Sheriff of the High Court, Brits v Mngomezulu, Wilson v Pecanprops 43 CC and Others (987/2010) [2015] ZANWHC 64 (10 September 2015)

IN THE NORTH WEST HIGH COURT

MAHIKENG

CASE NO.: 987/2010

DATE: 10 SEPTEMBER 2015

In the matter between:-

THE SHERIFF OF THE HIGH COURT, BRITS.................................................................Applicant

And

WANDILE MZIKABABA MNGOMEZULU.....................................................................Respondent

In re:

GREGORY MARTIN WILSON.............................................................................................Applicant

AND

PECANPROPS 43 CC & 2 OTHERS..........................................................................1ST Respondent

MUGADI SAMUEL MNGOMEZULU......................................................................2ND Respondent

ISAAC KABELO KUTU..............................................................................................3RD Respondent

KGOELE J

CIVIL MATTER

DATE OF HEARING : 04 JUNE 2015

DATE OF JUDGMENT : 04 JUNE 2015

DATE OF REASONS : 10 SEPTEMBER 2015

FOR THE APPLICANT : Adv. Redman (SC)

FOR THE RESPONDENT : Mr A. Christophorou

REASONS FOR JUDGMENT

KGOELE J:

[1] The applicant in this matter, the Sheriff of the High Court Brits, (the Sheriff), brought an application in terms of Rule 46 (11) of the Uniform Rules of Court (the Rules) wherein he seeks to set aside the sale of Erf 1….. P…… E…… Township, registration division J.Q., North West Province (the Property) which was sold in execution to the respondent on 25 November 2011. The respondent in the application, Wandile Mzikababa Mgomezulu (Wandile) was the purchaser of the property to sale in execution.

[2] Wandile opposed the application and has, in turn, instituted a counter application for an order declaring the attachment of the immovable property in question, effected on or about the 18th July 2011, void ab initio. In addition, he raised a pre-liminary issue of non-joinder. The applicant on the other hand also raised a pre-liminary issue to the counter – application by the respondent, that he, Wandile, has no locus standi to challenge the underlying attachment and/or the execution process thereof.

[3] After hearing arguments by both parties on the pre-liminary issues and the merits of the application on the 4th June 2015, this Court granted the following order:-

“THAT: The point in limine raised by the Respondent against the application by the Applicant be and is hereby dismissed.

THAT: The point in limine raised by the Applicant in respect of the Counter-application by the Respondent be and is hereby upheld.

THAT: An order is hereby made in terms of prayers 1.4 and 7 of the Applicant’s Notice of Motion in terms of Rule 46(11) to a Judge in Chambers dated the 9th day of SEPTEMBER 2013.

THAT: The Respondent is ordered to pay the costs of this application (main) including costs occasioned by employment of a Senior Counsel.

THAT: The counter-application by the Respondent be and is hereby dismissed with costs which costs shall include the costs occasioned by the employment of a Senior Counsel.”

The reasons for the above order follow hereunder.

[4] The above application is inextricably linked, to the main application instituted by Gregory Martin Wilson as applicant (Wilson) against Pecanprops 43 CC and two others (as Respondents) out of this Court under case number 987/2010. In this regard, the current application bears the very same case number as the main application.

[5] The third respondent in the main application, Isaac Kabelo Kutu (Isaac) passed away in 2010. The above application, particularly the relief sought, arises out of the facts and judgment in the main application. In this regard, the Sheriff seeks the cancellation of the sale in execution, of the very same immovable property, which was declared executable in terms of the said judgment, after the hearing of the main application. The property in question is solely owned by Pecanprops 43 CC (Pecanprops CC), the first respondent in the main application. The sole member of the said corporation is Mugadi Samuel Mngomezulu, (Samuel), the second respondent in the main application.

[6] A brief background of this matter is to the effect that the applicant in the main application Wilson, launched an application against the respondents, Pecanprops CC, Samuel and Isaac (the deceased) for judgment in the amount of R1 889 017-29, with ancillary relief, on 30 April 2010. Judgment was granted in favour of Wilson by this Court on the 24/02/2011.

[7] Subsequent to this judgment Samuel the second respondent, applied for leave to appeal the judgment, which application was heard on the 21 October 2011 and was refused with costs. By application dated 25 October 2011, Samuel again applied for leave to appeal against the same judgment which leave to appeal was already refused. This second application for leave to appeal was in any event, also dismissed by this Court on 19 April 2013.

[8] It later emerged from the papers filed in this application that the respondent, Wandile, is the son of Samuel. It also appears from the papers that although the attachment of the property was made on 18 July 2011, the property was in fact only sold at the sale in execution during November 2011, to Wandile, after the application for leave to appeal (first application) had been dismissed on the 21 October 2011.

[9] All of the relief sought by both the applicant and the respondent in this application pertains and/or is peripheral to the sale of the immovable property in question.

Non joinder raised by the respondent

[10] Wandile contends that the Corporation, Pecanprops CC and Samuel (his father) have a direct and substantial interest in the subject matter of this application. In particular, his counsel argued, that they have a legal interest in the subject matter of the litigation which may be affected prejudicially by the judgment of the Court and ought to have been joined as parties to the proceedings. Counsel for the respondent quoted the case of Henri Viljoen (Pty) Ltd v Awerbuch Bros 1953 (2) SA 151 (O) at 168-170 as a support for his argument. He finally prayed that at the very least, the application ought to be stayed pending the joinder of the Pecanprops CC and Samuel.

[11] At the outset it is necessary to emphasize that the property which was attached belongs to Pecanprops CC and not to Samuel. Therefore, as correctly submitted by the applicant’s counsel, there are two separate and distinct relationships implicated in this matter namely, the relationship between the judgment creditor, Wilson, and the judgment debtors Pecanprops CC, Samuel and the late Isaac. The second relationship is that which is between the applicant, who is the Sheriff and Wandile (himself). The second relationship was brought by an agreement of sale the two concluded, hence the application by the Sheriff. In my view, the setting aside of the attachment of the property, any application to Appeal or rescind the Order granted by this Court relates to the first relationship mentioned in this paragraph. Therefore, the application brought by the Sheriff involves only the relationship between him and Wandile. It does not involve Wilson, Pecanprops CC, Samuel and/or Isaac. The mere fact that Wandile is related to Samuel does not vest him with the right and or locus standi to set aside the attachment of the property or to appeal or rescind the Court Order.

[12] Rule 46 (11) of the Rules provides as follows:

“(11) (a) If the purchaser fails to carry out any of his or her obligations under the conditions of sale, the sale may be cancelled by a judge summarily on the report of the sheriff conducting the sale, after due notice to the purchaser, and the property may again be put up for sale..

(b) The purchaser shall be responsible for any loss sustained by reason of his or her default, which loss may, on the application of any aggrieved creditor whose name appears on the said sheriff’s distribution account, be recovered from him or her under judgment of the judge pronounced summarily on a written report by the said sheriff, after such purchaser shall have received notice in writing that such report will be laid before the judge for such purpose”

[13] The provisions of Rule 46(11) contemplate an application being brought before “a judge”. A “judge” is defined in the Rules to mean-

“Judge” shall mean a Judge sitting otherwise than in open court”

[14] The Rules further envisage a simple and expeditious procedure for the cancellation of a sale in execution as a result of a purchaser’s failure to carry out any of his or her obligations under that agreement. In the case of Sheriff, Hlabisa and Nongoma v Shobede 2009 (6) SA 272 (KZN) at paragraph [9] Wallis J described the position as follows:-

“The rule contemplates a summary procedure based solely on a report by the Sheriff. There is no reference to an “application” and it is both unnecessary and inappropriate to follow the procedure laid down in rule 6 when seeking the cancellation of a sale under this rule. All that is required is that the sheriff report to the court that there has been a sale in execution and that the purchaser has failed to carry out their obligations under the conditions of sale in respects stated in the report, thereby justifying its cancellation. The purpose of this is that the court should oversee the process of execution. This is of fundamental constitutional importance.”

See also: Chief Lesapo v North West Agricultural Bank and Another 2000(1) SA SA 409 (CC)

[15] It is also apparent that there is no provision in the Rules and no requirements that Samuel and Pecanprops CC be joined as parties to the Rule 46 (11) application. They have no interest in these proceedings as they are not parties to the agreement of sale. At the very least, they have interest and as indicated above can be and should be parties to the setting aside of the attachment (the counter-application) in this matter, hence the points in limine raised by Wandile that of non-joinder were dismissed by this Court in its judgment.

THE COUNTER APPLICATION

No locus standi raised by the applicant

[16] The respondent’s submissions is that the entitlement of the applicant to obtain the orders sought in squarely premised on there being:-

(a) An enforceable judgment in respect of the main application; and

(b) A valid attachment of the immovable property in question, during the existence of the enforceable order; and

(c) A valid sale and transfer, during the existence of an enforceable order.

[17] Absent one or more of the above-mentioned requirements, the respondent’s counsel argued, the applicant cannot have a legally valid sale and, as a consequence, cannot obtain any of the orders sought by it. He indicated that this position is premised on the following facts and circumstances:-

• The application for leave to appeal by the second respondent in the main application, Samuel, on 16 March 2011 suspended the operation and execution of the entire order granted on the 24th February 2011;

• No application for leave to execute in terms of Rule 49 (12) of the Rules was launched by the applicant in the main application;

• On the 18th of July 2011, and while the application for Leave to Appeal was still pending, the Applicant (in the main application) purported to attach the immovable property in question, pursuant to a Writ of Attachment which was seemingly received by the Sheriff (being the Applicant in the above application) on the 11th of July 2011;

• The said attachment, accordingly, had no legal effect and was fatally defective and premature;

• On the 21st of October 2011, the application for Leave to Appeal was dismissed. The dismissal did not have the effect of curing the premature and invalid attachment, as aforesaid;

• On the 25th of October 2011, a second application for Leave to Appeal was launched by the second respondent (in the main application), having the very same effect on the judgment, as the first application for Leave to Appeal;

• At no time did the applicant (in the main application) seek to set aside the second application for Leave to Appeal; Significantly, no execution steps were taken by the applicant (in the main application), between the period of the 21st of October 2011 and the 25th of October 2011;

• During November 2011, the Applicant purported to sell the immovable property in question, by way of a sale in execution, pursuant to the attachment which had purportedly taken place on the 18th of July 2011, as aforesaid;

• The sale in execution is invalid and bad in law, firstly, because the original attachment, which then led to the sale in execution, was invalid and premature and, secondly, because with the second application for Leave to Appeal still pending, the sale in execution was premature and an invalid step in the execution process; The second Application for Leave to Appeal was only adjudicated in April 2013.

[18] In the circumstances, the respondent’s Counsel submitted, the attachment of the immovable property in question was materially defective and constituted a nullity, by virtue of the fact that it was not executed pursuant to an enforceable judgment and in particular, the attachment was effected at a time when the first application for Leave to Appeal had suspended the operation of the very judgment for payment upon which the right to execute against the property relies for its validity and effect. As a direct consequence, the subsequent sale of the said property was invalid and constitutes a nullity, as it was not premised on a valid attachment or an enforceable judgment.

[19] On this point he concluded by submitting further that therefore, the sale in execution, itself, was premature and concluded at a time after the Second Application for Leave to Appeal had suspended the further execution. By virtue of the said sale constituting a nullity, the applicant is not entitled to any of the orders sought in the Notice of Motion

[20] As a second leg to the arguments above the respondent’s Counsel submitted that apart from the afore-going, and in any event, the main application was, for all intents and purposes, settled on the 2nd of February 2012, as appears from the correspondence on paginated page 163 of the papers before Court. The negotiations, leading to the conclusion of the settlement, commenced on the 12th of January 2012 and the correspondence pertaining thereto appears from page 152 of the paginated papers.

[21] According to him the settlement of the main application constituted a compromise of the disputed obligations and resulted in the novation and waiver of the claimed rights of Wilson (the applicant in the main application) in terms of the original underlying contract and the main application. He referred to the book of Christie’s The Law of Contract in South Africa, 6th Edition, page 473 as authority to support this proposition.

[22] In an effort to further expand on this proposition the respondent’s Counsel submitted that the applicant could not, simply, as an alternative to enforcing the settlement, revert to the execution process under the compromised and novated judgment. The significance and effect of the said compromise is that any and all steps in execution, pursuant to the aforesaid judgment, the premature attachment and the sale in execution (even if found to be valid), came to an end and no process could be taken in furtherance thereof or in relation thereto. No process may now be taken in furtherance of the judgment and even if the sale be cancelled, there remain no rights for the applicant to execute. The applicant must, now, proceed to claim any alleged balance due in respect of the compromised debt, as per the agreed settlement, having not renewed his rights to revert to the judgment debt or any alleged breach of the settlement agreement. Accordingly, the applicant is, for this reason as well, not entitled to obtain the orders sought in the Notice of Motion. In the circumstances, he urged this Court to dismiss this application with costs and to grant

the counter-application with costs on the attorney and client scale.

[23] In reply to these submissions the applicant’s Counsel raised firstly, a preliminary point that Wandile, the respondent, has no locus standi to bring the counter-application. In support of this argument the applicant’s counsel reiterated his submissions that he already made above which distinguishes the two relationships that are apparent in this matter. According to him the respondent, Wandile, has sought to obfuscate the two relationship described above in an attempt to escape the consequences of his failure to comply with his obligations under an agreement of sale he concluded with the Sheriff.

[24] I fully agree with the submissions made by the applicant’s Counsel that the mere fact that Wandile is related to Samuel does not vest him with locus standi to set aside the attachment of the property or to appeal or rescind the Court order granted by this Court. It goes without saying that the counter application is ill-conceived from the onset in that Wandile has no locus standi to challenge the underlying judgment or the execution process. He has concluded a written agreement with the Sheriff and

bound himself therein and is obliged to comply with his obligations thereunder. The application brought by Wandile is not brought in terms of Rule 46 (11) and it is furthermore unclear on what basis he contends he has locus standi to set aside the attachment and subsequent sale in execution. How can a purchaser come to Court and say the attachment should be set aside when Pecanprops CC and Samuel did not at any time challenge the validity of the attachment? On this basis alone, the counter application falls to be dismissed with costs.

[25] For the mere fact that this matter has a tendency of re-surfacing repeatedly and in different facets, I am of the view that despite the finding that I made in paragraph 24 above the merits of the counter-application should also be analysed. I now turn to deal with the merits.

[26] Once again I need to emphasize that the immovable property referred to in the Court Order is the property that belongs to Pecanprops CC. The aforesaid judgment has not been rescinded and is extant.

[27] Although Samuel brought an application for leave to appeal the judgment (on two occasions), Pecanprops CC has never lodged an application for Leave to Appeal and has never challenged the judgment granted against it. Accordingly, there has never been any obstacle to Wilson executing against the immovable property and pursuing his rights under the judgment against Pecanprops.

[28] Although Samuel made an application for leave to appeal the judgment, it is significant that the sale in execution by the Sheriff to Wandile took place during November 2011, after the application for Leave to Appeal had been dismissed on 21 October 2011.

[29] The crux of Wandile’s purported defence is the attachment which according to him was not valid. The provisions of Rule 49 (11) merely provides for the suspension of the operation and execution of an order pending the decision of such an Appeal or application. The Rule does not render the attachment a nullity. The respondent’s counsel did not refer to any authority that says that if there is non-compliance with the Rules the steps taken is void. It is trite law that the suspension of an order is dilatory. Furthermore, it is not unlawful to not comply with the Rules of Court, but if you do not, the step that you took is irregular. Sometimes non-compliance with Rules of Court can be condoned. It is furthermore trite that according to the Rules if a party takes an irregular step, the other party must ask the party who does so to rectify and further apply to Court to set it aside. But if the aggrieved party takes a further step in the proceedings with full knowledge of an irregularity, he/she is not entitled to make an application for setting aside. See: Rule 30(2)(a) of the Rules.

[30] The papers in this matter are clear that the second application for leave to appeal was an irregular proceeding. The applicant’s attorneys in the main application brought this to the attention of the respondent then, Samuel, in 2011, he did not do anything about this nor appear before Court on the hearing of this application and it was subsequently dismissed. Thereafter, Samuel entered into settlement negotiations to settle the amounts owed. This amounts to further steps taken by him as a judgment debtor. It comes as a surprise that in 2013 he, Samuel, attest to a confirmatory affidavit to the ill-conceived application by his son, Wandile, with the effort to try and avoid the consequences.

[31] I fully agree with the submissions by the applicant’s Counsel that the sale in execution was good as it was put into effect after the first Leave to Appeal was dismissed. The irregular step taken by Wandile did not have any effect on the attachment and the sale in execution thereof. The effect of an attachment is not sale but a mere safeguard of the property to be available for execution later. For the Sheriff to have embarked on a re-attachment of the same property was going to be an exercise in futility.

[32] In essence, Wandile concedes that he has not secured the balance of the purchase price in accordance with the provision of the sale in execution. In addition to the defence above which he raised and which had been shown that it does not have merit, he contends further that even if the sale can be cancelled, there remain no rights for the applicant to execute because the settlement of the main application constituted a compromise of the disputed obligations and resulted in the novation and waiver of the claimed rights of applicant in the main action.

[33] The attorneys of the applicant in the main application Mr Smith had deposed to an affidavit in this Rule 46(11) application to set out facts that relate to the long history of this matter and of which he has first-hand knowledge and better placed to make such facts on Wilson’s behalf. From a conspectus of his affidavit, it is apparent that Wandile does not have personal knowledge of the details contained in the settlement agreement. He was not a party to the settlement agreement. He therefore does not know what the negotiations and the settlement was. It is also surprising that Ms Cohen, who according to the affidavit of Mr Smith was the one who was present and negotiating with the attorney of Wilson, did not even depose to an affidavit at all.

[34] Besides the full explanation as to why the settlement did not comprise of a novation or compromise by Mr Smith, Wandile is facing an insurmountable mountain to climb because, whether there was a novation of Wilson’s rights under the judgment or not cannot be a basis for the relief sought in the counter application, as the agreement was only concluded after the sale in execution took place and Wandile’s signature of the sale conditions. It is furthermore clear that Pecanprops CC was not a party to that agreement and leave is in this application sought to proceed with a second sale of the property of Pecanprops CC. It is further significant to also mention that in Annexure J5 attached to the papers, BBM attorneys admitted a breach by Samuel of his obligations under the settlement agreement, therefore, it is evident therefrom that the agreement still had not been complied with. The costs due under the judgment as it is evident from the settlement agreement also remain outstanding.

[35] I fully agree with the submission by the applicant’s counsel that Wandile has conceded that he has failed to secure the balance of the purchase price and chosen to pin the colours of his opposition to Samuel’s mast which has not only been shown to be baseless, but was also irrelevant insofar as Wilson’s rights against Pecanprops CC is concerned. It is therefore apparent that Wandile has also failed to make out a case for the relief sought by him in the counter-application, and his counter application is dismissed for this reason as well. It is clear that the counter application is another abuse of the Court’s process and clearly a dilatory attempt as nothing is gained but time since this matter started some years ago.

[36] The above are the reasons why the order in paragraph 3 was granted.

A M KGOELE

JUDGE OF THE HIGH COURT

ATTORNEYS:

FOR THE APPLICANT : Minchin & Kelly Inc.

18 Constantia Drive

Riviera Park

2745

FOR THE RESPONDENT : W J Coetzer Attorneys

23 Victoria Street