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[2010] ZAWCHC 103
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Standard Bank of South Africa Ltd v Swartland Municipality and Others (11525/2009) [2010] ZAWCHC 103 (31 May 2010)
REPORTABLE
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE HIGH
COURT, CAPE TOWN)
CASE No: 11525/2009
In
the matter between:
THE STANDARD BANK OF
SOUTH AFRICA LIMITED Applicant
and
THE SWARTLAND
MUNICIPALITY
First
Respondent
MICHIEL
SMIT TRUTER BASSON
Second
Respondent
MARIO
BRAND
Third
Respondent
JUDGMENT
DELIVERED : 31 MAY 2010
MOOSA,
J:
The Demolition Order:
[1 ] On 29 April 2009,
the first respondent in this matter obtained default judgment in
terms of which the Magistrate's Court ordered
the third respondent to
demolish, on or before 8 June 2009, the unauthorised and illegal
structures comprising a garage and a storeroom
on Erf 7407 and
situate at 3 Simmentaler Street, Malmesbury ("the property").
In the event of the third respondent failing
to comply with the
order, the Court authorised and ordered the second respondent, the
Sheriff, to carry out the order by 9 June
2009 (the "demolition
order").
It
is common cause that the third respondent had failed to get written
approval from the
first
respondent prior to erecting the said structures.
[3] The demolition order
was obtained in terms of section 21 of the Act on the ground that the
erection of the said structures does
not comply with the provisions
of the Act, in that the third respondent did not have approved plans
for the erection of the said
structures and the said structures
contravened the provisions relating to the five metre street building
line or set back.
Application to
Interdict and Set Aside the Demolition Order:
[4]
On 8 June 2009, the applicant brought an urgent application for,
inter
alia,
the
following relief:
"2.
That a rule nisi be issued calling upon the Respondents to show cause
(if any) on a date and at a time to be determined
by the above
Honourable Court why:-
2.1 The
demolition contemplated by the court order issued by the Magistrate,
Malmesbury, under case number 246/2009 on 29 April
2009 should not be
interdicted and the order set aside.
22
The costs of this application not be paid by First Respondent
together with any of the remaining two Respondents who may oppose
the
relief sought."
The Application was only
opposed by the first respondent. The second respondent abided the
decision of the Court and the third respondent
did not oppose the
Application.
[5] In argument before
me, counsel for the applicant sought an order setting aside the
demolition order issued by the Magistrate's
Court of Malmesbury. In
the alternative he asks that the demolition be interdicted until such
time as an application may be brought
in the Magistrate's Court for
the order to be set aside.
The Objective Facts:
[6] It is quite clear
from the objective facts that the conduct of the third respondent was
wrongful and unlawful. Firstly, he submitted
building plans in
flagrant contravention of the Act and the Zoning Regulations and
failed to rectify the plans when requested to
do so by the first
respondent; secondly, he ignored all the correspondence addressed to
him in this matter, both by the first respondent
and its attorney;
thirdly, he deliberately and intentionally went ahead with the
erection of the structures knowing that he had
no prior written
approval from the first respondent and that they contravened the Act;
fourthly, he was given written warning not
to proceed with the
building operations prior to obtaining the necessary approval, but
despite such warning, he went ahead and
fifthly, he not only erected
the unauthorised structures for which he had submitted plans and
which were not approved, but he also
erected an unauthorised jacuzzi
and bathroom for which he had no plans or approval.
The Issues:
[7]
The issues to be determined are firstly, whether the applicant has
made out a case for a final interdict, alternatively an interim
interdict; secondly, whether the applicant has made out a case for
the setting aside of the demolition order; and thirdly, whether
the
judgment of this court for the foreclosure on the two bonds
supersedes the demolition order.
Whether a case has
been made out for a final alternatively an interim interdict:
[8] The main relief
sought by the applicant is couched in the form of a final order and
the alternative relief sought by it is in
the form of an interim
order. In order to succeed in respect of the main relief, Applicant
must show firstly, that it has a clear
right; secondly, that such
right has been infringed; and thirdly it has no other suitable
remedy. In order to succeed in respect
of the alternative relief, the
applicant must show firstly, that it has a
prima
facie
right;
secondly, that it will suffer irreparable harm if the interim relief
is not granted; thirdly, that the balance of convenience
favour the
granting of the interim relief; and lastly, the absence of any other
remedy. (See:
Setlogelo
v Setlogelo
1914
AD 221
at 227;
Masuku
v Minister of Justice
1990
(1) SA 832
(A) at 840-841; and LAWSA by
Joubert,
Second
Edition, Vol 11 at paras 396 and 403.)
[9] The applicant brought
the application on the basis that it is the holder of a first and
second Mortgage Bond over the property.
It alleged that, as such, it
had a direct and substantial interest in the outcome of the
proceedings in the Magistrate's Court
and should have been joined as
a necessary party. It was submitted further, on behalf of the
applicant, that it had obtained a
judgment for foreclosure against
the third respondent in this court, in terms of the Mortgage Bonds,
and the property was declared
executable. Such order, it was argued,
superseded the demolition order of the Magistrate's Court.
[10] Most of the facts
are either common cause or undisputed. In my view, the issues can be
determined on the facts which are common
cause or not disputed,
together with those facts which do not constitute a
bona
fide
and
genuine dispute of fact on the basis of the principles set out in
Plascon-Evans
Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd
1984
(3) SA 626
(A).
Whether the Applicant
has a clear alternatively
prima
facie
right:
[11] I will deal with the
issue of whether the applicant had a clear right alternatively a
prima
facie
right.
The applicant relied on the fact that, as a first and second
bondholder over the property, it had a right to be joined by
the
first respondent to the proceedings of the Magistrate's Court in
which the latter sought a demolition order in terms of section
21 of
the Act. It is common cause that the Applicant was not joined as a
party to the proceedings in the Magistrate's court. The
general rule
is that if a party has an interest of such a nature that it is likely
to be prejudiced by a judgment given in the
proceedings, such a party
ought to be joined
(Kethel
v Kethel's Estate
1949
(3) SA 598
(A) and
Amalgamated
Engineering Union v Minister of Labour
1949
(3) SA 637
(A)). The test is whether the party has a direct and
substantial interest in the proceedings and the outcome thereof
(Collin
v Toffie
1944
AD 456
and
Home
Sites (Pty) Ltd v Senekal
1948
(3) SA 514
(A)).
[12] A direct and
substantial interest has been held to be "an
interest
in the right which is the subject matter of the litigation and not
merely a financial interest which is only an indirect
interest in
such litigation. It is 'a legal interest in the subject matter of the
litigation, excluding an indirect commercial
or economic interest
only'".
(See:
Herbstein & Van Winsen:
The
Civil Practice of the High Court of South Africa,
Fifth
Edition, Volume 1 at 217 and the authorities quoted in support.)
[13] The Appellate
Division in
Amalgamated
Engineering Union v Minister of
The
Standard Bank of SA Ltd v Swartland Municipality & 2 Others
Labour
1949
(3) SA 637
(A) sets out two tests to determine whether a third party
has a direct and substantial interest: the one is whether the third
party
would have
locus
standi
to
claim relief concerning the same subject matter (the
locus
standi
test)
and the other is whether the third party who has not been joined can
successfully raise the defence of
res
judicata
concerning
the same subject matter in a subsequent case and obtain a conflicting
decision to that made in the first instance (the
res
judicata
test).
[14] It is common cause
that the third respondent did not defend the proceedings in the
Magistrate's Court and the first respondent
obtained default judgment
against The third respondent. In my view, the applicant has no
locus
standi
to
claim against The first respondent any relief in the Magistrate's
Court litigation. It likewise cannot successfully raise the
defence
of
res
judicata
in
any subsequent case and in the process obtain a conflicting decision
to the one made in the first instance, because the applicant
was not
a party to the proceedings in the Magistrate's Court. In the
circumstances, I conclude that the applicant fails both the
locus
standi
and
the
res
judicata
tests.
[15] Counsel for the
applicant submitted further that the registration of the instrument
of hypothecation in the Deeds Office is
a means of informing other
creditors that
jus
in re aliena
exists
in favour of the mortgagee in respect of the hypothecated property.
The doctrine of
jus
in re aliena
vests
in the mortgagee a proprietary interest in the property belonging to
the mortgagor. Such right constitutes a real right
(Barclays
Western Bank Ltd v Comfy Hotels Ltd
1980
(4) SA 174
(A) at 178D).
[16] The short answer to
the above submission is that the application of the doctrine to the
facts of this case, is misconceived.
That doctrine can never be
applicable to the unauthorised and illegal structures which might
constitute part of the hypothecated
property. The registration of the
bonds over the property does not
per
se
create
for the applicant any rights in the unauthorised and unlawful
structures. I accordingly conclude that the doctrine of
jus
in re aliena
does
not protect the applicant from the demolition of the unauthorised and
illegal structures, which fortuitously became part of
its security.
[17] In my view the
applicant has not laid a factual or legal basis on the strength of
which it is permitted to maintain such unauthorised
and unlawful
structures by means of an interdict against the first respondent in
the face of the judgment that was lawfully obtained
against the third
respondent for the demolition of the unauthorised and unlawful
structures.
[18] I therefore conclude
that the applicant has no direct and substantial interest in the
unauthorised structures which formed
the subject matter of the
proceedings in the Magistrate's Court or the outcome of such
proceedings. As a bondholder it had an indirect
financial and
commercial interest in the Magistrate's Court litigation and the
outcome thereof. It, therefore, cannot be said that
the applicant had
a legal interest in the demolition of the unauthorised and illegal
structures
(United
Watch & Diamond Co (Pty) Ltd and Others v Disa Hotels (Pty) Ltd
and Another
1972
(4) SA 409
(C)).
[19] It is a trite
principle of our law that the court will not readily grant an
interdict restraining the exercise of a statutory
power in the
absence of
mala
fides.
In
Gool v
Minister of Justice and Another
1955
(2) SA 682
(C) at 688 by
Ogilvie
Thompson, J
(as
he
then was) says the following:
"The
present is, however, not an ordinary application for an interdict. In
the first place, we are, in present case, concerned
with an
application for an interdict restraining the exercise of statutory
power. In the absence of any allegation of mala fides,
the Court does
not readily grant such an interdict, that, I think, is clear from the
judgment in
Molteno
Bros & Others v South African Railways and Harbours
1936
AD 321...
"
There
is no evidence of
mala
fides
on
the part of the first respondent in exercising its statutory power to
secure the demolition order. On the facts of this case
mala
fides
can
be attributed to the third respondent.
[20] I accordingly
conclude that there was no legal obligation on the first respondent
to have joined the applicant as a party to
the proceedings in the
Magistrate's Court. It must, therefore, follow that the applicant has
failed to establish the first requirement
for the granting of an
interdict, namely a clear right in the case of a final interdict or a
prima
facie
right
in the case of an interim interdict. In view of my findings it is
unnecessary to deal with the other requirements of a final
or interim
interdict. In the circumstances, the applicant cannot succeed in his
claim for an interdict, whether in the final form
or on an interim
basis.
[21] Even if the
applicant had established all the requirements for an interdict in
this matter, the court would have had serious
reservation in
exercising its residual discretion to come to the assistance of the
applicant in the face of the unauthorised and
unlawful conduct of the
third respondent in firstly, failing to obtain prior written approval
to erect the garage and storeroom;
secondly, in erecting such
structures in contravention of the Act and the Zoning Regulations;
and thirdly, erecting additional
unauthorised and illegal structures,
such as the jacuzzi and bathroom.
[22] The unauthorised and
illegal conduct of the third respondent is
contra
boni mores
and
contrary to public policy and cannot be condoned by the court. It
militates against the doctrine of legality, which forms an
important
part of our legal system and more especially since the Constitution
became the Supreme Law of the country.
Chaskalson,
CJ
(as
he
then
was) said in
Pharmaceutical
Manufacturers of SA: In re Ex Parte President of the
Republic
of South Africa
[2000] ZACC 1
;
2000
(2) SA 674
(CC) at 687H that:
"The
exercise of all public power must comply with the Constitution, which
is the supreme law, and the doctrine of legality,
which is part of
that law."
This
statement was quoted with approval in
Oudekraal
Estates (Pty) Ltd v City of Cape
Town
and Others
2002
(6) SA 573
(C) at 593B-D.
Whether a case has
been made for the setting aside of the demolition order:
[23] The next issue the
court should determine is whether the applicant has made out a case
for the setting aside of the demolition
order. This court is only
competent to set aside the demolition order if the order is unlawful
or is tainted by irregularity. It
is common cause that the order was
granted by the Magistrate's Court in terms of section 21 of the Act.
While such judgment stands,
the order is valid and legal. Such order
can only be set aside by this court on appeal or review. The matter
is not properly before
it on appeal or review. The applicant was not
a party to the proceedings in the Magistrate's Court and would lack
locus
standi
to
appeal against the default judgment or instituting review proceedings
in the face of the third respondent having failed firstly,
to defend
the action; secondly, to rectify the building plans; and thirdly, to
rectify the unauthorised and unlawful structures.
The applicant
would, furthermore, have no grounds to pursue an appeal or review in
this matter.
[24] The other option the
applicant would have is to apply to the Magistrate's Court for
rescission of judgment. In that case, the
applicant would also have
difficulty in succeeding with an application in the absence of it
disclosing "good cause" or
a valid and
bona
fide
defence to set aside the default judgment. The applicant's counsel
contended that, in terms of section 18 of the Act, the applicant
can
apply to the first respondent for deviation or exemption from the
requirements of the Act or the Zoning Regulations. This,
in my view,
does not constitute "good cause" or
bona
fide
defence.
Counsel for the first respondent submitted that the third
respondent's agent, Mr Louw, had applied to the first respondent
to
reconsider the non-approval of the plans, but the first respondent
had refused such request. Without making a formal finding
in respect
thereof, it is highly unlikely that the applicant, in my view, would
succeed with the application for deviation or exemption
on the facts
of the case.
[25] The object of
rescinding a default judgment is to enable the applicant to air the
real dispute between the parties (Jones and
Buckle:
The
Civil Practice of the Magistrate's Court
,
Ninth Edition, Vol
II
at 49-2 and
Saphula
v Nedcor Bank Ltd
1999
(2) SA 76
(W)
at 79B). In
casu
there
is no dispute between the applicant and the first respondent to
justify rescission of the demolition order obtained in the
Magistrate's Court. In the circumstances the Magistrate is
functus
officio
and the
default judgment stands.
[26] In my view the
applicant, in the main relief, has failed to establish a factual or
legal basis to have the demolition order
set aside by this court and,
in the interim relief, the probabilities of success do not favour the
applicant in securing rescission
of the demolition order in the
Magistrate's Court.
Whether the judgment
of this court for foreclosure supersedes the judgment of the
Magistrate's Court:
[27]
Counsel for the applicant submitted that the applicant had obtained
judgment in
The
Standard Bank of SA Ltd v Swartland Municipality & 2 Others
this court against the third respondent in term of the two bonds and
the property has been declared executable. He argued that
this order
supersedes the Magistrate's Court order for the demolition of the
unauthorised and illegal structures. The demolition
order in the
Magistrate's Court was obtained a day before the judgment in respect
of the two mortgage bonds was obtained in this
court and the property
declared executable.
[28] In my view, the
latter judgment in which the property was declared executable was
subject to the judgment in the Magistrate's
Court in which an order
was granted authorising the demolition of the unauthorised and
illegal structures. To give it any other
construction or effect,
would tantamount to this court legitimising the unauthorised and
illegal structures, which were ordered
to be demolished by the
Magistrate's court. The unauthorised and illegal structures could
never have formed part of the Applicant's
security arising from the
two mortgage bonds. In the circumstances I conclude, that the
judgment of this court does not supersede
the judgment of the
Magistrate's Court but rather subsumes it.
The Findings:
[29] In the light of all
the circumstances, I am of the view that the applicant has failed to
establish, on a balance of probabilities,
that it had a clear right,
which is one of the prerequisites for a final interdict or a
prima
facie
right
which in turn, is one of the prerequisites for an interim interdict.
The applicant has failed to lay a factual or legal basis
for this
court or the Magistrate's Court to set aside the demolition order.
The applicant must, therefore, fail in its claim to
have the
demolition order of the Magistrate's Court set aside by this court.
It must likewise fail in its alternative claim for
an interdict
pending an application to be made to the Magistrate's Court for the
setting aside of the demolition order.
The Order:
[30] In the premises
the application is dismissed with costs.
E MOOSA