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[2009] ZALCJHB 85
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Griekwaland Wes Korporatief v Vin and Others, In Re: Vin and Others v Monanda Landbou Dienste (J2404/05) [2009] ZALCJHB 85 (29 April 2009)
IN
THE LABOUR COURT OF SOUTH AFRICA
HELD
IN JOHANNESBURG
REPORTABLE
CASE
NO: J2404/05
In
the matter between:
GRIEKWALAND
WES KORPORATIEF
APPLICANT
and
SHERIFF,
HARTSWATER WARREN
TON
VIN
1
ST
RESPONDENT
MONANDA
LANDBOU DIENSTE
(in
liquidaton)
2
ND
RESPONDENT
FAWU
OBO PALIME D & 219
OTHERS
3
RD
RESPONDENT
In
re:
SHERIFF,
HARTSWATER WARREN
TON
VIN
1
ST
APPLICANT
FAWU
OBO PALIME D & 219
OTHERS
2
ND
APPLICANT
and
MONANDA
LANDBOU
DIENSTE
RESPONDENT
JUDGMENT
MOLAHLEHI
J
Introduction
[1]
T
his is an
application to rescind the Order granted by this Court on 17
th
October 2006. In terms of that Order the Court dismissed the claim by
the applicant over the attached property in execution of
the
arbitration award which had been issued by the commissioner of the
Commissioner for Mediation, Conciliation and Arbitration
(the CCMA).
The Court further declared that the third to further respondents were
entitled to proceed with the execution process
in terms of the writ
of execution issued on 20
th
February 2006.
[2]
The Applicant, Griekwaland Wes Koporatief
(GWK) now seeks to rescind and set aside that order in terms of Rule
16A(1)(a) of the
Rules of this Court and the common law. In its
application to have the above order rescinded the Applicant contends
that the order
was granted erroneously in its absence and that the
Court was not competent to make such an order. The Applicant further
contended
that the Court would not have granted the order had it been
aware of certain facts relating to the interpleader proceedings.
Background
facts
[3]
The history of this matter dates back to
25
th
October 2005, when an award was issued by the CCMA for compensation
in the amount of R257 070.00 against the second respondent
(Monanda)
and in favour of the third to further respondents. The third to
further respondents were represented by their union,
Food and Allied
Workers Union (FAWU).
[4]
Because of failure to comply with the order
by Monada, FAWAU sought to have the award certified in terms of
section 143(3) of the
Labour Relations Act 66 of 1995 (the LRA).
Further to the certification, the writ of execution was issued by the
Registrar of this
Court on 20
th
February 2006, directing the Sheriff to attach the movables of the
Monanda and cause the same to be realized by public auction.
[5]
The GWK claims in its founding affidavit
that it was not aware of the arbitration award including the issuing
of the writ of execution.
The GWK further claims that the Sheriff was
not entitled to attach certain movable goods of Monanda because it
had a special notarial
bond over them. The notarial bond which GWK
relied on in its claim was signed on 21
st
February 2006, a day after the issuance of the writ of execution.
[6]
The GWK argued that the fact that the
notarial bond was signed a day after the writ of execution was issued
had no bearing on its
right in the property because the notarial bond
was prepared some time prior to the 21
st
February 2006. The notarial bond was for the capital amount of R750
000,00 and an additional R150 000,00 in respect of costs incurred
in
relation the bond itself. The bond was according to the GWK
issued in terms of the Security by Means of Movable Property
Act 57
of 1993 (the Movable Property Act). The property attached per the
writ of execution entailed certain machinery of Monanda
which would
have provided security to the indebtedness of Monanda to the GWK.
[7]
Consequent to the GWK’s claim over
the attached property, the Sheriff invoked the interpleader
proceedings on 17
th
October 2006, in this Court. As indicated earlier the Court dismissed
the GWK’s claim and ordered the Sheriff to proceed
with the
execution of the writ.
Principles
governing rescission
[8]
In terms of section 165 of the LRA, this
Court may acting on its own accord or on application by any of the
parties vary or rescind
an order or judgment erroneously sought or
erroneously granted in the absence of the party affected by such an
order or judgment.
An application to rescind may be brought either in
terms of rule 16A (1) (a), or rule 16A (1) (b) or the common law.
[9]
The requirements for filing an application
under any of these rules are different. In terms of rule 16A (1) (b)
read with rule 16A
(2) (b), an application to rescind or vary an
order or a judgment must be brought within 15 (fifteen) days.
The 15 (fifteen)
days requirement does not apply to both rule 16A (1)
(a) and the common law. See
Edgars
Consolidated Stores Ltd v Dinat & others (2006) 27 ILJ 2356 (LC).
The other difference between the two
rules is that whilst rule 16A (1) (b) requires an applicant to
provide a reasonable explanation
for his or her default, this
requirement does not apply to an application in terms of rule 16A (1)
(a).
[10]
The GWK contends that the order issued by
the Court should be rescinded because its default in attending at
Court on 17
th
October 2006, was due to the irregularity in the manner in which the
interpleader proceedings were instituted by the Sheriff. The
second
ground upon which GWK seeks to have the order rescinded is based on
the averment that at the time of making the order the
Court was not
aware of certain facts, which had it been aware of it would not have
made the order.
[11]
It was argued on behalf of FAWU, that the
GWK was in wilful default because itself and Monanda were aware of
the interpleader summons
but failed to file a statement of claim. It
was further argued that both Monanda and the GWK were informed by he
Sheriff that the
matter would be heard on 17
th
October 2006. In the defence of the Court order FAWU relied on the
letter from Monanda’s attorneys dated 24
th
October 2006, wherein in response to the writ of execution it was
stated that Monanda “
has no
objection against the requested Order
.”
[12]
Another important factor to take into
account in the consideration of whether or not to rescind an order or
judgment of a Court
concerns the prospects of success when the matter
is considered on its merits once the order or judgment has been
rescinded. In
dealing with the same issue in
Edgars
Consolidated Stores Ltd v Dinat & others (2006) 27 ILJ 2356 (LC),
Mokgoatleng AJ as he then was, quoted with approval the decision in
Chetty v Law Society of Transvaal
1985
(2) SA 756
(AD)
, where Miller JA
stated, at 765A-C that:
“
The
term "sufficient cause" (or "good cause") defies
precise or D comprehensive definition, for many and various
factors
require to be considered. (See Cairns' Executors v Gaarn
1912 AD 181
at 186 per Innes JA.) But it is clear that in principle and in the
long-standing practice of our Courts two essential elements
of
"sufficient cause" for rescission of a judgment by default
are:
(i)
that they party seeking relief must present a reasonable and
acceptable explanation for his default;
and
(ii)
that on the merits such party has a bona fide defence which,
prima facie , carries some prospect of
success.”
[13]
The Learned Judge went further in
Dinat
and Others
to say:
“
It
is not sufficient if only one of these requirements is met; for
obvious reasons a party showing no prospects of on the merits
will
fail in an application for rescission of a default judgement against
him [or her] no matter how reasonable and convincing
the explanation
of his [or her] explanation his [or her] explanation of his default.
And (sic) orderly judicial process would process
would be negated if,
on the hand, a party who could offer no explanation of his [or her]
default other than his disdain of the
Rules was nevertheless
permitted to have judgment against him [or her] rescinded on the
ground that he [or she] had reasonable
prospects of success on the
merits.”
Interpleader
proceedings
[14]
It is trite that there being no rule in the
Labour Court rules dealing with interpleader proceedings, the
applicable rule is rule
58 of the Rules of the High Court. Rule 58(1)
of the Uniform Rules of the High Court reads as follows:
“
Where any
person, in this rule called ‘the applicant’, alleges that
he is under any liability in respect of which he
is or expects to be
sued by two or more parties making adverse claims, in this rule
referred to as “the claimants”,
in respect thereto, the
applicant may deliver a notice, in terms of this rule called an
‘interpleader notice’, to the
claimants. In regard to
conflicting claims with respect to property attached in execution,
the sheriff shall have the rights of
an applicant and an execution
creditor shall have the rights of a claimant.”
“
Rule
58(2) provides that:
The interpleader notice
shall
(a) state the
nature of the liability, property or claim which is the subject
matter of the dispute;
(b) call upon
the claimants within the time stated in the notice, not being less
than 15 days from the date of service
thereof, to deliver particulars
of their claims; and
(c) state
that upon a further date, not being less than 15 days from the date
specified in the notice for the delivery
of claims, the applicant
will apply to court for its decision as to his liability or the
validity of the respective claims.”
[15]
The interpleader proceedings are initiated
by the Sheriff as soon as there are conflicting claims to a property
which is subject
to an attachment process arising from a writ of
execution. In terms of rule 58 of the High Court Rules, as soon as
the Sheriff
becomes aware of the conflicting claims in a property
which is subject of an attachment, he or she issues a notice stating
therein,
the nature of the property which is the subject matter of
the dispute and call on the contending parties to deliver their
respective
particulars of claims within 15 (fifteen) days of date of
delivery of the notice.
[16]
The Sheriff is further required to attach
to the interpleader notice an affidavit indicating that he or she
does not have an interest
in the subject matter in dispute other than
the charges and cost and further that does not collude with any of
the parties in dispute.
[17]
In the present instance the Sheriff issued
the interpleader notice on 11
th
September 2006, in terms of Rule 58(1) of the High Court Rules. In my
view the first notice issued by the Sheriff failed, in more
than one
respect to comply with the provisions of rule 58 of the Rules of the
High Court. In the first instance the notice incorrectly
refers to
the Sheriff as the first applicant and to Monanda as the second
applicant. And more importantly there is no reference
to the GWK in
this notice. The notice ought to have referred to FAWU and its
members as one claimant on the one hand and to the
GWK as the other
claimant on the other hand.
[18]
In addition to failure to identify the
different claimants in respect of the property in issue, the notice
fails to call upon each
of the claimants to deliver their particulars
of their claims. The notice calls upon one claimant, "die
Aanspraakmaker"
to deliver particulars of his claim, but "die
Aanspraakmaker" is not identified in the notice. In my view the
reference
to the document constituting the notarial bond as a claim
by the "die Aanspraakmaker" is insufficient to identify the
GWK as one of the claimants and FAWU as the other claimant. The
notice falls short of the requirement of calling on GWK to file
the
particulars of its claim to the movable property attached by the
Sheriff. The other difficulty with the first notice is that
it was
not signed nor did it indicate the date when the hearing would be
held to determine the dispute as contained in the notice.
[19]
The second interpleader notice which was
signed and also recorded the date on which Sheriff would apply to
Court for its decision
as to his liability or the validity of the
respective claims was faxed to the GWK on 3
rd
October 2006. The hearing was in terms of this notice scheduled to
take place 17
th
October 2006, which is a period of less than 15 (fifteen) Court days
required by rule 58 of the High Court Rules. In this regard
the
notice was thus also irregular.
[20]
FAWU in its particulars of claim in
response to the interpleader notice state:
“
19.1
The third to further respondents were the first claimant and the GWK
was the second claimant in the interpleader proceedings.
19.2 Subsequent to this
Honourable Court having issued a writ of execution against the second
respondent, so contends the third
to further respondents, the second
respondent colluded with the GWK and unlawfully registered a notarial
bond in favour of the
GWK on 20 March 2006.
19.3 The purpose of the
notarial bond is to defeat the due process of law (and in particular
the execution process embarked upon
the third to further
respondents), so says the third to further respondents. Since the
notarial bond was only lodged with the Deeds
Office on 20 February
2006 and the execution order was dated 20 February 2006, it is
invalid and unenforceable.”
[21]
The GWK on the other hand contended that
FAWU’s particulars of claim were flawed because:
“
20.1
It fails to identify, whether by way of annexure or otherwise, who
each of the individuals are on whose behalf
the third
respondent is filing the particulars of claim (i.e. who are the
further respondents).
20.2
The particulars of claim fails to indicate that the notarial bond
registered by the GWK was a special notarial bond-
The significance
of this is, as explained above, that it ought to comply with the
Security by Means of Movable Property Act, 57
of 1993. If it does,
the goods are deemed to pledge to the GWK and cannot be attached.
20.3 It
suggests that the second respondent and the GWK colluded in
concluding the notarial bond. This is not so. The
bond was
anticipated and was prepared some time prior to the writ of execution
being issued by this Honourable Court. In this regard
the following
is pertinent:
20.3.1
The notarial bond was anticipated in advance of the date on which it
was
signed by the parties (which happens to be one day after the writ
of execution was issued). This is evident from the face of the
notarial bond. It records that a special power of attorney was
already granted to the second respondent's representative to sign
the
special notarial bond on 16 February 2006. The authority would not
have granted were the execution of the notarial bond not
anticipated.
20.3.2 The GWK
instructed its attorneys of record to prepare the notarial bond
on the 9 December 2005.1 annex hereto
as “FA1 1” proof of
the instruction to the GWK's attorneys of record.
20.4 It is
incorrect that the notarial bond is unlawful, or that it is invalid
and unenforceable. In any event, the
third to further respondents did
not make such allegations in their particulars of claim such as would
render the notarial bond
unlawful and invalid. In particular:
20.4.1
At the time of concluding the special notarial bond (and at all times
since)
there has been a valid principal obligation on the part of the
second respondent vis-à-vis the GWK. The third to further
respondents have not alleged otherwise.
20.4.2
The notarial bond complies with the provisions of the Security by
Means of
Movable Property Act, 57 of 1993 and was correctly
registered in accordance with the
Deeds Registries Act, 47 of 1937
.
The third to further respondents have not pointed to any provisions
in this legislation not being complied with.”
[22]
Before dealing with the issues concerning
the interpleader I need to pause and deal very briefly with the legal
principles governing
notarial bonds. The general principles governing
notarial bonds are no different to those governing all mortgages
bonds.
[23]
Similar
to a mortgage bond a notarial bond is an instrument through which a
debtor may hypothecate movable property without delivering
it to the
creditor in whose favour the bond is passed. See
Badenhorst
et al in Silberberg and Schoeman’s Law of Property, 4
th
Edition p385
.
According to Badenhorst the Security by Means of Movable Property Act
57
of 1993, was promulgated to address the whole issue
of notarial
bonds, as well as to provide for specific matters relating to movable
property as the object of real security. In this
respect the main
objectives of the Movable Property Act is to regulate the legal
consequences of registration of a notarial bond
over specified
movable property. Once registered in accordance with the provisions
of the
Deeds Registries Act 47 of 1937
, a corporeal movable property
which is specified and described in the notarial bond in such a way
that it is readily recognizable
in terms of section 1 of the Movable
Property Act, is deemed to have been pledged as if it had expressly
been delivered to the
mortgagee.
[24]
Turning to the facts in the present matter,
there can be no dispute that the first notice can not be regarded as
a proper interpleader
notice because it was not signed. The second
notice was also defective because it did not give the GWK sufficient
time as required
by rule 58 of the Rules of the High Court to file
its particulars of claim before the matter could be heard by the
Court.
[25]
The next issue upon which this matter, in
my view, turns on concerns the prospects of success if the order
granted earlier by the
Court was to be rescinded and the interpleader
was to be considered on its merits.
[26]
In support of its prospects of success the
GWK argued that rule 45(8) (b) of the Rules of the High Court
provides that an attachment
is incomplete until the Sheriff has
served on the execution debtor in the property pledged which would
include the notarial bond.
It argued on the facts that the execution
was incomplete until it was served on the GWK. In terms of rule
45(8)(b). Rule 45(8)
(b) provides as follows:
“
(8)
If
incorporeal property, whether movable or immovable, is available for
attachment, it may be attached without the necessity of
a prior
application to court in the manner hereinafter provided:
(a)
…
(b)
Where movable property sought to be attached is the interest of the
execution debtor in property pledged,
leased or sold under a
suspensive condition to or by a third person, the attachment shall be
complete only when the sheriff has
served on the execution debtor and
on the third person notice of the attachment with a copy of the
warrant of execution. The sheriff
may upon exhibiting the original of
such warrant of execution to the pledgee, lessor, lessee, purchaser
or sellers enter upon the
premises where such property is and make an
inventory and valuation of the said interest.”
[27]
In as far as the substantive aspect of an
interpleader is concerned, it is only a claim in
ius
in re
in the property which will found
success in the interpleader and therefore a claim to a
jus
ad rem
or personal claim is
insufficient to sustain an interpleader claim. See
Mayet
v Mall
1959 (3) SA 811
(NPD).
In terms
of mortgage bonds the
ius in re
which is a real right in a property is conferred on the mortgagee in
the mortgagor’s property on registration of the bond.
Thus the
date of registration of the bond is key to determining whether or not
an interpleader claim is sustainable and not the
date on which the
debt secured by the bond was incurred. See Badenhorst et al (supra)
page 369
.
[28]
In
Lief
NO v Dettmann
[1964] 2 All SA 448
(A)
in dealing with the consequences of a mortgage bond held that:
“
The
bond is registered in the Deeds Office so that the world should have
knowledge of
f
the fact that
there is a charge against the mortgagor’s property; the object
is not to notify the world that the mortgagor
owes the mortgagee
specific a sum of
money.
Creditors of the mortgagee cannot rely on the acknowledgment of
indebtedness in
the mortgage bond as correctly reflecting the debt owed to the
mortgagee by the mortgagor at any particular time
subsequent to
registration.
The
only real rights in
favour of
the
mortgagee
created by the registration
of the bond are rights in respect of the mortgaged property, e.g. the
right to restrain its alienation
and the right to claim a preference
in respect of its proceeds on insolvency of the mortgagor. These real
rights, however, can only exist in respect of a debt, existing or
future, and it follows that they cannot be divorced from the
debt
secured by them. On the other hand such a debt can exist without
being secured, and there seems to be no reason why a mortgagee
should
not be able to cede the debt without also ceding the security. It may
be that where no cession of the bond is contemplated
the mortgagor is
entitled to claim a cancellation of the bond, but that is another
matter. The real rights under a bond are immovable,
but the debt is a
movable. Cession of real rights in land require registration, but
cession of a debt under a bond, being an incorporeal
movable,
requires no more than an agreement to cede. I agree that inasmuch as
no cessions of any of the bonds in this case were
registered, the
plaintiff’s claims to “real rights” in the bonds,
or “secured claims” in respect
of the proceeds thereof
cannot succeed.”
[29]
The Court went
further and stated that:
“
In
Union Government v. Chatwin,
1931
T.P.D. 317
,
reference is made to the fact that the object of the mortgage bond is
not merely hypothecation but the settlement of
the
terms of
the
loan as well. The obligation of
o
the mortgagee to lend the money to the mortgagor and the latter’s
obligation to furnish the security stipulated for and to
comply with
the conditions as to repayment of
o
the amount of
f
the loan flow from their common consent to undertake the transaction.
By their common consent alone, however, they only create
personal
rights and obligations, notwithstanding the fact that in part their
consent aims at the constitution of
the
real right in immovable property which is to inhere in the lender.
Consensual right to claim hypothecation of the immovable
property is
prior to the personal right available only against the debtor. When
the debtor gives effect to the reciprocal obligation
in this respect
by causing the mortgage to be registered in the Deeds Registry then,
and only then, is the real right properly
constituted in favour of
the
mortgagee (Registrar Deeds (Tvl) v Ferreira Deep Ltd,
1930
A.D. 169
at p.
180
)
does not affect the nature of
the
principal obligation, which throughout retains its character as of
personal right of
action
available to the mortgagee against the mortgagor for the payment of
f
the interest and capital due in terms of
f
the mortgage bond.”
[30]
Turning to the facts of this case, it is
common cause that the notarial bond was registered after the Sheriff
attached the property
which is the subject of the interpleader. On
face value interpretation of these facts it means that at the time of
the attachment,
the GWK had personal and not real right on the
movable property and therefore the conclusion which ordinarily should
be drawn is
that the GWK has no reasonable prospects of success when
the merit of interpleader is considered once the rescission was
granted.
However the prospects of success are fairly high if one
accepts the interpretation that the GWK had placed in its argument on
the
provisions of rule 45(8) (b), of the Rules of the High Court,
which provides that the attachment would only come into effect once
the third party, which in this case would be the GWK, has been served
with the notice of attachment. The second interpleader notice
whilst
signed by the Sheriff unlike the first one, only Monanda, FAWU and
its members are cited therein. There is also no reference
to the GWK
in the interpleader except that in the same way as the first notice
there is reference to the “
die
Aanspraakmaker."
Thus this notice
did not properly identify the Applicant such that it could be said
that “
die Aanspraakmaker"
refers to it and therefore failure to
file a claim and appear in Court when the order was made was not
wilful conduct on the part
of the Applicant.
[31]
In the light of the above I am of the view
that the Applicant has made out a case for the rescission of the
order of the Court made
on the 17 October 2006. I am also of the view
that in the circumstances of this matter, there is no reason in both
the law and
fairness why the costs should not follow the results.
[32]
In the premises the following order is
made:
(i)
The Order granted by the Court on the 17
th
October 2006, is rescinded.
(ii)
The Applicant is granted leave, within 15
(fifteen) days of date of this Order, to serve and file its
particulars of claim in relation
to the property identified in the
interpleader notice in this matter.
(iii)
Any party to the interpleader proceedings
may, on proper notice to the other party to the interpleader
proceedings, set down the
interpleader dispute for a hearing on a
date not less 30 days of date of this Order.
(iv)
The Third to Further Respondents are to pay
the costs of the Applicant.
_______________
Molahlehi
J
Date
of Hearing :
7
th
August 2008
Date
of Judgment :
29
th
April 2009
Appearances
For
the Applicant :
Adv G Fourie
Instructed
by :
Duncan & Rothman
Attorneys
For
the Respondent: Mr M J
Ponoane of Ponoane Attorneys