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IN THE HIGH COURT OF SOUTH AFRICA

(SOUTH EASTERN CAPE LOCAL DIVISION)

Case no: 2508/07

Date heard: 6.12.2007

Date delivered: 23.1.2008

In the matter between:

XHANTI SINGAPI Applicant

vs

ANDILE BEN MAZWI 1^st Respondent

GRANVILLE MALGAS 2^nd Respondent

SEARLE APRIL 3^rd Respondent

ABM AUCTIONEERS 4^th Respondent

NEDBANK LIMITED 5^th Respondent

MINISTER OF LAND AFFAIRS 6^th Respondent

JUDGMENT

A.R. ERASMUS, J:

[1] On 7 November 2007 the applicant filed an urgent application for an order in the following terms:

‘1. That a rule nisi do issue calling on the respondents to show cause why on the 1^st of December 2007 an order should not be made in the following terms:

1. Directing that the applicant’s non-compliance with the rules of this Honourable Court in reference to compliance with time limits and giving of notice be condoned in view of the urgency of the matter.

2. That the first to third respondents hand over the keys of the house situate at 20, 4^th Avenue, St Georges Strand, Erf 252 Wells Estate, Port Elizabeth (the property) to the applicant;

3. That the first to third respondents restore applicant’s peaceful and undisturbed possession of the property to the applicant;

4. That the sixth respondent be interdicted and restrained from registering the property in the name of the first to third respondents or their nominee pending the final determination of the matter under 1.5;

5. That the first to fourth respondents be interdicted and restrained from proceeding with the auction of the property on the 8^th November 2007 pending the final determination of the rescission of judgment, setting aside the warrant of execution and the sale in execution under case number 3025/06;

6. That the warrant of execution be stayed pending the final determination of the matter and the applicant be allowed to remain in the property.

2. That the provisions of paragraphs 1.2 to 1.6 hereof operate as

interim relief pending the finalisation of the present proceedings.

2. That the respondents be directed to pay the costs of the application only if they oppose it.’

[2] On 8 November 2007 Nepgen J issued an order by agreement between the parties. The following paragraphs thereof are relevant to the hearing before me:

‘1. That the auction will go ahead at 10h00 on the 8^th November 2007, subject to a condition that the property will not be transferred to any person pending the final determination in this matter.

2. That the applicant be granted access to the property to collect his movable property that is as the property.’

and

‘7. That the application will be heard on the 6^th December 2007.

8. That the costs of this application be reserved for determination on the return date.’

Paragraphs 3 to 6 placed the parties on terms in regard to the filing of affidavits and heads of arguments.

[3] The applicant filed a supporting affidavit. The first to fourth respondents, only, filed notice of opposition. The main answering affidavit is by the first respondent, confirmed by second and third respondents. (Where convenient, I refer to these three respondents collectively as ‘the respondents’.)

[4] The founding affidavit is to the following effect. In April 2004, the applicant bought the property which is the subject of the application (‘the property’). He financed the purchase by means of a loan obtained from the fifth respondent in the amount of R351 000.00. A bond over the property was registered in favour of the fifth respondent. He subsequently registered a further bond in favour of the fifth respondent in respect of a loan in the amount of R650 000.00 obtained to finance the conversion of the property into a bed-and-breakfast commercial establishment. He effected payments of his obligations but from time to time fell in arrears. His problem was that his biggest client in the bed-and-breakfast business, the government, was regularly late in paying their account. In September 2006 the fifth respondent handed over his account to its attorneys who issued summons against him. He contacted a representative of the fifth respondent with whom he made arrangements for an immediate payment of an amount and an increase in his monthly payments. In February 2007 he was served with a document from the fifth respondent advising him that the property was to be sold in order to recover the debt due to the fifth respondent. He spoke to a representative of the fifth respondent (the same person as before) who advised him of the amount of the arrears which he had to pay in order to stop the sale. He paid this amount and the sale was cancelled. He made further payments but could not pay in August and September 2007. He was informed by a friend that his property was being auctioned. He contacted the fifth respondent’s attorneys who advised him that the property had been sold. They also told him that when they advertised the sale he was in arrears only for the month of August. He ascertained that the property had been sold to the respondents. He never received a notice of sale. After they had bought the property, the respondents unlawfully evicted his staff from the house as well as the guests who were there at the time. They changed all the locks to the building, as a result of which he had no access to the establishment. His personal belongings including his clothes and other personal documents, as well as his vehicle, were locked in the premises.

[5] He and his attorneys immediately commenced negotiations with the three respondents by offering to pay them back the purchase price of the property which was an amount R700 100.00 together with an additional R50 000.00 for each of them. They made a counter offer in the amount of R1 700.00, he says. (I think that figure should be R1 700 000.00.) After further negotiations members of his family finally accepted the offer and arranged to buy the property on his behalf. A deed of sale was signed and forwarded to the respondents for their acceptance.

[6] Whilst these negotiations were continuing, the applicant discovered that the first to third respondents had advertised in the Herald newspaper of 27 October 2007 that the property was to be put up for sale the on 8 November 2007. The sale was to be conducted by the fourth respondent. He states that the respondents had never advised him, nor members of his family, that the property would be sold by public auction until 6 November 2007.

[7] The applicant concluded his affidavit with the following averments:

'21. I submit that my rights to housing entrenched in terms of section 25 of the Constitution have been violated for the following reasons.

21.1 After the sale in execution the first to third respondents changed the locks in the property and thereby denied me, my staff and guests access to the property thus evicting me from my property without an order of court made after considering all the relevant circumstances of my case.

21.2 The judgment that ultimately resulted in me being denied access to adequate housing and more specifically, declaring my house executable, was granted by the Registrar and not by a Judge, after considering all the relevant circumstances as envisaged by the constitution.'

[8] The applicant filed a supplementary affidavit. Therein he averred that he had been effectively evicted from the property by the respondents without a court order as is required in terms of the law and the Constitution. Before the eviction he was in peaceful undisturbed possession of the property. He further states that he intended to challenge the judgment unlawfully taken against him by the fifth respondent by applying for rescission of judgment. He would do so before the return date of the rule nisi.

[9] The first respondent’s answering affidavit is to the following effect. He avers that the respondents had acquired the property at a lawful sale in execution pursuant to a judgment obtained by the fifth respondent against the applicant for failing to effect proper and timeous payment of his bond repayments towards the fifth respondent. He states that the applicant had never utilized the property for a dwelling or residence, but had renovated it for the purposes of operating the business of a bed-and-breakfast. After the sale he and second respondent attended the property several times. At no time were there staff or guests present. There were however furniture and a vehicle. The building was locked and the respondents had to engage the services of a locksmith to change the locks. He admits that there were negotiations between them and the applicant for the resale to him of the property.

[10] The applicant’s need for prayer 1.5 has fallen away by virtue of the order of Nepgen J on 8 November 2007. Presumably the auction has gone ahead and the purchasers are awaiting registration of transfer. Counsel for the respondents submits that for the applicant to succeed in obtaining prayers 1.4 and 1.6 he must show that he has a prima facie case in the proceedings to be instituted for rescission. This is accepted by counsel for the applicant. It is not necessary that the cause of action be stated with absolute precision. It must however by clear enough to inform the respondents and the court of the nature of the proceedings in order that some assessment can be made of the prospects of success.

[11] In order to succeed in the application for rescission, the applicant will have to show good cause for the setting aside of the default judgment (rule 31 (2) (b)). Good cause is a wide concept encompassing any fact or circumstance weighing in favour of rescission, balanced against any counter factor or factors.

[12] According to the return of service the summons issued by the fifth respondent was served on the applicant by fixing a copy thereof to the main door at the building on the domicilium citandi et executandi chosen by the applicant. The sheriff noted that the premises were locked and that there was no responsible person at the said address on whom documents could be served. It is common cause that the notice of sale did not reach the applicant. There is nothing to gainsay the applicant’s averments that the first he heard of the matter was after the sale in execution.

[13] Section 25 of the Constitution (Constitution of the Republic of South Africa Act 108 of 1996) decrees that no one may be deprived of property except in terms of law of general application. Depriving a person of his or her immovable property is a particularly drastic action. This is recognised in the common law principle that a judgment creditor shall proceed against the movable property of the debtor before taking out a writ against his or her immovable property. This principle is embraced in s 66 (1)(a) of the Magistrates’ Courts Act 32 of 1944, the relevant portions whereof provided as follows prior to its amendment:

'Whenever a court gives judgment for the payment of money … such judgment, in case of failure to pay such money forthwith … shall be enforceable by execution against the movable property and, if there is not found sufficient movable property to satisfy the judgment …, or the court, on good cause shown, so orders, then against the immovable property of the party against whom such judgment has been given …'

In High Court procedure the principle is embraced in rule 45 (1), the relevant portions whereof read as follows:

'The party in whose favour any judgment of the court has been pronounced may … sue out of the office of the registrar one or more writs for execution thereof … Provided that, except where immovable property has been specially declared executable by the court or … by the registrar, no such process shall issue against the immovable property of any person until a return shall have been made of any process which may have been issued against his movable property, and the registrar perceives therefrom that the said person has not sufficient movable property to satisfy the writ.'

The principle is short-circuited where the court or registrar granting judgment declares the property to be executable. The court or registrar should however not grant such order as a matter of course. In Jafhta vs Schoeman and others; Van Rooysen vs Stols and others [2004] ZACC 25; 2005 (2) SA 140 (CC), the Constitutional Court held that it was clear that s 66 (1)(a) of the Magistrates’ Courts Act was so broad that it permitted sales in execution without judicial intervention even where they were unjustifiable, and as such was unconstitutional and invalid. To remedy that defect the section was to be read as though the words 'a court, after consideration of all the relevant circumstances, may order execution' appear before the words 'against immovable property of the party'. (See too Standard Bank of South Africa Ltd vs Saunderson and others 2006 (2) SA 264 (SCA).) As far as I can ascertain, rule 45 (1) has not as yet been amended to conform with the judgment in Jaftha. Arguably therefore, it too may be unconstitutional. At any rate, it does not appear that the registrar in granting judgment against the applicant considered all the relevant facts and circumstances.

[14] There were present a number of circumstances that may have persuaded the registrar not to declare the property executable. To start with there was no personal service of the summons. Further, the summons does not indicate the actual amount that the debtor was in arrears. It is for the full amount of R1 024 548.72 in terms of an acceleration clause. (It is not denied that the applicant was in arrears only one month when the summons was issued). The bond was for a large amount, indicating that the debtor is probably a person of some means. In all probability he would be in possession of some considerable movable property. In the rescission application, the court could therefore well hold that the registrar should not have ordered the property to be executable. Furthermore, fifth respondent had in the past reached accommodation with the applicant when he fell in arrears with his payment. The respondent had in the past paid the fifth respondent large amounts on account. These considerations, taken together, could well form the basis for good cause to have the judgment rescinded in terms of rule 31 (2)(b). In the circumstances I find that the applicant has made out a prima facie to have the judgment rescinded and the warrant of execution cancelled. That will than remove the legal basis for the sale in execution.

[15] Counsel for the respondents submits that any success that the applicant may have against the fifth respondent will not avail him against the respondents who had purchased in good faith and without notice of any defect (Sookdeyi and others vs Sahadeo and others 1952 (4) SA 568 (A) 571-2; Brummer vs Gorfil Brothers Investments (Pty) Ltd en andere 1999 (3) SA 389 (SCA)).

[16] However, inasmuch as registration of transfer of the property has not yet been effected, the fact that the respondents purchased the property at a sale in execution does not constitute an absolute bar to the recovery thereof by the applicant. The common law position is reflected in s 70 of the Magistrates’ Courts Act 32 of 1944:

‘A sale in execution by the messenger shall not, in a case of moveable property after delivery thereof or in the case of immovable property after the registration of transfer, be liable to be impeached as against the purchaser in good faith and without notice of any defect.’

(My emphasis)

[17] I find therefore that the applicant has shown that it is possible that he might succeed in having the default judgment and the writ of execution, as well as the sale in execution, set aside. It does not follow that he is for that reason alone entitled to the interdict which he seeks in prayers 1.4 and 1.6.

[18] The applicant seeks to freeze the position regarding the property pending the determination of the application for rescission. Such interlocutory proceedings are ancillary to the main proceedings and are usually designed to prevent the ultimate judgment being rendered nugatory. The relief is however not confined to such circumstances and may be granted where the main proceedings could otherwise be prejudiced, or the applicant be prejudiced in some way in recovering his property should he be successful in those proceedings. The court has a wide discretion to issue such order where necessary or fitting to promote the interests of justice in the particular matter. In the present matter I am satisfied that it is fitting that the status quo be preserved as per prayers 1.4 and 1.6 of the notice of motion.

[19] Prayers 1.2 and 1.3 stand on a different basis. It is here the applicant’s case that the respondents gained possession of the property in an unlawful manner. He contends that they took possession of the property and changed the locks on the building against his wishes without an order of court. They thereby deprived his of his peaceful and undisturbed possession of the property.

[20] There is some factual dispute as to whether the applicant was in occupation of the property when the respondents took possession thereof. At the time he was running a bed-and-breakfast establishment on the premises. Although he did not live there, he was in possession of the premises and exercised control thereof himself and through his employees. These averments cannot be gainsaid by the respondents. The fact that there were no members of staff or guests present when the respondents visited the premises is not destructive of the applicant’s averments as to his use and occupation of the premises. First respondent moreover admits that there was furniture as well as a vehicle on the premises. The fact that the respondents perhaps believed that the applicant had vacated the property is irrelevant. Intention is not an element of the mandament van spolie. The fact of unlawful dispossession constitutes spoliation.

[21] In entering into negotiations with the respondents the applicant did not forfeit his right to reinstatement. These negotiations where not inconsistent with him exercising his possessory rights and remedies. It is of course expected of an applicant in spoliation proceedings to take immediate steps to be reinstated in possession. Should he delay unduly the court could oblige him to institute action procedure (C.G. van der Merwe Sakereg 2^nd ed 22). The applicant delayed about three weeks in bringing this application. This delay was not unduly long and is explained by the negotiations which the applicant entered into with the respondents.

[22] I find that the applicant has made out a case of spoliation against the respondents.

[23] In the result, the following orders issue:

(a)(i) that the Registrar of Deeds be interdicted and restrained from registering the property situate at 4^th Avenue, St Georges’ Strand, Erf 252 Wells Estate (the property) in the names of the first, second and third respondents pending the final determination of the application to be brought for the rescission of judgment in case no 3025/06;

(ii) that the warrant of execution issued in case no 3025/06 be stayed pending the final determination of the application to be brought for the rescission of judgment in that matter;

(b)(i) that the first, second and third respondents restore to the applicant the possession of the property;

(ii) that the first, second and third respondents hand over to the applicant the keys of the property;

3. that the first, second and third respondents pay the applicant’s costs.

____________________________

A.R. ERASMUS

JUDGE OF THE HIGH COURT

DATE: 23 January 2008

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