Pienaar NO v Land and Agricultural Bank of South Africa and Others (2279/10) [2011] ZAECGHC 71 (20 October 2011)

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE, GRAHAMSTOWN)

CASE NO: 2279/10

Heard on: 14 October 2010

Delivered on: 20 October 2011

In the matter between:

ANDRIES JACOBUS PIENAAR NO …..................................................APPLICANT

and

LAND AND AGRICULTURAL BANK OF

SOUTH AFRICA ….....................................................................FIRST RESPODENT

SHERIFF FOR THE DISTRICT OF COLESBERG ….........SECOND RESPONDENT

THOMAS JOHANNES VAN DER WALT …...........................THIRD RESPONDENT

REGISTRAR OF DEEDS: CAPE TOWN …........................FOURTH RESPONDENT

JUDGMENT

Makaula J:

A. Introduction:

[1] The applicant brought an application utilizing Rule 6 (12) of the Uniform Rules of Court seeking an order in the following terms:

“2. That a rule nisi do issue in terms whereof the Respondents are called upon to show cause, if any, in this Court on 9 September 2010;

2.1 why the Writ of Execution issued by the Registrar on the 10th July 2008 under Case No: 683/2000, a copy of which is annexed hereto marked “A”, should not be set aside;

2.2 why the subsequent attachment made in execution thereof on 8th September 2008 and in respect of:

2.2.1 Portion 1 of the farm Hughdale No 161 in the Division of Colesberg: in extent 1624’1891 hectares:

2.2.2 Remainder of the farm “New Klipfontein” in the Division of Colesberg: in extent 2681’3039 hectares:

should not be set aside:

2.3 why the sale [in execution] to the Third Respondent held on the 22nd July 2010 and in respect of:

2.3.1 Portion 1 of the farm “Hughdale No 161” in the Division of Colesberg: in extent 1624’1891 hectares:

should not be set aside

2.4 why the Fourth Respondent should, pending the outcome of this application, not be interdicted from transferring and registering title in respect of:

2.4.1 Portion 1 of the farm Hughdale No 161 in the Division of Colesberg: in extent 1624’1891 hectare:

to the Third Respondent.

3. That the order in terms of paragraph 2.4 supra operate as an interim interdict pending the outcome of this application;

4. That the First Respondent pays the costs of the application and the remaining Respondents do so, only in the event of them opposing it;

5. Such further or alternative relief as the above Honourable Court way award.”

[2] The first respondent (respondent) opposed the application.

B. ­Parties:

[3] I shall refer to the parties as they appear in the founding affidavit.

[4] The applicant, Deutz Museum Trust is a family business trust registered by the Master of the High Court in 1996 and of which Sofia Retief Pienaar, Derick Kleynhans and Willem George Wehlburg Eckard are the other trustees. The Trust, being represented by Andries Jacobus Pienaar who is referred to as an adult farmer of the farm Ebenhaeser, Colesberg, and who avers that he has been duly authorised by the trustees of the Trust to depose to an affidavit herein, sues.

[5] The first respondent is the Land and Agricultural Bank of South Africa which is a body corporate endowed with juristic personality and, in terms of Section (2) of the Land and Agricultural Development Bank Act 15 of 2002, is capable of suing and being sued. It has as its principal place of business, within the area of jurisdiction of this Court, an address at No 51 Newton Street, Newton Park, Port Elizabeth.

[6] The second respondent is the Sheriff for the District of Colesberg, duly appointed in terms of Section 2 of the Sheriff’s Act 90 of 1986 by the Minister of Justice and having his offices at Phillipolies, Free State.

[7] The third respondent is Thomas Johannes Van Der Walt, an adult male person who resides at Klipfontein, Noupoort.

[8] The fourth respondent is the Registrar of Deeds: Cape Town, an official duly appointed by the Minister in terms of Section 2 (1) (b) of Act 47 of 1937 with the powers and duties specified in Sections 3 and 4 of the Act, who is vested with the power to attest and execute registered deeds of transfer of land.

C. Background facts:

[9] The following facts are common cause and, if not so, the dispute between the parties is of no consequence.

[10] During 1984 the applicant secured a loan from the first respondent for an amount of R184 000.00. The terms of repayment were 24 (twenty four) equal yearly instalments of R25 410.00 together with a final instalment consisting of the balance of capital then owing together with interest.

[11] The loan was secured by registering a mortgage bond over the properties referred to in paragraphs 2.2.1 and 2.2.2 of the notice of motion.

[12] In May 1993 the applicant further secured a loan from the first respondent for an amount of R230 000.00. A second mortgage bond was registered over the farms referred to above. The terms of repayment in respect of the second loan were 14 (fourteen) equal yearly instalments of R44 570.00 each together with a final instalment consisting of the balance of capital then owing together with interest thereof.

[13] On or about March 1998 the Deutz Museum Trust was substituted as mortgagee in the stead of the applicant hereof.

[14] During 1999 and for reasons best known to the applicant, the latter failed to meet the bond repayments required. This led to the first respondent issuing summons on 14 June 2000 for the repayment of the outstanding balances of loans which were then stated as R223 065.30 as at 15 December 1999 in respect of the first loan, and R272 868.20 as at 15 May 2000 in respect of the second loan. On 1 February 2001, the first respondent obtained summary judgment without opposition against the applicant.

[15] For various reasons the applicant decided to bring an application for rescission of the summary judgment on 4 October 2005 which application was dismissed. The applicant then brought an application for leave to appeal which was dismissed on 30 March 2007. Subsequent thereto the applicant then petitioned the Supreme Court of Appeals for leave to appeal which was also dismissed on 16 July 2007.

[16] On the 10th July 2008, the first respondent issued a writ which was served on the applicant on the 8th September 2008.

[17] On 8 of September 2008, the second respondent completed a notice of attachment of the movable property.

[18] On 9 July 2010, a notice of sale was advertised in the Government Gazette scheduling the sale for the 22nd July 2010.

[19] On the 22nd July 2010, the applicant brought an application to stop the sale which application was later abandoned or withdrawn by the applicant. It is further common cause that the notice of attachment is headed Orange Free State Provincial Division.

D. Issues:

[20] The applicant premises its application on the following grounds (a) the writ is invalid by reason of non-compliance with the provisions of Rule 66 (1) of the Uniform Rules; (b) the attachment is a nullity because it is not in accordance with Rule 46 (3) of the Uniform Rules; and (c) the issue of urgency as raised by the respondent.

E. Urgency:

[21] The applicant in its founding affidavit avers that the matter is urgent because of “. . . respondents’ intention to proceed with the transfer and registration of the property into the name of the third respondent is clear. I am advised that this process is imminent and in the circumstances, justifies the bringing of this application as one of urgency.” No other averments are made in the founding affidavit about urgency. The applicant makes the following averments about prejudice, “applicant’s prejudice is readily apparent. It stands to lose not just one of its valuable farms, but both in order to secure payment of a debt which is one tenth of the securities’ true value. If the sale is allowed, the Applicant is compensated at approximately one-third of true value of the properties sold.” The applicant further avers that there is further prejudice it would suffer in the broader context of judicial oversight in what is strictly, judicially sanctioned forced sales.

[22] Mr Louw, appearing for the applicant, submitted that they could not have been able to bring this application until 12 August 2010 when they received the letter which advised that the transfer of the farm to the purchaser was to be proceeded with. He submitted that the sale took place on 22 July 2010 and as at 12 August 2010 the time was ripe for the transfer to have been completed. In which event it was imperative that they should bring the application on an urgent basis because it would have been impossible to pursue applicant’s interests once the property would have been transferred to a third party.

[23] The applicant avers that the delay in bringing the application earlier was due to the ‘respondent’s behaviour’ after a letter dated 03rd August 2010 was written to its attorneys, requesting them not to take further steps to transfer the farm to the third respondent pending the bringing of this application. The respondent refused. But after the applicant’s attorneys engaged with the respondents’ attorneys, they later agreed per letter dated 12 August 2010, to stay the transfer and undertook to give adequate notice in writing to the applicant if they decide to proceed with the sale. Much to the surprise of the applicant, the very next day, the respondents penned a letter informing the applicants that they were proceeding with the transfer with immediate effect. The respondents further furnished the applicant with the particulars of the third respondent. This came about after the applicant had, for six weeks, been asking for the third respondent’s particulars.

[24] Furthermore, the applicant avers that it would suffer prejudice because it would lose both its valuable farms in order to secure payment of a debt which was one tenth of the securities’ true value.

[25] Mr Louw distinguished the facts of this matter from those in Caledon Street Restaurants CC v Monica D’Aviera1. He submitted that in this matter the issue is about a sale of immovable property as compared to the Caledon matter which dealt with financial prejudice. He argued that urgency in this matter is not of the making of the applicant and even though opposition to the application was expected, the respondent on receipt of the papers acceded to the interim relief of staying the transfer and sought for the postponement of the matter.

[26] The respondents’ submissions are that the urgency is self-created. The time limits provided by applicant were extremely truncated in view of the fact that a period of two weeks elapsed before the applicant brought this application.

[27] It is the respondent’s contention that the applicant failed to demonstrate that he would have suffered prejudice if he had to wait for a hearing in the ordinary course. The respondent relies on the history of the matter in support of the contention of self-created urgency. Furthermore, the respondent argues that the applicant failed to make out a case of urgency in its founding affidavit.

[28] The argument by Mr Louw, as I understand it, is to the effect that the applicant could not have been able to bring the application at any stage other than after 12 August 2010 when he received the particulars of the third respondent. I agree with the submission by Mr Brooks, appearing for the respondents that the argument lacks merit in that the information was not only privy to the respondent’s attorneys. It could have been found with the Sheriff of the court or the auctioneers. Furthermore, there is ungainsaid evidence that the applicant was present during the sale. He ought to have known who bought his property. I say so mindful that at that stage the applicant did not have the information that led him to challenge the sale and attachment.

[29] The applicant submits further that at the time six weeks was about to lapse which is the normal time within which transfer of a property normally takes place. That flies in the face of the letters which were exchanged, in particular that of 13 August 2010. That letter indicates that the applicant’s attorneys as of that date were ‘to proceed with the transfer.’ That to me, is an indication that the process of transfer was still to be embarked upon and thus the six weeks period the applicant was concerned with was to begin.

[30] As stated above the notice of motion was issued on 23 August 2010 intimating that the application would be moved on Thursday, 26 August 2010 at 10h00 requiring the respondent to (a) notify the applicant’s attorney in writing on or before 15h00 on Tuesday, 24 August 2010 of their intention to oppose it; (b) after giving notice of intention to oppose, the respondent was to file its answering affidavit on or before 12h00 on Wednesday, 25 August 2010.

[31] It is apparent that these are stringent truncated time periods which really put the respondent under unnecessary pressure. I agree with the statement made by Kroon J in the Caledon Street Restaurant CC v Monica D’Aviera supra at page 8 where he stated that;

‘. . . The mere existence of some urgency cannot therefore necessarily justify an applicant not using Form 2 (a) of the First Schedule to the rules. If a deviation is to be permitted, the extent thereof will depend on the circumstances of the case. The principle remains operative even if what the applicant is seeking in the first instance, is merely a rule nisi without interim relief. A respondent is entitled to resist even the grant of such relief. The applicant, or more accurately, his legal advisors, must carefully analyse the facts of each case to determine whether a greater or lesser degree of relaxation of the rules and the ordinary practice of the court is merited and must in all respects responsibly strike a balance between the duty to obey rule 6 (5) (a) and the entitlement to deviate therefrom, bearing in mind that that entitlement and the extent thereof, are dependent upon, and are thus limited by, the urgency which prevails. The degree of relaxation of the rules should not be greater than the exigencies of the case demand (and it need hardly be added these exigencies must appear from the papers).’ (My emphasis)

[32] I am of the view that the applicant was wrong in bringing this matter by way of urgency more so on such truncated time periods. The background to this application and the reasons advanced for urgency do not in the list support the abridgment of the time periods in the manner the applicant did. It should be noted that the applicant did not bring this application until 23 August 2010 which covers a period of 7 working days within which the application could have been brought. It is my finding therefore, that the applicant failed to set out circumstances and facts in his founding affidavit to establish that the matter is urgent.

[33] However, on 26 August 2010 which was the date set down for hearing of the matter by the applicant, both parties agreed that the matter be adjourned to 14 October 2010 putting each other on terms for filing of papers and heads. When the matter served before me on 14 October 2010 it was ripe for hearing. Both urgency and the merits were argued. Even though I have found that the matter was not urgent, I am of the view that I need to deal with the merits.2

Consequent upon this finding it is only reasonable that the applicant would have to bear the costs that were reserved on 26 August 2010.

F. Superannuation:

[34] The applicant takes issue with the registrar for having issued the writ on 10 July 2008 after the expiry of the three year period from the date upon which the judgment had been pronounced. The applicant contends that the executability of the judgment had been lost by effluxion of time more particularly that a period of seven years from the date of judgment had expired before the writ was issued by the registrar. The applicant further contends that his consent was necessary for the issue of the writ, alternatively, that an application ought to have been made to revive the judgment. The applicant submits that the writ stands to be set aside and the subsequent sale thereof because of this aspect only.

[35] The first respondent contends in his answering papers that ‘from the time the applicant started on his venture to have the judgment granted against it on 1st February 2001 rescinded until this process was finally completed on 16th July 2007, first respondent was unable to do anything to enforce the terms of the original judgment.’ The first respondent argues that the judgment against applicant became final and enforceable only when the application for leave to appeal was dismissed by the Supreme Court of Appeals on 16 July 2007. Mr Brooks argued that the provisions of Rule 49 (11) of the Uniform Rules started to kick in as soon as the application for leave to appeal was embarked on.

[36] Rule 66 (1) of the Uniform Rules provides as follows:

“(1) After the expiration of three years from the day whereon a judgment has been pronounced, no writ of execution may be issued unless the debtor consents to the issue of the writ or unless the judgment is revived by court on notice to the debtor, but in such case no new proof of the debt shall be required . . .”

[37] The wording of this section is clear and it has been interpreted to mean what it says. In Segal and Another v Segil3, Howie J said the following:

“From the aforegoing it is clear that the procedure laid down in the current Rule 66 (1) is a restatement of the common-law rule which was received into this country and has consistently been a part of South African law ever since. Whatever the merits and demerits of the superannuation rule may be, that is not the present issue. The legitimacy and current validity of that rule is beyond question. According to this procedure a debtor must be given notice of a revival application and the reason is obvious.”

[38] In view of the fact that a judgment debtor may waive the benefit of the subrule, it may be contended that the judgment creditor should not bring an application for revival without first seeking the assent of the debtor to the issue of the writ.4

[39] In the instant matter the applicant started to pursue the rescission of the order in 2005. It was four years after the judgment was granted. I engaged Mr Brooks on this aspect. His response to it was that one has to have regard to the history of the matter and once one does that, what it means is that it is not open to the applicant to raise the gap between the judgment and the application for rescission. The applicant, so he submitted, is then estopped from relying upon the lapse of that period of time rather in the same way as in an application for rescission of judgment if there is a demonstration by the judgment creditor of acquiescence in the judgment. It would be with great difficulty so he submitted, that the judgment debtor can then come to court and say he/she seeks rescission.

[40] I disagree with this submission by Mr Brooks. It is apparent from the facts that the judgment obtained by the respondent had superannuated by 2005 when the process of trying to rescind the judgment was embarked upon by the applicant. As of then, the applicant could have invoked the provisions of Rule 66 (1). It is apparent that from 2005 till 2007, for that period, the respondent could not have proceeded with the issue of the Writ. Based on this finding, I am of the view that there is no need to deal with the provisions of Rule 49 (11) with regard whether the application for rescission of judgment has the same effect, as in appeals, of suspending the decision.

[41] I am therefore of the view that the judgment obtained had superannuated by 2005.

G. Compliance with Rule 46 (3):

[42] Rule 46 (3) provides as follows:

“(a) The mode of attachment of immovable property shall be by notice in writing by the sheriff served upon the owner thereof, and upon the registrar of deeds or other officer charged with the registration of such immovable property, and if the property is in the occupation of some person other than the owner, also upon such occupier.

(b) Any such notice as aforesaid shall be served according to the provisions of rule 4.”

[43] The applicant attacks the validity of the sale on the basis that the attachment ought to have been made by the Sheriff of the district in which the property is situated, or at most by the Sheriff of the district in which the office of the Registrar of Deeds is situated, contrary to what happened in the instant matter where the heading reflects that the Sheriff who attached the properties is from the Orange Free State and not the Eastern Cape.

[44] Mr George Henrich Funck filed an affidavit stating that he has been acting sheriff for the district of Colesberg, where the two farms are situated for 18 years. At the time he attached the farms he was also an acting sheriff for the district of Phillippolis. He further attested that he and applicant knew each other well. He personally served the Writ of Execution to him personally and explained to him the nature of contents and exigencies thereof to him. This information was not gainsaid by the applicant as no replying affidavit was filed.

[45] It is apparent to me that in so far as the writ purports to have been issued out of the Orange Free State Supreme Court is clearly an error. Even the applicant is aware that this is an error. To me it seems, that, the applicant is trying to make a mountain out of a molehill. That is even confirmed by his conduct thereafter. Applicant made all means to stop the sale. Therefore nothing turns on this contention by the applicant.

[46] The applicant contends that the notice of attachment ought to have been served upon the owner of the properties sought to be attached, upon the appropriate registrar of deeds and upon any lawful occupier. Applicant further submits that “service” is prescribed to be by means of registered letter duly prepaid and posted.

[47] The applicant contends that he was never served with the notice of attachment in this manner and/or form and furthermore, the return of service does not indicate that the notice of attachment was personally served on him or by registered letter duly prepaid and posted. To this end, the applicant makes the point that even the notice of attachment does not state that it was served on him personally. This to me is contrary to the ungainsaid evidence of the sheriff Mr Funck.

[48] The applicant further submits that the trust has four trustees and none of them were served with the notice of attachment.

[49] The respondent on the other hand submits that it was a special term and condition of the loan agreement that there could not be a change of trustees without the respondent’s prior consent. The respondent attached a copy of the letter of grant which was addressed to applicant by the respondent dated 26 September 1997 where this is spelt out. Paragraph (a) thereof reads as follows:

“(a) Geen verandering ten opsigte van die trusteeskap vind plaas sonder dat die Bank se skriftalike toestemming vooraf verkry is nie.”

[50] Furthermore, the respondent attached a copy of the original letter of authority which was issued by the Master of this court on 31 October 1996 which indicates that the applicant is the only authorised trustee to act on behalf of Deutz Museum Trust.

[51] The respondent makes the point that the applicant never from then advised it of any change of the trustees of the trust. Respondent avers that even in previous applications for rescission and the urgent application on 22 July 2010, wherein the applicant sought to stay the sale in execution, he argued that he was the sole trustee.

[52] The respondent states that it is the standard condition of the loan agreement that the properties should be occupied and cultivated or farmed by the applicant unless he would have obtained consent to lease it out from the respondent. Such an averment is contained in paragraph 6 of the Conditions of Loan attached to the papers by the respondent and the letter of grant referred to above. Respondent states that he had consented to the lease agreements that expired on 30 June 2004. The respondent further consented to another lease agreement which was due to expire on 14 January 2006. It is the contention of the respondent therefore that if the properties were leased at the time of the attachment, it was not aware of that as the necessary consent was not obtained or requested as per the conditions of the loan.

[53] In Stellenbosch Farmers’ Winery (Ltd) v Stellenvale Winery (Pty) Ltd5 Van Wyk J (with whom De Villiers JP and Rosenow J concurred) stated that:

“It seems to me that where there is a dispute as to the facts a final interdict should only be granted in notice of motion proceedings if the facts as stated by the respondents together with the admitted facts in the applicant’s affidavits justify such an order . . . Where it is clear that facts, though not formally admitted, cannot be denied, they must be regarded as admitted.”

[54] It is apparent from the facts in this matter that the respondent was not advised that there are other trustees as averred by the applicant. It is further clear that the respondent was never advised of the lease agreements entered into after that which expired on 14 January 2006. The leases with Messrs Loock and Van Zyl were never approved by the respondent as required by the terms and conditions of loan referred to above. The applicant’s contentions in these regards cannot hold.

As a consequence of my finding that Rule 66 (1) has not been complied with I make the following order:

1. The Writ of Execution issued by the Registrar on 10 July 2008 under Case No 683/200 is set aside;

2. The attachment made in execution thereof on 18 September 2008 in respect of:

2.1 Portion 1 of the farm Hughdale No 161 in the Division of Colesberg: in extent 1624’1891 hectare:

2.2 Remainder of the farm “New Klipfontein” in the Division of Colesberg: in extent 2681’3039 hectares:

is set aside.

3. The Sale in Execution to the third respondent held on 22 July 2010 in respect of;

3.1 Portion 1 of the farm “Hughdale No 161” in the Division of Colesberg: in extent 2681’3039 hectors;

4. The respondent is ordered to pay applicant’s costs except the costs consequent upon the postponement of the matter on 26 August 2010.

_________________________

M MAKAULA

JUDGE OF THE HIGH COURT

Counsel for the Applicant: Adv Louw

Attorneys for the Applicant: Nolte Smit Inc

42 Beaufort Street

GRAHAMSTOWN

Counsel for the Respondents: Adv Brooks

Attorneys for the Respondents: Nettletons

118a High Street

1(unreported judgment, Case No. 2656/1997, South Eastern Cape Local Division)

2See: Novatech Adhesives Ltd & Others v Doherty & Others 1998 JOL 4297 (C) at 13; Mtirara v KSD Municipality, 2010 JOL 25037 (TK) at 8-9

3 1992 (3) SA 136 (CPD) at 143 A-B

4Erasmus Superior Court Practice: Farlam Fichardt Van Loggerenberg B1-410 and the authorities referred to footnote 11 thereat

5 1957 (4) SA 234 (C) at 235 E-G