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
(WESTERN CAPE DIVISION, CAPE TOWN)
REPORTABLE
CASE NUMBER: 7927/2022
In the matter between
THE METRO BODY CORPORATE APPLICANT
and
BELINDA JANE DIEM FIRST RESPONDENT
THE TRUSTEES, FOR THE TIME BEING SECOND RESPONDENT
OF THE DN FAMILY TRUST
MOEGSINA ASHMAIL THIRD RESPONDENT
THE REGISTRAR OF DEEDS FOURTH RESPONDENT
FIRSTRAND BANK LIMITED FIFTH RESPONDENT
JUDGMENT
Date of hearing: 12 November 2024
Date of judgment: 18 November 2024
BHOOPCHAND AJ:
1. For those who litigate the law in the name of others without their approval and
those who break the law and enter its citadels with unclean hands , expect not
its generosity nor look to it for reward. Should a Court award costs against a
person not a party to the proceedings, and should a Court award costs to any
party who comes to it with unclean hands? These are the issues that this
application morphed into determining.
2. The Metro Body Corporate is a sectional title scheme incorporated under the
Sectional Titles Act 95 of 1986 (“DTA”). The scheme's housing is in the central
business district of Cape Town ((“the Scheme”/the Applicant ”, “the body
corporate”). It was established in 2010 and consists of two units. The First
Respondent, Belinda Jane Diem (“Diem”), was the registered owner of the
smaller Unit 1 of the scheme. Diem acquired her unit in October 2016. The
owner of the larger unit 2 is Panjo Investm ents (Pty) Ltd. The Second
Respondent, DN Family Trust (“DN Trust”), purchased the unit from Diem. The
registration of its ownership of Unit 1 occurred on 23 November 2020 . The
Third Respondent, Moegsina Ishmail, is an attorney and conveyancer who
transferred Unit 1 to the DN Trust. The Fourth Respondent is the Registrar of
Deeds, and the Fifth Respondent is the First Rand Bank. The Second and
Fourth Respondents have not participated in this application.
3. The Applicant sought an order declaring that the property transfer from the
First Respondent to the Second Respondent was unlawful and invalid. The
Applicant also sought consequential relief to cancel the sale registration. The
application was initiated on 25 March 2022 by Coughlan Pather (“Pather”) ,
who attested to the founding affidavit. He alleged that he was authorised to
represent the Applicant. He does not allege that he was authorised to initiate
the application nor to litigate it. As Pather’s authori ty to initiate and prosecute
this application was disputed, he produced two resolutions annexed to his
replying affidavit: one of the Trustees of the body corporate authorising him to
represent them and t he other ratifying his actions in instructing attorneys and
instituting the application. Two persons who bore Pather’s surname signed
these resolutions as Trustees of Unit 2. They turned out to be hi s wife and
son. More of this later.
4. After the exchange of affidavits,1 The matter went into limbo. The application
was set down for hearing on the opposed motion roll of 19 October 2023 but
was removed on 27 September 2023. Pather contended in his written
submissions that it was patently clear that he did not intend to prosecute it .
The First Respondent acknowledges t hat in a supplementary note. The First
Respondent submitted that Pather did not take active steps to progress the
application after 2023. The Fifth Respondent set the matter down for hearing
on 12 November 2024.
5. The Fifth Respondent applied to be joined as a party to the application on 11
April 2024. The Fifth Respondent advanced a loan of R4 800 000 to the
Second Respondent to enable it to purchase Unit 1 of the scheme. The
Second Respondent failed to pay the monthly instalments, causing the entire
outstanding amount under the facility to become due and payable. The Fifth
Respondent instituted proceedings against the Second Respondent on 26
April 2022 to claim payment of the outstanding balance. It obtained an order
to declare unit 1 specially executable. This court issued a writ of execution
against the Second Respondent on 31 August 2022. A sale in execution was
arranged for 30 May 2023. The Fifth Respondent elected not to proceed with
the sale largely due to the dispute between the parties.
6. The Fifth Respondent alleged that no provision had been made for the
cancellation of the mortgage bond they held over the property or the
1 It is unclear when Pather filed his replying affidavit . The affidavit was commissioned on 16
August 2023
repayment of the loan amount. The Fifth Respondent contended that it would
forfeit its se curity and be prejudiced in recovering the outstanding amounts
owed if judicial execution followed the ancillary relief sought in this application.
The Applicant, through Pather, sought the cancellation of the transfer deed on
unit 1. The Fifth Respondent contends that Pather should have known of the
mortgage bond held by the Fifth Respondent when he initiated the application.
The Fifth Respondent ’s demands to Pather that the Bank be joined to the
application on 8 September 2023 was of no avail.
7. The Fifth Respondent acknowledged that the application was removed from
the opposed motion roll of 19 October 2023 and that there was an attempt to
convene a meeting between interested parties to resolve the matter. The
matter was not resolved when the Fif th Respondent applied to join the
application. The First Respondent contended that Pather should have
withdrawn the application if he did not intend to prosecute it. After the matter
was set down for hearing, Pather filed a practice note and submitted a written
argument.
8. The First, Third, and Fifth Respondents raised various points in limine. These
included Pather’s authority to instit ute the application, the prescription of the
First Respondent’s indebtedness to the body corporate, the lack of any legal
defect in the First Respondent’s sale of the unit to the Third Respondent when
viewed under the abstract theory of transfer, and the doctrine of unclean
hands as applied to Pather’s conduct. The Respondents asserted that Pather
realised he held no authority to raise and prosecute the application.
9. Yet, Pather ’s practice note submitted on his behalf on 8 November 2024
indicated that if the Court found he had the requisite authority to institute the
application, it should grant the relief sought. The heads of argument submitted
on behalf of the Applicant simultaneously contained the jaw-dropping request:
that the application should be struck from the roll with no order as to costs. An
application to strike a matter off the roll falls within the exclusive preserve of
the Respondents, and the order to do so is within the prerogative of the Court.
An Applicant can seek to withdraw his matter with the agreement of the
Respondents coupled with an assurance to attend to their costs.
10. The First, Third and Fifth Respondents submitted in unison that the
application should be dismissed and Pather should pay their costs. Dismissal
would ensure that the application would not resurface at a later date. The
Respondents contended that the Applicant should not bear the costs as it
would impose an inequitable burden on the owner of Unit 1 to pay for
unauthorised litigation.
WAS THIS APPLICATION PROPERLY AUTHORISED?
11. A pre requisite to ordering costs against Pather, who is not a party to the
litigation, is for this Court to find that the Applicant did not authorise this
application. Pather did not concede that h e held no authority to institute this
application. In the practice note submitted on behalf of the Applicant, Pather’s
authority to institute the application was listed as one of the issues the Court
had to determine. This point escaped the attention of the F irst, Third, and
Fifth Respondents when they sought costs against Pather, i.e., the Court had
to find that Pather did not hold the authority to initiate and prosecute this
application.
12. Section 10 (1) of the “STSMA” provides that a body corporate must be
regulated and managed by its rules from the date of its establishment. Section
10(2)(a) provides for amendment of the prescribed management rules . The
prescribed management rules differentiate between a body corporate with
less than four members and one with more than four. The former applies to
this application , meaning that the owners of Unit 1 and Unit 2 or their
representatives were the only Trustees of the Applicant. The members had no
authority to appoint additional Trustees.
13. The prescription of two Trustees in a body corporate with the same number of
units risks deadlock in decision -making. Section 16 of the STSMA allows any
owner to apply to the Magistrate’s Court for the appointment of an
Administrator to handle administrative mismanagement of the corporate body.
Section 9 of the STSMA permits an owner to litigate against another owner
through and by notice to the body corporate to institute proceedings , failing
which an application is made for the appointment of a curator ad litem to
institute and conduct proceedings on b ehalf of the body corporate. This
application was neither pursued through the appointment of an administrator
nor a curator.
14. The party concerned need not authorise the deponent to an affidavit in motion
proceedings. It is the institution and prosecution of the proceedings that must
be authorised. The limitation imposed on litigation on behalf of corporate
bodies is to protect them from unmeritorious proceedings . The authority to
initiate proceedings concerning community schemes like the Applicant is
restricted to owners who can show that they suffered loss or damage. 2
Pather's resolutions did not comply with the STSMA's requirements. For the
resolution to be valid, Pather required the owners' signatures of uni ts 1 and 2.
The scheme did not have a managing agent who could have approved
litigation with the owner of Unit 2 against the First Respondent. The owner of
Unit 2, Panjo Investments, remains as illusory as Pather’s authority to institute
this application. The Court is satisfied that Pather had no authority to institute
this application on behalf of the Applicant.
SHOULD PATHER BEAR THE COSTS OF THIS APPLICATION?
15. Someone has to be liable for the legal costs incurred by a Respondent arising
from a failed application. It cannot be that a person with no authority to initiate
or prosecute an application can fade into obscurity after ca using the ir
opponent to incur costs in defending themselves against the claims instituted
against them or , as in the Fifth Respondent’s case, causing them costs to
2 Spilhaus Property Holdings (Pty) Ltd and Others v Mobile Telephone Networks (Pty) Ltd and
Another in respect of the repealed section 41of the Sectional Titles Act
defend their legal interest in the order sought . 3 The distinction between locus
standi and the authority to act is acknowled ged. Authorisation pertains to
whether a party is properly before the court, and locus standi concerns the
direct interest of a party in the relief sought in legal proceedings. 4 The rule is
that a Court will not order costs against someone not a party to the
application. There are exceptions to the rule. The Respondents are entitled to
look to the person who initiated the application. Pather alleged in his founding
affidavit that he represented the First Applicant and later provided tainted
authority to li tigate on the Applicant’s behalf. The reluctance to award costs
against someone not a party to the litigation arises because there is no legal
conceptual basis to do so. The peculiar circumstances of a particular case
may circumvent the difficulty.
16. The First Respondent acknowledged the conceptual difficulty of mulcting
Pather with the application's costs. She sought the issuance of a rule nisi
calling upon Pather to show cause why he should not personally pay the
costs. In her written submissions , she contended that a rule nisi would
invariably result in another Judge having to read the file. She suggested that
as Pather is already on notice that costs are being sought against him , the
Court should grant it subject to Pather’s right to apply to reconsider the order.
The First Respondent’s position evolved after the Applicant belatedly made
written submissions . The First Respondent contended that as Pather had
addressed the issue of costs in those submissions, he should not be afforded
a further opportunity to do so. It seems to be settled law that costs can be
awarded against persons who do not hold authority to litigate. 5 A case has
been made out to mulct Pather with the costs of this application.
3 Interim Ward S19 Council v Premier Western Cape Province & others [2003] JOL 11650 (C),
(7784/97, 7785/97 ) [2003] ZAWCHC 28 (7 July 2003) . The distinction between locus standi and
authority to act is acknowledged.
4 Erasmus, Superior Court Practice, at D1-96
5 See, e.g., Richards and Another v Rabie and Others (9530/2021) [2021] ZAWCHC 214 (27
October 2021)
SHOULD THE COURT AWARD COSTS TO THE FIRST AND THIRD
RESPONDENTS?
17. The Fifth Respondent has made a case for costs from the date it opposed the
application. The case of the Second and Third Respondents is more tenuous
on the question of costs.
18. The First Respondent required a levy clearance certificate before she could
sell Unit 1 to the Second Respondent. Section 10 of the STSMA requires two
Trustees to sign a clearance certificate for it to be valid and binding. Section
15(4)(b) of the STA prohibits the registration of the transfer of a unit in a
scheme unless a conveyancer certifies that all monies a transferor owes to
the corporate body have been paid. The First Respondent admits that she
signed the levy clearance certificate . The First Respondent provides a
plethora of reasons and excuses for signing the certificate in the Applicant's
name. Those rea sons are irrelevant when considering costs. The ST SMA
contains provisions to accommodate the position where the First Respondent
could not obtain a levy clearance certificate. First Respondent’s Counsel
acknowledged that the Respondent had recourse to othe r measures in
deadlock situations. The First Respondent could have applied for an
administrator or curator to facilitate her acquisition of a lawful clearance
certificate. She did not. The First Respondent had no authority to s ign the
certificate on behalf of the corporate body. There is no difference in turpitude
between her sig ning the certificate and Pather initiating an unauthorised
application.
19. On 12 December 20 19, M angcu Lockwood AJ 6 delivered judgment against
the First Respondent for compelling a p rospective purchaser of Unit 1 to
perform under an agreement of sale. The Court found that the First
Respondent had failed to disclose material facts to the prospective purchaser.
The Court stated that a reasonable, honest person in the First Respondent’s
position would have disclosed the information. The First Respondent’s
6 As she then was
application was dismissed, and she was ordered to pay the costs of the
prospective purchaser. An application to appeal the judgment was dismissed.
The judgment did not deter the First Respondent from unlawfully signing a
document on behalf of another.
20. The Third Respondent was the conveyancer who attended to the transfer of
Unit 1 to the Second Respondent. She advised the First Respondent that she
required the signatures of both trustees on the levy clearance certificate to
proceed with the transfer . Yet, she proceeded with the transfer using a false
document signed by one Trustee. She alleges that the First Respondent
advised her that the First Respondent was authorised to sign on behalf of the
Applicant. The First Respondent also advised her that the First Respondent
was the holder of the larger portion of the participation quota. These
allegations do not mitigate the position of the First Respondent. The Third
Respondent knew she had to obtain a valid clearance certificate before Unit 1
could be transferred. The Third Respondent sought to justify her actions.
Those are irrelevant for determining costs. The Court does not have to make
a finding against either the First or Third Respondent to exercise its discretion
to award or deny them costs of the application. It merely looks at their conduct
against public policy considerations.
21. The fifth Respondent raised the common law principle of “unclean hands” in
the context of Pather’s conduct. It states that a party cannot seek equitable
relief from a Court if they acted unethically, unjustly, or in bad faith concerning
the subject matter of the claim. In other words, the party must come to Court
with clean hands to receive a favourable outcome. The principle can be
invoked by any party, not just the party commencing the litigation. The
opposing party can use it as a defence to argue that the claimant should not
be granted relief due to their own misconduct. The granting of relief
encompasses the cost order sought by a successful party.
22. The “clean hands” doctrine is of English origin. It does, however, equate to the
Roam-Dutch maxim of “ in pari delicto potior est conditio possidentis vel
defendentis”, which means that in equal fault, the condition of the possessor is
more favourable. It is known as the par delictum rule. It's a legal maxim that
states that when both parties in a dispute are equally at fault, the defendant
has the stronger position. 7 The par d elictum rule is concerned with the moral
guilt of the parties, not their liability. The principle underlying the par delictum
rule is that the law discourages illegality. It would be contrary to public policy
to assist or reward those who defy the law. The rule was strictly and
consistently applied in our Courts8 until it was relaxed.9 The Appellate
Division ( SCA) affirmed that considerations of public policy underly the rule
but that it s application should be limited to instances where public policy
should properly be taken into account to achieve simple justice between one
person and the other.10
23. The F ifth Respondent relied on applying the rule in the context of Pather’s
conduct. Pather, in turn , referred to the First Respondent’s conduct in
producing a certificate alleged to be that of the Applicant. This Court censured
the First Respondent for previous conduct relating to her previous attempt to
alienate Unit 1. The First Respondent informed the Third Respondent that she
was authorised to sign on behalf of the Applicant and that she held the larger
portion of the participation quota. The Third Respondent, in turn, facilitated the
transfer of Unit 1 to the Second Respondent , knowing full well that two
Trustees had to sign to validate a levy clearance certificate and that this was a
peremptory provision of the transfer.
24. The Court could not surmount its knowledge about the First and Third
Respondent’s conduct. It would be wrong to reward them with the cost order
they sought. The Court does not have to decide whether the First or Third
Respondents' conduct was in par delictum with Pather, i.e., their actions
showed equal turpitude. There is no reason why the rule should not form part
of the considerations applicable in exercising a Court’s discretion to award
cost in any matter.
7 Klokow v Sullivan 2006 (1) SA 259(SCA)
8 Brandt v Bergstedt 1917 CPD 344
9 Jajbhay v Cassim (AD 537) 1939
10 Afrisure CC and Another v Watson NO and Another 2009 (2) SA 127 (SCA) at para 39 et seq
25. The First Respondent submitted that Pather should pay their party and party
costs with Counsel’s taxed or agreed costs on the B scale. The Third and Fifth
Respondents supported the submission. The Court finds favour with the
submission except that in exercising its discretion and as a token slap on the
wrist, the First and Third Respondents will be deprived of a percentage of their
costs. The latter will be reflected in the order that follows.
ORDER
26. The application is dismissed,
27. Coughlan Pather, with identity number 6[…], shall pay the costs arising from
this application,
28. The Fifth Respondent is entitled to its costs, which include the taxed or agreed
cost of Counsel on the B scale,
29. The First Respondent is entitled to sixty (60) per cent of her costs, such costs
to include the taxed or agreed costs of Counsel on the B scale,
30. The Third Respondent is entitled to eighty(80) per cent of her costs, including
the taxed or agreed-upon costs of Counsel on the B scale.
________________________
Ajay Bhoopchand
Acting Judge of the High Court
Western Cape Division
Cape Town
Judgment was handed down and delivered to the parties by e -mail on 18
November 2024
Applicant’s Counsel: T Moore
Instructed by Mac Gregor Erasmus Attorneys
Counsel for the First Respondent: A Brink
Instructed by Biccari Bollo Mariano Inc.
Counsel for the Third Respondent: B Braun
Instructed by Jaffer & Associates
Counsel for the Fifth Respondent: W Jonker
Instructed by STBB Attorneys