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[2011] ZAWCHC 4
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Naidoo and Another v Firstrand Finance Company Ltd and Others (25776/2009) [2011] ZAWCHC 4; [2011] 3 All SA 99 (WCC); 2012 (6) SA 122 (WCC) (2 February 2011)
REPORTABLE
Republic
of
South Africa
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE TOWN)
CASE
No: 25776/2009
In the
matter between:
KRISHNA
NAIDOO
First Applicant
BERNADETTE
MARY NAIDOO
Second Applicant
and
FIRSTRAND
FINANCE COMPANY LIMITED
First Respondent
SAAMBOU
BANK LIMITED
(Under
Curatorship in terms of section 69 of the Bank Act, No 94 of
1990)
Second Respondent
MARK
ROY
LIFTMAN
Third Respondent
THE
REGISTRAR OF
DEEDS
Fourth Respondent
I J
HUGO N O
(In his capacity as
the Sherriff of the
Magistrate’s
Court, Kuils
River)
Fifth Respondent
________________________________________________________________________
JUDGMENT DELIVERED :
2 FEBRUARY 2011
_____________________________________________________________________
Heard
on 14 October 2010
For
Applicants
: Adv A
Aggenbach
Attorney(s)
: NSW
Attorneys (c/o Snitchers Inc)
For
1
st
&
2
nd
Respondents :
Adv D van Reenen
Attorney(s)
: Schevel
Cohen & Fourie
REPORTABLE
Republic of South Africa
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE TOWN)
CASE
No: 25776/2009
In the matter between:
KRISHNA NAIDOO
…..............................................................................
First
Applicant
BERNADETTE MARY NAIDOO
….....................................................
Second
Applicant
and
FIRSTRAND FINANCE COMPANY LIMITED
….................................
First
Respondent
SAAMBOU BANK LIMITED
(Under Curatorship in terms of
section 69 of the Bank Act, No 94 of 1990)
…..................
Second
Respondent
MARK ROY LIFTMAN
…....................................................................
Third
Respondent
THE REGISTRAR OF DEEDS
….....................................................
Fourth
Respondent
I J HUGO N O
(In his
capacity as the Sherriff of the
Magistrate’s
Court, Kuils River)
…........................................................
Fifth
Respondent
________________________________________________________________________
JUDGMENT DELIVERED : 2 FEBRUARY 2011
_____________________________________________________________________
MOOSA, J:
The Relief
This is an application in which the applicants seek an order that
the purported sale in execution of Erf 4706, Erf 2816 and Erf
2817,
Kraaifontein (“the properties”) held on 6 November
2008, be set aside and, pending the setting aside of
the sale, that
the fourth respondent be interdicted from registering transfer of
the properties into the name of the third respondent.
Save for the
first and second respondents, the other respondents are not opposing
the application. On 8 December 2009 an order
was granted in terms of
which, the transfer of the properties was interdicted pending the
outcome of this application. On 11
December 2009 an order was taken
by agreement, in terms of which the future conduct of the matter was
agreed to and the matter
was eventually set down on the semi-urgent
roll for argument. The first and second respondents reserved the
right to argue the
question of urgency. The applicants are seeking
final relief or, for that matter, a pronouncement on the validity of
the execution
process which will have the effect of final relief.
The relief sought is for the sale in execution in this matter to be
set aside
for want of proper compliance with the rules of the court.
The Grounds of Challenge
The applicants attacked the sale of execution on a number of
grounds; the majority of which comprised the failure, on the part
of
the first and/or the second respondents, to comply with the
Magistrates’ Rules of Court. Some of the grounds were not
raised in the founding papers but were belatedly introduced in the
replying papers or in applicants’ heads of argument.
The
grounds of challenge included
, inter
alia
, the failure
to give proper notice of amendment with regard to the substitution
of the name of the plaintiff in the pleadings
and the warrant of
execution (r 55A read with r 36(6)); the failure to have the warrant
of execution re-issued by the clerk of
the court (r 37(3) read with
r 36(1)) and the failure to serve the warrant of execution and
notice of attachment as required
in terms of r 43(2)(a) read with r
9(3)(d) on the proper
domicilium citandi et executandi
address
.
Matter not raised in the Founding Papers
Although the various alleged grounds of attack constitute serious
non-compliance with the Rules of Court, it is not necessary
to deal
with all those grounds. It would be sufficient to set aside the sale
on one ground provided it goes to the heart of the
matter of
non-compliance. One of the grounds relied on by the applicants for
the relief sought is the failure of the respondent
to serve the
warrant of execution and the notice of attachment on the chosen
domicilium
address as required by r 43(2)(a) read with r
9(3)(d). The first and second respondents contended that the
applicants had not
raised the failure to serve the notice of
attachment in terms of r 43(2)(a) in their founding papers. This is
incorrect. The
issue was raised in the founding papers, although it
may not have been articulated very clearly. However, all the facts
that
constitute the particular ground were set out in the founding
papers and the annexure.
In para 49 of the founding affidavit, the first applicant states:
“
I assume that during August 2008 a fresh
warrant of execution against the properties was issued as the copy
that my attorneys of
record obtained from the court file does not
bear the court’s stamp or signature. We had no notice of the
assumed issue of
the warrant.”
Admitting the contents of para 49, first respondent, in para 40 of
its answering affidavit, went on to explain:
“
The fact of the matter is that the bank
served the documents on the Applicants’ chosen domicilium. At
no stage had the Applicant’s
notified the Bank that they had
vacated the premises and were effectively no longer in control
thereof, despite being aware that
this was the address where all
legal process had been served in the past.”
First applicant continues in para 50 to state the following:
“
In
terms of a copy a return of service by the Sherriff (sic), on 22
August 2008 a copy of the warrant and a Notice of Attachment
was
affixed to the outer or principle (sic) door. However, he also states
that there were no doors. I also refer the court to the
fact that the
Sherriff (sic) also recorded that the buildings were damaged, that
there were no windows and that the ceilings were
broken. A copy of
the return is attached hereto and marked as “KN31”. In
fact the buildings were completely abandoned
and stripped of anything
that could be removed and at approximately that same time the
municipality demolished all the buildings
on the second property.”
In response thereto the first respondent in para 41 of the Answering
Affidavit admits the contents, save to deny that there was
no
principle outer door on the property and states:
“
It is clear that there was such a door
as the sheriff attached the process to the door. The return
interpreted as a whole states
that there were no other doors on the
premises.”
The undisputed fact is that the principal door to which the documents
in question were affixed, was located on the second property
and not
on the first property which was the chosen
domicilium
address
in terms of the Mortgage Bond
.
It is common cause that the
domicilium
address in question was a vacant piece of land. I
am satisfied that the ground in question, challenging the validity of
the service
of the warrant of execution and notice of attachment, was
raised in the founding papers of the applicants and the first and
second
respondents in fact responded thereto in their answering
papers. In my view there is therefore no substance in the complaint
that
the matter was not raised in the founding papers.
The Question of Urgency
Before dealing with the merits of the matter, I need to deal with
the preliminary issue concerning the question of urgency, which
the
first and second respondents reserved for argument at the hearing of
the application. In my view, events have overtaken the
question of
urgency. The matter was postponed on at least two occasions by
agreement with the parties and the matter was, with
the concurrence
of the Judge President, referred to the semi-urgent roll for hearing
on 16 February 2010. On 16 February 2010
the first and second
respondents brought an application to file a further affidavit. The
application was opposed by the applicants.
On 22 February 2010, the
court granted the application as well as leave to the applicants to
file opposing affidavits. The matter
eventually came before me for
hearing on 14 October 2010. I do not think that the first and second
respondents suffered any prejudice
by the applicants bringing this
matter as one of urgency. The first and second respondents were
afforded adequate opportunity
to file the necessary answering
affidavit. In any event, the transfer of the properties was imminent
and the applicants were
entitled to come to court as a matter of
urgency to protect their interests. In the circumstances, I am of
the view that the
complaint is misplaced.
The Merits
I now turn to deal with the merits of the matter, namely, the
failure of the first and/or second respondent to serve the warrant
of execution and the notice of attachment on the chosen
domicilium
citandi et executandi
address as required by r 43(2)(a) read
with r 9(3)(d). In this regard the dictum in
Campbell v Botha and
Others
2000 (1) SA 238
(A) by
Streicher JA
at para 18, is
apposite:
“
An attachment is effected by way of a
notice by the sheriff served together with a copy of the warrant of
execution upon the execution
debtor as owner, upon the registrar of
deeds, upon all registered holders of bonds registered against the
property, if the property
is in the occupation of some person other
than the execution debtor, also upon such occupier and upon the local
authority in whose
area the property is situated (Rule 43(2)(a)).
Whatever the position may be if service is not effected on any of the
other interested
persons there can, in my view, never be said to have
been an attachment where neither the warrant nor the notice of
attachment
had been served on or brought to the notice of the owner.”
It is not disputed that the
domicilium
address is a vacant
piece of land and, at all relevant times prior to the purported
attachment, first and second respondents communicated
with the
applicants at their residential address or through their appointed
attorneys. It is common cause that the mortgaged
property comprises
three separate erven described as follows:
Erf 4706, Kraaifontein, 793 square meters, consisting of a
vacant erf, more commonly known as 123 Voortrekker Road,
Kraaifontein (“the first property”);
Remainder Erf 2816, Kraaifontein, 1377 square meters, consisting of
brick buildings which previously housed a police station and
more
commonly described as 126, 3
rd
Avenue, Kraaifontein (“the
second property); and
Remainder Erf 2817, Kraaifontein, 496 square meters, consisting of a
vacant erf, more commonly known as 122, 3
rd
Avenue,
Kraaifontein (“the third property”).
It is common cause that clause 18 of the Mortgage Bond states:
“
The
Debtor hereby chooses as domicilium citandi et executandi at the
mortgaged property or, should there be more than one property
mortgaged, at the first property herein referred to as being
mortgaged as security for indebtedness under this Bond – where
all notices and legal processes in relation to this Bond or to any
action hereunder may be effectually delivered and served.”
The first property that is mortgaged is the vacant Erf 4706, which
is the first property. The return of service of the Sheriff
dated 25
August 2008 describes the service of the documents by the Deputy
Sheriff, Martin, as follows:
“
On this 22
nd
day of August 2008 at 16.10 I served a
copy of the Warrant of Execution & Notice of Attachment upon the
OCCUPANT at 122 –
3
rd
AVENUE, KRAAIFONTEIN by affixing a copy
of the said process to the outer or principle (sic) door as I found
the premises locked.
No other service possible after a diligent
search. Rule 9(6).”
The Sheriff goes on to describe the condition of the building as
follows:
“
DESCRIPTION : BUILDING ON ERF DAMAGED,
NO DOORS OR WINDOWS, CEILINGS BROKEN.”
From the Sheriff’s return of service, it appears that the
warrant of execution and the notice of attachment were served
on the
second property, which consisted of the buildings and which is more
commonly known as 126, 3
rd
Avenue, Kraaifontein and not
122 – 3
rd
Avenue, Kraaifontein as described in the
return of service. The first and second respondents admitted service
was effected on
the second property. This address did not qualify as
the
domicilium
in terms of the provisions of the Mortgage
Bond. The
domicilium
is the first property, which is more
commonly described as 123, Voortrekker Road, Kraaifontein. This also
happens to be a vacant
piece of land. The address given on the
return of service is that of the third property and which is also a
vacant piece of land.
The first and second respondents contended that the summons was
served on the applicants personally at the
domicilium.
It is
not in dispute that, at the time, the applicants were conducting a
business from the second property and they fortuitously
happened to
be present at the business when service was affected. However, at
the time when the warrant and notice of attachment
were served at
the same address, the applicants had already closed the business and
vacated the premises located on the second
property and no personal
service could be affected on them. Service was then affected by
affixing the documents on the principal
door of the second property,
which was not the chosen
domicilium
address in terms of the
Mortgage Bond. The
domicilium
address in terms thereof was
the first property, which was a vacant piece of land. It is not
disputed that the warrant of execution
and the notice of attachment
was served on the second property.
The Findings
Where service is to be effected on a
domicilium
address that
is a vacant piece of land, strict compliance with proper and
effective service is
sine qua non.
To affect service on a
neighbouring property, even if it belongs to the same owner, when
the
domicilium
is the first property is, in my view, not
proper and effective service as required by the rules of court. I
accordingly conclude
that the service of the warrant of execution
and the notice of attachment, on the second property and not on the
first property,
were not proper and effective service of the warrant
of execution and notice of attachment on the applicants. In any case
the
applicants alleged that they were not aware of such service nor
was it brought to their attention. They only discovered that the
properties were sold in execution on 2 November 2009, when they
contacted second respondent to ascertain the balance owing
and were
informed that the properties were sold on 6 November 2008.
In view of the defective service of the warrant of execution and the
notice of attachment any subsequent steps taken leading
up to the
sale in execution of the properties are invalid and of no force and
effect. In my view, there was no substantial compliance
with the
rules relating to the attachment of the immovable properties. In the
result, the sheriff had no authority to conduct
the sale of the
properties (see
Rossouw and Steenkamp v Dawson
1920 AD 173
at
180). The purported sale in execution is accordingly a nullity. In
view of my findings it is not necessary to deal with all
the other
challenges mounted by the applicants on the validity of the sale in
execution including those challenges that were
mounted in
applicants’ replying papers, if any, or in their heads of
argument. This would include the complaint regarding
the change of
name from “Saambou Bank Beperk” to “Firstrand
Finance Company Limited”, which was a technical
objection. It
in any case appears that the applicants accepted the change in names
as they continued paying to the latter company
without demur and it
also appears that they did not suffer any prejudice.
The Costs
I now turn to the question of costs. There is no reason why costs
should not follow the result. The applicants were substantially
successful and they should be awarded the costs, including the costs
of 8 and 11 December 2009, which stood over for later determination.
The matter was only opposed by the first and second respondents and
not by the third, fourth and fifth respondents. The first
and second
respondents should accordingly be held liable for the costs jointly
and severally, the one paying the other to be
absolved.
The Order
In the result, the following order is made:
(a) The sale in execution of properties being the remainder of Erf
4706, Kraaifontein, remainder of Erf 2816, Kraaifontein and
remainder
of Erf 2817, Kraaifontein, on 6 November 2008 to the third
respondent, pursuant to a warrant of execution issued by the
Kuils
River Magistrate’s Court under case No 2379/2002, is set aside;
(b) the first and second respondents are ordered to pay the costs of
the applicants including the wasted costs occasioned on 8
and 11
December 2009, jointly and severally, the one paying the other to be
absolved.