Nyadeni and Another v FCNP General Interprise (Pty) Ltd and Another (A325/19) [2020] ZAGPPHC 421 (18 August 2020)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED: NO

CASE NO: A325/19

In the matter between:

ZEZE ALFRED NYANDENI

1ST APPELLANT

MANANA GLADYS NYANDENI

2ND APPELLANT

and

FCNP GENERAL INTERPRISE (PTY) LTD

1ST RESPONDENT

CITY OF TSWANE METROLPOLITAN

2ND RESPONDENT

MUNICIPALITY AUTHORITY

JUDGMENT

Van der Schyff J

Introduction

[1] This appeal is considered during the National State of Disaster declared by the State President in terms of the Disaster Management Act, No 57 of 2002 and the ensuing extended Covid-19 national lockdown. The parties were provided with the opportunity to submit a motivated request for argument to be heard on a virtual platform. No such request was received. The appeal is decided on the papers filed of record after the respective parties were invited to file supplementary heads of argument.

[2] The appellant brought an appeal against the whole of the judgment and order handed down by the learned magistrate Ramahanelo in the magistrate’s court for the district of Tshwane North, held at Pretoria-North, on 18 September 2019.

[3] The court a quo granted an order authorising the eviction of the appellants and all those that occupy the property, 7 Palm Street, The Orchards,

Pretoria, also known as Portion 10 Erf 31 The Orchards, hereafter “the property”, through them. It is this order that is appealed.

[4] It is trite that a court on appeal, will only interfere with the order granted by the court a quo if it is of the view that the court a quo erred in fact or in law.

Grounds of appeal

[5] The appellants contend in their notice to appeal that the trial court erred:

i. In holding that the house was sold in execution as the appellant’s application for the rescission of the sale is before the Gauteng High Court Division;

ii. In disregarding the arguments of the appellants that the matter of staying of eviction was before the Gauteng High Court Division. The launching of the application for eviction by the first respondent was cutting corners and it amounted to forum shopping;

iii. In disregarding the argument of the appellants that the application for rescission of the sale in execution of the default judgment had not been opposed by the Standard Bank and the Sheriff. The approach which should have been taken by the learned magistrate was to stay the eviction application pending the finalization of the unopposed rescission application;

iv. In finding that the appellants were unlawful occupiers and there is no agreement of lease;

v. In granting the eviction while there is a pending unopposed rescission application before the High Court.

The eviction application

[6] The eviction application was launched by the first respondent. For purposes of clarity, the first respondent, who was the applicant in the eviction application, is referred to as the first respondent throughout this judgment. The appellants who were the respondents in the eviction application are referred to as the appellants.

[7] The following factual context is set out in the founding affidavit to the eviction application:

i. The first respondent purchased the property on a Sale in execution on 26 April 2019.

ii. On 28 April 2019 a representative of the first respondent, and the deponent to the founding affidavit, delivered a letter to the first appellant informing the appellants that the property was purchased on a sale in execution, and demanded occupation. The first appellant gave a verbal undertaking that the property would be vacated by 31 May 2019.

iii. The property was registered in the name of the first respondent on 31 May 2019. A letter to this effect was handed to the appellants on 2 June 2019. The appellants allegedly agreed to vacate the property on 5 June 2019. On 5 June 2019 the first appellant informed the first respondent that they would not vacate the property.

iv. The first respondent is not aware of children, elderly or disabled people occupying the property.

v. The appellants occupy the property without the first respondents consent.

vi. A notice in terms of section 4(2) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, No. 19 of 1988 was authorised by the Court and served on the appellants in accordance with the court order.

[8] In their answering affidavit, the appellants stated that:

i. They reside at 532 Zungu Street, Endulweni section, Tembisa, 1632.

ii. The first appellant became aware of a default judgment against his name during September 2017 when he was about to purchase a motor vehicle.

iii. He approached a credit bureau and discovered that default judgment was taken against him on 22 June 2015 and the second appellant in respect of the property which is the subject matter of the litigation.

iv. Problembond was instructed to investigate how default judgment was obtained without the appellants’ knowledge thereof. The appellants were informed that the court file contained a return of service indicating that summons was served on ‘Lucky Nyandeni”. The appellants inquired from Lucky Nyandeni whether he received the summons and Lucky denied that he received the summons.

v. The rescission application was served on 27/06/2019, 28/06/2019 and 02/07/2019. The appellants seek a rescission of the default judgment on the basis that default judgment was granted in their absence. They also seek an order (a) cancelling, reversing or setting aside the transfer of the immovable property; (b) directing the mortgage bond to be re-registered, (c) staying the eviction pending the finalisation of the rescission application, and (e) costs.

vi. Despite the rescission application being served on the first respondent, the said respondent’s answering affidavit is long overdue, although a notice of intention to defend was filed.

vii. Because the rescission application contains a prayer to the effect that the application for eviction be stayed, there is litigation pending between the parties on the same cause of action and in respect of the same subject matter. As a result, the magistrate’s court is not competent to grant an order for the appellants’ eviction. The first respondent was forum shopping.

viii. The appellant denied that he agreed to vacate the property at any stage. The property was sold in error after the judge granted the order by error in the appellants’ absence.

ix. The rescission application is attached to the appellants’ answering affidavit. The application is brought in terms of Rule 42 of the Uniform Rules of Court. The notice of motion is dated 25 June 2019. The appellants’ application for rescission is solely based on the fact that the summons was not served on the appellants. Lucky Nyandeni, who seems to be their son, denies that he received the summons. They argued that if the court who granted the default judgment and declared the property executable knew that the appellants did not receive the summons the order would not have been granted. They aver that they have been up to date with the bond payments.

[9] The first respondent stated in reply:

i. The appellants’ failure to institute a rescission application timeously after they became aware of the existence of the default

judgments misled the first respondent in believing that the judgment taken against the appellants were proper and not erroneously sought or granted, and the subsequent sale in execution lawful and valid. The appellants are estopped from enforcing any rights which they might have had in the property.

ii. The Sheriffs return of service is prima facie proof that Lucky Nyandeni received the summons. The appellants’ admission that Lucky Nyandeni resides on the property is sufficient for the court to find on a balance of probabilities that the Sheriff visited the property and served the summons on the said Lucky Nyandeni- a person who would otherwise have been unknown to the Sheriff.

iii. The appellants failed to provide proof to the effect that their loan with standard Bank was not in arrears. The first respondent had to pay the arrear rates and taxes in relation to the property in the amount of R87 294.63 to the City of Tshwane.

iv. An answering affidavit with a substantive application for condonation was filed in the rescission application, albeit 7 days late.

v. The eviction application was issued by the court on 24 June 2019 although it was served on 11 July 2019. The rescission application was received on 28 June 2019

[10] The learned magistrate found the following:

i. The appellants were aware of the sale of execution, and that their property was sold;

ii. The respondents are elderly people but they have submitted that they are not living in the property;

iii. It is just and equitable that the application for conviction be granted.

[11] The following written reasons for the judgment were provided by the learned magistrate during October 2019:

i. The property in question was sold in execution;

ii. The first respondent bought the house when the house was auctioned;

iii. No lease agreement exists between the parties;

iv. In relation to the first respondent the appellants were unlawful occupiers;

v. According to the appellants’ affidavit they stay in Tembisa.

Heads of argument

(i) Appellants

[12] The appellant’s argument as contained in their heads of argument amounts to the following:

i. One of the prayers in the application for rescission is that any pending eviction application be stayed pending the finalisation of the application for rescission of the default judgment.

ii. Counsel submitted that the application for rescission of the default judgment was launched on 22 June 2015, and that Standard Bank has not filed any answering affidavit in that application. In any event, the argument goes, there is no proper opposition to the rescission application.

iii. Because the issue of eviction was dealt with in the rescission application, the first respondent, in continuing with the eviction application before the magistrate’s court was forum shopping. It was an abuse of process and opportunistic.

iv. The magistrate’s court should have postponed the eviction application pending the finalisation of the rescission application;

v. The first respondent does not have locus standi.

(ii) First respondent

[13] The first respondent’s argument as set out in its heads of argument is that:

i. The first respondent is the registered owner of the property, after having bought it at a sale in execution. It is extremely and severely prejudiced by the appellants’ conduct;

ii. The requirements of section 4 of the Prevention of Illegal Eviction from and Occupation of Land Act, 1998, were complied with;

iii. The appellants and any person occupying through them, occupy the property without any express or tacit agreement;

iv. The fact that a rescission application was filed is not a defence that can be advanced after the property was registered in the name of the first respondent;

v. An order can be enforced until it’s execution is stayed or the order is rescinded;

vi. The lis pendens argument is without merit since the one application is for eviction and the other for rescission. The defence that the judgment was granted in error does not hold merit. The Sheriff’s return of service indicates that the summons was served on the appellants’

son;

vii. The rescission application was launched long after the sale in execution was held and transfer of the property effected;

viii. The eviction application was first in time, the rescission application followed;

ix. There is no defence provided in the rescission application;

x. The first respondent and Standard Bank is opposing the rescission application;

xi. The first respondent raised the defences of estoppel, and that the application for rescission was erroneously brought in terms of Rule 42;

xii. The appellants are not staying on the property;

xiii. In their heads of argument, the appellants erroneously aver that that the rescission application was launched on 22 June 2015, a submission supported by the documents filed of record wherein it is confirmed that the notice of motion and founding affidavit to the rescission application were signed on 25 June 2019, almost 19 months after the appellants, on their version, became aware of the default judgment granted against them, and after the sale in execution occurred and the transfer of the property to the first respondent was effected.

Evaluation

[14] The crisp question before the court, is whether the learned magistrate was correct when he held that the first respondent, the bona fide purchaser of immovable property at a sale in execution, could evict the appellants and all who occupy the property through them despite the appellant’s having launched a rescission application wherein they inter alia seek relief that any pending eviction application be stayed.

[15] If the first ground of appeal is considered, it seems as if the appellants are submitting that the auction at which the property was sold cannot be regarded as a ‘sale in execution’ because the appellant’s application for the rescission of the sale is before the Gauteng High Court. This ground of appeal reads: “The learned magistrate erred in holding that the house was sold in execution as the appellants’ application for the rescission of the sale is before the Gauteng High Court Division.’

[16] It is undisputed that the property was sold in execution, and transferred to the first respondent, a bona fide purchaser, before the appellants instituted their rescission application. The first respondent’s position as a bona fide purchaser was never placed in dispute by the appellants.

[17] In deciding whether the learned magistrate erred in granting the eviction application, the first question to be answered is whether

the registration of transfer into the name of the innocent purchaser, the first respondent, is impeachable. The law is clear regarding the setting aside of registrations of transfer of immovable property to bona fide purchasers at sales in execution. Van der Linde J, stated in Nkutha and Another v Standard Bank of South Africa Limited and Others (23213/2011) [2017] ZAGPJHC 282 (11 August 2017) paras [16] and [17];

“In principle, this can be achieved – but only if the sale in execution itself can be impugned as having conferred on the sheriff

no legal power to effect transfer of the property to the purchaser. And that would only have been the case if the peremptory statutory

requirements relating to the sale in execution had not been complied with, or if the underlying default judgment was a nullity ab initio and thus conferred, ex tunc, no power on the sheriff to have conducted the sale in execution.

[17] If these circumstances pertain, and if therefore the real agreement (also known as the transferring agreement) whereby the transferor intended to transfer [of] ownership and the transferee in turn intended to receive ownership is void, then despite the reigning abstract theory in our law of the passing of ownership also of immovable property, ownership will not have passed and may be vindicated right down the line of the subsequent successive innocent purchasers.”

[18] The question is thus, when is a default judgment void ab initio? Van der Linde J provided the answer in para [18] of the Nkutha judgment:

“… this would be the case where there was no power to have granted it in the first place, such as where service of the process did not occur in accordance with the rules of court. The effect of the rescission of such a judgment, which would operate ex tunc, would therefore be different from the rescission of a judgment where, although service of the summons had occurred in accordance with the rules of court, the summons did not, as a fact, come to the attention of the defendant. In such a case, a rescission would operate pro nunc. This is because there was a power to have granted the default judgment, it was not erroneously granted.”

[19] Rule 4(1)(a)(ii) of the Uniform Rules of Court provides that the service of any process of the court shall be effected by the sheriff by leaving a copy thereof at the place of residence of the said person with the person apparently in charge of the premises at the time of delivery, being a person apparently not less than sixteen years of age. Rule 4(1)(a)(iv) provides that if the person to be served has a chosen domicilium citandi, the document may be served by leaving a copy thereof at the domicilium so chosen. In casu the signed return of service reflects that the combined summons was served on Lucky Nyandeni, “SON apparently a responsible person and apparently not less than 16 years of age and in control of and at the chosen domicilium citandi et executandi of Mr Zeze Alfred Nyandeni at ...”

[20] The appellants did not dispute that they have a son Lucky Nyandeni – to the contrary the first appellant stated that his son Lucky disputes that he ever received such a summons, and Lucky Nyandeni’s confirmatory affidavit is attached to the papers before the court. I cannot but agree with the first respondent’s argument that it is so unlikely that the Sheriff would accurately fabricate information of this nature that Lucky Nyandeni’s bare denial of receipt can be disregarded. It is in addition not denied that service occurred at the appellants’ chosen domicilium address.

[21] No proper case has been made out before the court a quo that service of the summons was not effected in accordance with the rules of court. Thus, even if the default judgment is rescinded in future, the rescission will operate pro nunc. The High Court did not grant the default judgment erroneously.

[22] The sale in execution took place on 26 April 2019 and the property was subsequently transferred into the name of the bona fide first respondent. It is not suggested that there was any error in the process preceding the execution itself. The appellants’ case is founded on the summons not having come to their attention. I have already found that the service of the summons was in accordance with the Rules of Court in consequence of which the default judgment was not granted without there having been any power to give it. It was not erroneously granted, and the sale in execution itself is unimpeachable.

[23] Even if the default judgment is eventually rescinded, the judgment is not a nullity ab initio and it has legal effect as long as it stands. Viewed from the perspective of the passing of ownership, the sale in execution conferred good title on the first respondent.

[24] On the papers filed before the court, two things are evident. The first is that the appellant’s counsel erred when he argued that the rescission application was instituted on 22 June 2015. Although the copy of the rescission application filed as an annexure to the answering affidavit to the eviction application does not have a date stamp from the registrar of the court indicating on which date it was issued, the notice of motion as well as the founding affidavit attached in support thereof, is dated 25 June 2019.

[25] The second is, that the first respondent’s ex parte notice of motion in terms of section 4(2) of the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act, No 19 of 1998, dated 21 June 2019 and carries a date stamp of the Pretoria North magistrate’s court, of 24 June 2019. The eviction application was thus brought prior in time. The appellant was well aware of a pending eviction application when the application for rescission was drafted, hence the inclusion of prayer 4 seeking that any pending eviction application be stayed. The eviction application was instituted before the rescission application and if the appellants wanted to stay the eviction application pending the finalisation of the rescission application, they had to approach the High Court on an urgent basis seeking such relief.

[26] As a result, it cannot be said that the learned magistrate erred when he granted the eviction order.

[27] In the event that the appellants succeed with their rescission application, and eventually with their defence against Standard Bank’s

claim, their remedy would be to claim damages from Standard Bank.

[28] The first respondent’s counsel argued for a punitive costs order to be granted. After considering the matter there is no reason to deviate from the general rule pertaining to costs namely that success carries costs.

ORDER

In light of the above the following order is made:

1. The appeal is dismissed with costs.

E van der Schyff

Judge of the High Court

I agree

V Nqumse

Acting Judge of the High Court

Counsel for the appellants:

Adv F Phamba

Instructed by:

Tlou Bangiswanu Attorneys

Counsel for the respondent:

Adv J Vorster

Instructed by:

MD Mitchell Attorneys

Date of the hearing:

13 August 2020

Delivered:

18 August 2020