Sheriff of the High Court Benoni v Lombard obo Yellow Dot Property and Another (15685/09) [2015] ZAGPPHC 722 (15 October 2015)

REPUBLIC OF SOUTH AFRICA

OFFICE OF THE CHIEF JUSTICE

(GAUTENG DIVISION. PRETORIA)

CASE NO: 15685/09

IN THE MATTER BETWEEN

THE SHERIFF OF THE HIGH COURT BENONI

Applicant

and

STEVAN LOMBARD obo YELLOW DOT PROPERTY

First Respondent

YELLOW DOT PROPERTY INVESTMENTS (PTY) LTD

Second Respondent

JUDGMENT

LEGODI J

HEARD ON: 08 AUGUST 2015

JUDGMENT HANDED DOWN: 15 OCTOBER 2015

[1] In this matter, the real question is whether the respondents were entitled to effect renovations and other improvements on the

immovable property which they bought at a sale in execution, but before the balance of the purchase price was paid in full and before registration and transfer have taken place. In addition, the question is whether the respondents were in anyway refused access to the property to perform certain services as contemplated in clause 7 of the conditions of the sale in execution.

[2] The question aforesaid are raised in an application brought by the Sheriff involved in the sale of the property in execution. She wants the sale agreement in execution to be cancelled due to the respondents' default to pay the balance of the purchase price within the stipulated period. It is further prayed that the deposit paid by the Respondents should remain in the trust account of the Sheriff for payment of any loss claimed in terms of the High Court Rule 46(11), provided that if no claim for loss sustained has been lodged within a period of 120 calendar days from date of cancellation of the sale, such deposit shall be refunded to the purchaser and further that the respondents be held liable for all wasted costs including costs of the resale.

[3] The relief sought by the applicant is contested by the purchasers (the respondents) who contend that they could not get funding for the balance of the purchase price or guarantees thereof because the applicant refused them access to the property to effect certain renovations thereof in order to bring the property in a condition where a mortgage loan application could be approved by the bank.

[4] Clause 6 of the sale in execution agreement deals with the risk and occupation. It was heavily relied upon by the purchasers. It reads:

"The purchaser shall be entitled to possession of the property immediately after the fall of the hammer and signing of the sales conditions, payment of the initial deposit and the auctioneer's commission, and thereafter the property shall at his/his/its sole profit, risk or loss. This Judgment creditor and the Sheriff give no warranty that the Purchaser shall be able to obtain personal and or vacant occupation of the property or that the property is occupied and any proceedings

to evict the occupierls shall be undertaken by the purchaser at his own cost and expense''.

[5] This is in the nature of a 'voetstoot' sale in execution agreement. However, what is clear is that clause 6 does not confer any right on the purchasers beyond mere possession of the property. The purchasers want to rely on the clause for access/possession in order to effect improvements or renovations on the property. No such a provision is made in clause 6.

[6] Clause 6 in my view should be seen in the context of clause 7. The latter deals with electrical certificate of compliance. It reads:

"The Purchaser agrees that there is no obligation on the seller to furnish an Electrical Certificate of Compliance issued under Regulations promulgated in terms of the Occupation Health Safety Act of 1983. The Purchaser shall be obliged at his/her/its own cost, to obtain such a certificate as from such date as the aforesaid Regulations requires such Certificate to be in place".

[7] In paragraph 6.17 of the purchasers' answering affidavit, is stated:

"Later on the 1st of October 2014 Lank Security Services advised the respondents that their instructions were to only allow access for the purposes of an electrician to conduct an inspection and and to provide an electrical compliance Certificate ..."

[8] In the response to the email referred to in the quotation above, I was recorded:

"Our builders will need to be on site. They have requested to stay at the house to allow for quick completion of the work. If they cannot do this it will take them longer to complete the job. Please bear in mind that this house has been completely stripped and vandalized.

Additionally I don't understand why and how the bank can deny us access to the property. It is an express condition of the sale in execution agreement that we are entitled to this from the fall of the hammer. I will expect agreement for full handover of the keys and control from the bank.

Please can you bring this to the attention of the bank and advise urgently as at this point out hands are tied".

[9] Clause 7 does not entitle the purchaser to bring a builder onto the property because the property is stripped and vandalized. That again is the nature of purchase of property in a sale in execution where warranty is specifically excluded as in clause 6 of the agreement. The only entitlement to do anything on the property before payment of the balance of the purchase price was such work as it would have entitled the purchaser to obtain electrical compliance certificate. That would have needed an electrician and not a builder.

[10] Insofar as the purchasers might have wanted to suggest that they were not given access to the property, and presumably to comply with the provisions of clause 7, in paragraph 5 of the email sent on their behalf, is recorded:

"The Security guard conveyed to our client that he was unable to give us access to the property as a house has alarm had been installed inside the dwelling and our client would be required to arrange access directly with the security company being Langa Security".

[11] Then in paragraph 6 of the email it is recorded that the security company have not been cooperative. This was stated without providing more information about the nature of not being cooperative by the Security Company concerned. Then in paragraph 10 of the said email, is recorded:

"In view that our client is being prevented to perform in terms of the conditions of sale, at no fault of our client, itis our submission that performance is suspended until this matter is resolved in-toto and that our client is afforded 21 from the date in which our client is able to get access to the property to deliver the balance of the purchase price".

[12] The guarantees were supposed to be delivered by the 11 September 2014. In response to the email of 26 August 2014 referred to above, the purchasers were advised that the guard will only be removed once confirmation is given that the guarantee is in place and that should the guarantees not be provided timeously, the applicant will proceed with the application to have sale in execution set aside.

[13] On 12 September 2014, the purchasers were told that the bank was proceeding with an application for cancellation of the sale in execution. On the same day, the purchasers responded and inter alia stated that they were unlikely to obtain the finance on the property in its current vandalized state and that they needed to commence with repairs immediately. So, again, the purchasers moved from the premise that they were entitled to effect renovations on the

'vandalised' property. That they could not do except those specified in clause 7.

[14] Furthermore, in the email of 15 September 2014, the purchasers wanted access to allow the builders to begin working on the property. Then in an email of 24 September 2014 they conveyed to the Bank's attorneys that they did not have 'faintest idea on the state of the property until' bond originator was escorted through the property by the guard mandated by the purchasers.

[15] It appears that the purchasers knew immediately after the sale in execution that they will not get bond loan unless they bring in 'builders' to do renovations. That is the risk they took in purchasing a property at a sale in execution where they contended

themselves with a 'no warranty' clause. This appears to display their attitude at all times wanting to bring in 'builders' to the property and not the electrician as provided for in clause 7.

[16 In paragraph 5 of the email of 24 September 2014 is recorded:

"As you are well aware, abovementioned property was in a complete chaos and dilapidated to such an extent that the electric wires and components thereto were stripped, the kitchen basin and cupboards were removed. the plumbing throughout the property were exposed and the ceiling boards appeared to be purpooselv damaged bv a sledge hammer. It is our submission that the abovementioned property is no habituated and thus not bondable as it stands". (The underlining is my emphasis)

[17] It is very clear from the quotation that the electrical compliance alone, would not have made the property bondable and the purchasers would never have been able to secure guarantees anyway. Most importantly, as on 25 September 2014 there was no longer an agreement as the purchasers had failed to furnish the guarantees by 15 September 2014 and there was no extension.

[18] In conclusion, the purchasers do not oppose the cancellation of the sale in execution. What is contended is the applicant’s

entitlement to retain the deposit in the sum of R90 000 for costs in addition to payment of wasted costs occasioned by the cancellation. I have difficulties with the claim for costs. Sub-rule (1) (a) of rule 46 does not entitle the sheriff to claim for any costs. Paragraph (b) of the sub-rule does allow an order for costs, provided the jurisdictional factors are met. That is, (a) the relief for costs has to be on the application of the aggrieved creditor, (b) the sheriff must submit his or her distribution account whereon the name of the aggrieved creditor appears and (c) a report is must be filed with the judge in chambers who may summarily make an order for costs.

[19] In my view, it is understandable why it has to be on an application of the aggrieved creditor for costs or for any loss occasioned by the cancellation of the sale in execution. It is expected that any costs suffered by the cancellation will be that of the judgment creditor or any other judgment creditor who is aggrieved by the cancellation and not that of the sheriff The 'all wasted costs' in prayer 4 should include the costs incurred before and during the cancelled sale in execution. Any costs of resale are costs the judgment creditor would have incurred anyway. In other words, that would be the normal costs of sale in execution. I therefore find that an order for costs at this stage is premature and cannot be granted for failure to comply with rule 46 (11) (b).

[20] The scheme under rule 46 is to ensure that cancellations of the sales in execution and the resale thereof take place as speedily as possible. But, most importantly, rule 46

(11) is aimed in ensuring that cancellations take place without incurring costs and therefor they are dealt with in chambers where an order can be granted summarily by a judge A judge is involved, in my view, to ensure judicial oversight.

[21] Consequently an order is hereby made as follows:

21.1 The sale in execution held on 21 August 2014 is hereby set aside,

21.2 The Sheriff of the High Court, Benoni is hereby authorized to again sell in execution the immovable property being ERF 4881 Benoni, Extension 14 Township,

21.3 No order as to costs is made.

………………...............

M F LEGODI

JUDGE OF THE HIGH COURT

FOR THE APPLICANT:

INSTRUCTED BY:

HAMMOND POLE MAJOLA

c/o OLTMAN ATIORNEYS

Menlo Law Chamber

No. 49, 111 PRETORIA Street

TEL: 011 874 1800

REF: 31140/Elmarie

FOR THE RESPONDENTS: ADV N ERASMUS

INSTRUCTED BY:

BRUNO SIMAO ATIORNEYS

c/o EY STRUART ATIORNEYS

Suite 202 Waterkloof Gardens

270 Main Street

Brooklyn, PRETORIA

CELL: 079 715 2138

REF: MAT14349