informal right to land, but for the provisions of this
Act, would be protected by the provisions
of the Interim Protection
of Informal Land Rights Act, 1996 (Act 31 of 1996)
[22]
AA
p213 para 2.1.6.
[23]
Mkhize,
above
n 16 at para 18.
[24]
Absa
Bank Ltd v Mokebe and Related Cases
,
above n 7.
[25]
Absa
Bank
Ltd
,
(supra) at paras 29 and 31.