About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2011
>>
[2011] ZAWCHC 109
|
|
Sheriff for the Magistrate Court Kuilsriver and Another v Registrar of Deeds Cape Town and Another (9815/2011) [2011] ZAWCHC 109 (24 June 2011)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case
No: 9815/2011
In
the matter between:
THE
SHERIFF FOR THE
MAGISTRATE'S
COURT KUILS RIVER
First Applicant
ABSA
BANK
LIMITED
Second Applicant
and
THE
REGISTRAR OF DEEDS, CAPE TOWN
….............................................................
First
Respondent
PAULINE
DAVIDS
…..................................................................................................
Second
Respondent
Court:
BOZALEK
J
Heard:
31
May 2011
Delivered:
24 June 2011
INSTRUCTED
BY:
Fourie
Basson & Veldtman
ADV.
FOR DEFENDANT:
INSTRUCTED
BY:
ADV.
FOR AMICUS CURIAE:
INSTRUCTED
BY:
Reportable
THE
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE HIGH COURT, CAPE TOWN
CASE
NO: 9815/2011
In the matter between:
THE
SHERIFF FOR THE
MAGISTRATE'S
COURT KUILS
RIVER
First Applicant
ABSA
BANK
LIMITED
Second
Applicant
versus
THE
REGISTRAR OF DEEDS, CAPE
TOWN
First
Respondent
PAULINE
DAVIDS
Second
Respondent
JUDGEMENT
: 23 JUNE 2011
BOZALEK
J:
[1] In
this unopposed application heard in the motion court, the Sheriff of
the Magistrates' Court, Kuils River (the first applicant)
and ABSA
Bank Limited (the second applicant), sought an order against the
Registrar of Deeds, as first respondent, and the second
respondent,
as the owner of certain immovable property situated at Brackenfell,
directing the former to pass transfer of such property
from the first
applicant to the second applicant.
BACKGROUND
[2]
The background to the application is as follows. Second applicant
loaned certain monies to the second respondent under the security
of
two mortgage bonds registered over the immovable property. When the
second respondent defaulted in the payment of monthly instalments
on
the underlying loans, the second applicant foreclosed on the mortgage
bonds and obtained default judgment against the second
respondent for
the outstanding balance and an order, made on 6 November 2009, by the
magistrate of Kuils River declaring the immovable
property
executable.
[3]
A
writ
of
execution was issued and an attachment of the property was effected
on 22 December 2009. It was, however, only sold in execution
by the
first applicant to the second applicant on 10 January 2011 i.e. more
than a year later and without any extension of the
validity of the
warrant. The deed for the passing of transfer was lodged in the Deeds
Office, Cape Town on 14 March 2011.
[4]
The first respondent rejected the deed giving as a reason that an
attachment issued by the magistrates' court was valid for
only one
year. The second applicant wrote to the first respondent contending
that in terms of s 66 of the Magistrate's Courts Act,
32 of 1994
("the Act") an attachment only lapses in such circumstances
where the immovable property is subject to a claim
preferent to that
of the execution creditor. It pointed out, furthermore, that the
mortgage bonds upon which it had foreclosed
were the only preferent
claims in respect of the property. The first respondent did not
accept these contentions and cited, as
further reasons why it would
not pass transfer, non-compliance by the applicants with the
requirement set out by Constitutional
Court in the cases of Gundwana
v Steko Development CC and 2 others CCT 44/10 [2011] SA CC 14 and
Japhta v Schoeman and others;
Van Rooyen v Stoltz and others SA 140
CC. Further correspondence passed between the second applicant's
attorneys and the first
respondent regarding the applicability of
those judgments to the proposed transfer but to no avail.
[5]
In these proceedings the second respondent filed a report stating
that it abided the decision of the Court but submitting that
the
Minister of Justice and Constitutional Development should be cited as
a respondent since the order sought affected the current
practice of
the magistrates court and because the interpretation of s 66 (2) -
(5) was 'beinghallenged'. It was submitted that
there was uncertainty
as to the correct interpretation of s 66 (2) - (5) of the Act inter
alia because the magistrates courts allegedly
do not differentiate
been preferent and non-preferent creditors in granting writs of
attachment in terms of Rule 43 and, further,
that there was
uncertainty as to who determines whether a "claim" is
preferent or not. In this regard the first respondent
pointed out
that the Receiver of Revenue may have a preferent claim unbeknownst
to the court, the sheriff or other creditors. The
first respondent
raised various other related queries and commented on current
practices by the sheriff and magistrates courts
relating to the
extension and upliftment of attachments over immovable property
pursuant to warrants of execution.
[6]
The following comments emanating from the office of the Chief
Registrar of Deeds were also cited:
'The practice in the
deeds registries has always been to interpret s 66 (4) of the
Magistrates' Court Act to all attachments in
cases where the property
at issue was not sold within a 12 month period from the date on which
the attachment was noted in a deeds
registry. The basis of this
practice has been the institutional inability of the deeds registry
to determine the absence of a creditor
whose claim is preferent to
the judgement creditor's claim.'
It
referred to a resolution taken by the registrars of deeds at a
conference held in 2009 which considered inter alia whether s
66 (4)
of the Act referred only to preferent claims in sales in execution
attachments issued by the magistrate's courts or all
sales in
execution attachments issued by the magistrate's courts against
immovable property. The resolution eventually adopted
was that:
The
existing practice must prevail in that either the
attachment must be withdrawn or proof must be submitted that it has
not lapsed
or has been extended.'
The first respondent also
states in his report:
'in
view of the deeds registries' predicament mentioned above, should the
Court find fault with the deeds registries application
of s 66 (4),
the Court is respectfully requested to provide guidance on how to
distinguish between those attachments that lapsed
in cases where
property has not been sold within the 12 month periods and those that
do not.'
THE
ISSUES
[7]
The principal issues in this matter are whether, regard been had to
the provisions of s 66 of the Act, and rule 43, the applicants
are
entitled to an order directing the first respondent to pass transfer
to the immovable property in question. Also at issue are
whether the
responsible Minister should be cited as a respondent and what
guidance, if any, this Court should furnish to the first
respondent
in its interpretation and application of s 66 (4) of the Act.
THE
LAW
[8]
Section 66(2) - (5) of the Act reads as follows:
'(2) No immovable
property which is subject to any claim preferent to that of the
judgment creditor shall be sold in execution unless
-
(a)
the judgment creditor has caused such notice in writing of the
intended sale in execution to be
served personally upon the preferent
creditor as may be prescribed by the rules; or
(b)
the magistrate or an additional magistrate of the district in which
the property is situate has
upon the application of the judgment
creditor and after enquiry into the circumstances of the case,
directed what steps shall be
taken to bring the intended sale to the
notice of the preferent creditor, and those steps have been carried
out, and unless
(c)
the proceeds of the sale are sufficient to satisfy the claim of such
preferent creditor,
in full; or
(d)
the preferent creditor confirms the sale in writing, in which event
he shall be deemed to
have agreed to accept such proceeds in full
settlement of his claim.
(3)
A sale in execution of such immovable property as is referred in ss
(2) shall take place within such period of the date
of attachment and
in such manner as may be provided by the rules.
(4)
If a sale referred to in ss (3) does not take place or the immovable
property concerned is not released from attachment
within a period of
one year from the date of attachment, such attachment shall lapse.
(5)
The court may, upon the application and at the expense of the
judgment creditor, extend the period of one year referred
to in (4)
by further periods of one year each.'
[9]
Magistrates Court rule 43 deals with execution against immovable
property and also makes extensive provision to protect the
interests
of preferent creditors upon the sale in execution of such property.
The rule requires a warrant of execution against
immovable property
to contain a full and complete description of the nature and the
situation thereof to enable it to be traced
and identified by the
sheriff, accompanied by sufficient information to enable the sheriff
to give effect to the provisions of
sub-rule (2).
[10]
Sub-rule (2) provides as follows:
'(2)
(a) The mode of attachment of immovable property shall be by notice
by the sheriff served in like manner as a summons together
with a
copy of the warrant of execution upon the execution debtor as owner
thereof, upon the registrar of deeds or other officer
charged with
the registration of such immovable property, upon all registered
holders of bonds (other than the execution creditor)
registered
against the property attached and, 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 property is
situated.
(b) if
the period of attachment is extended as referred to in s 66(5) of the
Act, notice of such extension shall be given to the
persons referred
to in paragraph (a) in the manner as referred to in that paragraph.'
[11]
The importance which the legislature attaches to the interests of a
preferent creditor where a debtor's immovable property
is sold in
execution, is illustrated by the provisions of the following
sub-rules i.e. -
[11.1] '(3) After
attachment the sheriff shall ascertain and record whether the said
property is subject to any claim preferent
to that of the execution
creditor and, if that be the case, he shall thereupon notify the
execution creditor of the existence of
any such claims to enable the
latter to give notice in terms of s 66(2) of the Act;'
[11.2] sub-rule 6 (b) -
(d) which provide for the execution creditor, after consultation with
the sheriff, to prepare a notice of
sale containing particulars
thereof to be published in a newspaper and in the Government Gazette
prior to the sale and requiring
the sheriff to forward a copy of such
notice to every execution creditor who has lodged a warrant of
execution and to every mortgagee
in respect of the immovable property
whose address is reasonably ascertainable;
[11.3] sub-rule 7(a) and
(b) which require the conditions of safe to be provided to the
sheriff and to every person entitled to
notice of the sale prior
thereto and further that any interested parties may apply to a
judicial officer for a modification of
such conditions of sale;
[11.4] sub-rule 14
(b)-(f) which make detailed provision for the sheriff to distribute
the price received upon the sale in execution
of the property in
accordance with a plan of distribution which he must prepare and
which must ordinarily lie for inspection and
objection in the
sheriff's office for a stipulated per\od after the date of sale;
[11.5] sub-rule 14 (c)
which provides the order of preference for the payment of the claims
of creditors in their legal order of
preference;
[11.6] sub-rule 14 (d)
provides for objections by interested parties to the plan of
distribution which objection can ultimately
be determined by the
court.
[12]
Clearly, rule 43 goes to great lengths to ensure that the interests
of preferent creditors are protected pursuant to the sale
in
execution of immovable property.
[13]
The wording of s 66 (4) - (5) of the Act was considered in September
and Another v Nedcor Bank Limited and Another 2005(1)
SA 500 (C)
where the court comprehensively set out the historical background of
our law and practice relating to the execution
of judgements. The
genesis of s 66 (4) and (5), which were added by Act 63 of 1976,
appear to derive from the report of a Committee
of Inquiry into the
Collection of Debts in Magistrates' Courts in 1970. The court found
that the provisions made in ss 4 and 5
for the lapse and possible
extension of warrants of execution clearly only applied to sales in
execution of immovable property
subject
to any claim preferent to that of the judgment creditor
.
In this regard it found, albeit obiter, that 'immovable property
which is attached but not subject to some other preferent claim
is
thus excluded and still subject to indefinite attachments.' I am in
respectful agreement with that interpretation.
[14]
The court expressed the view, however, that the effect of the new
subsections was illogical in relation to the recommendation
of
the Committee of Inquiry that all judicially attached immovable
property should be released from such attachments after the
lapse
after one year. It expressed the further view that the amendments,
notwithstanding the explanation of the Minister to Parliament
when
the amending legislation was considered, were not in accordance with
the recommendations of the Committee of Inquiry.
[15]
In the circumstances the court held that 'in the view of the obvious
mistakes by the draftsmen' the amendment should be restrictedly
interpreted so as to change the existing law as little as possible
and should not be interpreted in a manner which would preclude
a
creditor to re-attach property which is the subject of some other
preferent claim.
[16]
In the present case the provisions of ss (4) - (6) do not apply and
the warrant of execution obtained by the second applicant
did not
lapse after a year because there was no claim preferent to the second
applicant's claim. In fact it was the only holder
of a preferent
claim over the immovable property. The remaining provisions of s 66
provide no bar to the relief sought by the applicants,
namely, that
the first respondent be directed to pass transfer of the property to
the second applicant.
[17]
Regarding the first respondent's comments and submissions, I can in
the first place see no basis for joining the Minister as
a party to
these proceedings. The first respondent abides the decision of the
court and a reading of its report indicates no quarrel
with any
interpretation of ss (4) -(5), merely the noting of what he regards
as practical difficulties in the implementation of
its provisions.
[18]
It is, furthermore, beyond the scope of this court's duties to offer
advice or 'guidance' to that office in the performance
of its
functions in relation to warrants of execution over immovable
property. Clearly the Registrar of Deeds must permit effect
to be
given to the provisions of ss 66 (2) - (5) which, although they may
be at odds with the recommendations of the Commission
of Inquiry, are
nonetheless clear.
[19]
To the extent that his office may be uncertain in specific instances
as to whether or not it may lawfully pass transfer of
immovable
property pursuant to a sale in execution, there is no doubt good
sense in its seeking clarification from the judgment
creditor, the
sheriff or the transferee as to the possible existence of a creditor
with a claim preferent to that of the execution
creditor and/or the
validity of the warrant of execution. The only observation I would
make in this regard is that nowhere in the
rule 43 or s 66 do 1
detect a duty resting upon the Registrar of Deeds, (obviously, apart
from considering its own records) to
pro-actively ascertain or
determine the existence or ranking of preferent claims over immovable
property.
[20]
There remains the question of whether the first respondent can refuse
to pass transfer of the property on the basis that there
has been a
failure to comply with the requirements of the Constitutional Court
in the Japhta and Gundwana cases.
[21]
In Japhta, s 66(1)(a) of the Magistrate's Court Act was found to
violate s 26 (1) of the Constitution to the extent that it
allowed
execution against the homes of indigent debtors where they lose their
security of tenure. It was held further that the
failure to provide
judicial oversight over sales in execution against immovable property
of judgment debtors in s 66(1)(a) of the
Act was unconstitutional and
invalid. To remedy that defect the section was to be read as though
the words 'A
court, after consideration of all
relevant circumstances may order execution' appear before the words
'against the immovable property
of the party'. In the present case
the warrant of execution was issued by the magistrate and there is
therefore no question of
there being a lack of judicial oversight.
[22]
In Gundwana it was held that the Registrar of the High Court was not
constitutionally competent to make execution orders when
granting
default judgment in terms of Rule 31(5)(3) of the Rules of the High
Court. The court noted that the effect of this order
had been
overtaken by the amendment to Rule 46(1) of the High Court Rules with
effect from 24 December 2010. That rule now provides
that no writ of
execution against the immovable property of any judgment debtor shall
issue until, inter alia, such property shall
have been declared to be
specially executable by the court or, where the judgment is taken by
default and the property is the primary
residence of the judgement
debtor, the court has considered all the relevant circumstances and
orders execution against such property.
[23]
Clearly the Gundwana decision does not bear upon the facts of the
present matter since the proceedings emanated from the Magistrate's
Court where there was judicial oversight prior to the granting of the
warrant of execution.
[24]
In the circumstances there is no reason why the applicants should not
be afforded the relief which they seek and the following
order is
made:
1)
First respondent is ordered to pass transfer by the first applicant
to the second applicant of certain
immovable property known as:
1.1
Section No. 4 as shown and more fully described on the Sectional Plan
no SS177/1981 in the scheme known as BRACKVIEW in
respect of the land
and buildings, situate at BRACKENFELL, in the City of Cape Town, Cape
Division, Western Cape Province, of which
section the floor area
according to the sectional plan is 30 square metres in extent; and
1.2 an undivided
share in the common property in the scheme appointed to the said
section in accordance with the participation
quota as endorsed in the
said sectional plan;
held
by the second respondent, identity number by Deed of Transfer no
ST28039/2005.
L.
J. BOZALEK, J
JUDGE
OF THE HIGH COURT