Weiss Combrink Legal Services CC v Standard Bank of South Africa Ltd and Others (176/2010) [2011] ZANWHC 89 (27 May 2011)

NORTH WEST HIGH COURT, MAFIKENG

CASE NO. 176/2010

In the matter between:

WEISS COMBRINK LEGAL SERVICES CC ................................................APPLICANT

and

STANDARD BANK OF SOUTH AFRICA LIMITED ..............................1ST RESPONDENT

SHERIFF OF THE HIGH COURT - RUSTENBURG .............................2ND RESPONDENT

REGISTRAR OF DEEDS, PRETORIA .................................................3RD RESPONDENT

FANTIQUE TRADE 1242 CC ............................................................4TH RESPONDENT

____________________________________________________________________________

JUDGMENT

GUTTA J.

[1] The applicant sought a declaratory order that:

1.1. the attachment on 24 October 2008 and the sale in execution on 03 April 2009 by the second respondent of Portion 87 (Portion of Portion 55) of farm Waterval 306, Registration Division JQ, North West Province, measuring 1 1047 square metres, previously held by the applicant under Deed of Title No. T89933/1997 (“the property”) are null and void;

1.2. the applicant is the owner of the property;

1.3. the applicant never lost ownership of the property pursuant to the sale in execution held by the second respondent on 03 April 2009 or pursuant to any subsequent sale that may have occurred following thereafter;

1.4. all and any transactions flowing from the above attachment and sale in execution, including any conditions of sale concluded /entered into and any registration of transfer steps with regard to the above immovable property are null and void.

[2] The applicant furthermore sought an order that:

2.1. the attachment of the property on 24 October 2008 by the second respondent be set aside/rescinded;

2.2. the sale in execution of the property by the second respondent on 03 April 2009 be set aside/rescinded;

2.3. the Deed of Sale, the transfer of tile and the registration of the property in the name of Fantique Trade 1242 CC, Registration No. 2001/023339/23, currently held under Title No. T57313/2009 be declared null and void and that it be set aside/rescinded;

2.4. the status quo ante as it existed immediately prior to the sale in execution by the second respondent on 03 April 2009, be restored and that the third

respondent be ordered to re-register the property currently held by the fourth respondent under Title No. T57313/2009, in the name of the applicant.

[3] Briefly, the facts are the following:

3.1. On 03 June 2008, the first respondent issued summons against the applicant for payment of an amount of R547 524.94, being the balance due and owing in respect of money lent and advanced by the first respondent to the applicant in terms of an agreement of a loan and secured by a covering mortgage bond over Portion 87 (a portion of Portion 551 of the farm Waterval 306, North West) (“the property”).

3.2. The summons was served personally on the applicant’s member at his registered address, namely, Plot Waterval 87, Rustenburg, on 02 September 2008.

3.3. The applicant did not defend the action, but instead the applicant’s attorneys telephoned the first respondent’s attorney and informed her that the applicant had entered into a deed of sale in respect of the property and requested a stay of proceedings in the action.

3.4. The fourth respondent alleges that the applicant was requested to furnish a copy of the deed of sale, proof of the bond granted to the purchaser and a statement of account in terms of which the finances of transfer were set out.

3.5. The aforesaid documents were never delivered to the first respondent’s attorneys.

3.6. On 01 October 2008, judgment was granted against the applicant and on 13 October 2008, the Registrar of the High Court issued a warrant of attachment to attach and take the property in execution.

3.7. The Sheriff was directed, in the warrant of attachment, to attach and take into execution the property and to cause it to be realized in the sum of R547 524.94, with 15% interest as from 05 May 2008 and to satisfy the judgment debt with costs and to dispose of the proceeds thereof in accordance with Rule 46.

3.8. The warrant and the notice of attachment of the immovable property was served by the Deputy Sheriff of the High Court, Rustenburg on 24 October 2008 by giving notice of attachment as follows:

a) to the Registrar of Deeds Private Bag X 183, Pretoria, 0001 per registered post;

b) to the defendant, at the chosen domicilium citandi et executandi address, namely, at PTN 87 (A PTN of PTN 55) of farm Waterval 306. The attachment notice and copy of the warrant of execution was served by affixing to the tree on the premises, no improvements;

c) to the occupier, at the chosen domicilium citandi et executandi address, namely at PTN 87 (A PTN of PTN 55) of farm Waterval 306. The attachment notice and copy of the warrant of execution was served by affixing to the tree on the premises, no improvements;

d) to the town council, the attachment notice addressed to the Town Treasurer Town Council Rustenburg was served on Ms R. Mokoka, Finance Clerk.

3.9. Notices of the sale in execution appeared in the Government Gazette and the Star newspaper on 20 March 2009.

3.10. The property was sold to the fourth respondent at the sale in execution on 03 April 2009, and on 11 September 2009 the property was registered in the fourth respondent’s name.

[4] The issue that I am to consider is whether there was compliance with Rule 46(3) of the Uniform Rules of Court. Mr Lowies, counsel for the applicant, submitted that:

4.1. it is common cause that in attaching, the Sheriff did not comply with Rule 46(3);

4.2. the warrant was purportedly served in terms of Rule 4. The authorities are clear that it is only in circumstances where there is no postal address that substantial compliance is acceptable;

4.3. the Court should not consider whether there is substantial compliance or not as there is a postal address as reflected in the warrant of execution and the authorities are clear that only in the instance where there is no postal address available, then the Court can consider whether there was substantial compliance;

4.4. that the fourth respondent has not made out a case why there was no service on the applicant’s postal address and why the first respondent should deviate from the rule;

4.5. the applicant stands to be prejudiced if the Court accepts that there was substantial compliance, namely, that services was effected in terms of Rule 4, that is on the domicilium citandi et executandi;

4.6. the applicant’s version is uncontested and cannot be directly refuted and should be accepted as true;

4.7. the first respondent’s attorney kept the applicant’s attorney in the dark about the sale in execution to the fourth

respondent and only advised them in a letter dated 08 September 2009 that the transfer of the property was lodged on 28 August 2009 in the Pretoria Deeds Office and that they intend to register the transfer the next day;

4.8. the applicant did not receive any notice of attachment until the letter dated 17 July 2009, from the first respondent’s attorney in reply to a letter sent by the applicant’s attorney;

4.9. the explanation by the fourth respondent that the post office does not make deliveries to farms or plots is irrelevant;

4.10. the property was not properly attached, hence the Sheriff had no authority to sell the property and to transfer the property to the fourth respondent;

4.11. the sale in execution is null and void and should be set aside, and would confer no title upon those who purport to purchase the property.

[5] Mr Roussouw, the fourth respondent’s counsel, submitted that:

5.1. the whole case is about the interpretation of Rule 46(3);

5.2. service of the warrant and the notice of attachment was proper in terms of Rule 4, namely, on the domicilium citandi et executandi;

5.3. service by registered post is the weakest form of service. It is left to the post office officials irrespective of whether the addressee receives it;

5.4. that if you strictly interpret Rule 46(3), the Sheriff has to go to the post office officials, irrespective of whether the addressee receives the notice or not and that this could never have been the intention as it leads to ridiculous results;

5.5. that is the reason why Rule 46(3) has been amended by Government Notice 980 of 2010, by deleting the second sentence and replacing it with “any such notice as aforesaid shall be secured in accordance with the provisions of Rule 4”. Counsel for the

fourth respondent submitted that although the amendment in terms of Rule 46(3) does not apply retrospectively, it gives an indication of the true intention of the legislature, namely, that the word “shall” should be “may”;

5.6. if one considers the Afrikaans version of Rule 46(3), the Afrikaans equivalent to the word “shall” is absent;

5..7 the Court has a discretion where a better form of service was effected than registered post and service in terms of Rule 4 should constitute substantial compliance;

5.8. the applicant was in lawful default and the Court should not come to his assistance.

[6] As a starting point, it is necessary to consider the terms of Rule 46(3) and the authorities on the subject matter.

[7] Rule 46(3) reads:

“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 occupation of some person other than the owner, also upon such occupier. Any such notice as aforesaid shall be served by means of a registered letter, duly prepaid and posted addressed to the person intended to be served.”

[8] There are conflicting authorities on what constitutes compliance with Rule 46(3).

[9] In Wessels & Another v Brink N.O & Others 1950 (4) SA 352 at (7), after obtaining judgment and a warrant of execution, a certain property was attached. The Sheriff sent the required letter, duly

prepared and posted as required in terms of the rules of Court and the letter was returned marked “unknown”. He also

summoned a meeting of creditors and all interested parties in the property and sent a prepared letter to the bondholder, which was also returned marked “unknown”. Lukas J, at 356C–D, held that:

“The Sheriff did all that could be required of him and the fact that the letter did not reach the debtor is not a ground upon which I should be entitled to set aside the sale in execution.”

[10] The Court further held, at 358F–G, that:

“It seems to me that this section is not to be read as requiring the Sheriff to take steps analogist to those required by the rules where service of documents or notices in connection with the institution of an action is required. There are explicit provisions in that regard and it is essential that the party against whom action is being taken should have proper warning so that he can appear in court to defend himself or his interests if he so wishes. The rule does not provide for service similar to that required when proceedings are being instituted. It seems to me that I must look at this section as being one which provides a means by which the Sheriff is to be protected if he takes a certain action. It does not seem to me that it is required to be an enquiry to pursue the debtor.”

[11] In the case of Sowden v ABSA Bank Ltd & Others 1996 (3) SA 814 (W), the documents could not be served by registered post. It was common cause that the post office had not provided the applicant with a postal delivery service and the applicant had informed the first respondent that he did not receive postal deliveries at the property. The Sheriff, who was unaware of these facts sent a prepaid registered letter to the applicant at the street address of the property. The Sheriff also served a copy of the warrant of execution of immovable property and notice of attachment by affixing a copy to the outer or principal door of the property and provided an explanation that “the documents could not be served by registered post as the post office refuses to accept the same”.

[12] Heher J at 820I/J–821A held that “the provision in Rule 46(3) of the Uniform Rules of Court, stating that the notice of attachment of immovable property shall be served on the addressee by prepaid registered letter, does not exclude the need for service altogether, . . .”.

[13] Heher J at 821A/B-B found that upon mere proof of posting a duly paid registered letter, does not create an irrefutable presumption of service and that service of the notice by affixing a copy of the domicilium citandi et executandi does not constitute serve in terms of Rule 46(3) and if service is not possible by registered post, the only effective means of service is personal service.

[14] The other view expressed in the weight of authorities is that all that is required by the Sheriff in attaching the immovable property is to send the notice of attachment to the owner and the occupier of the property attached and to be sold in execution, by prepared registered post, even though the owner or occupier might not have received the notice of attachment, there will be proper service and substantial compliance. See Stand 734 Fairland CC v Boe Bank Ltd 2001 (4) SA 255 (W); Standard Bank of SA Ltd v Bundu Te Litho 1999 (3) SA 979 (C).

[15] In Stand 734 Fairland CC v Boe Bank Ltd 2001 (4) SA 255 (W), the Court found that posting of the letter constitutes service and receipt thereof is unnecessary. No delivery was attempted by the Sheriff.

[16] The full bench of the Transvaal Provincial Division, in Ex-Parte Firstrand Bank Ltd t/a FNB Home Loans v Sheriff, Brakpan & Others 2007 (3) SA 194 (W), held that service of notice of attachment in terms of Rule 46(3) takes place upon post by registered post addressed to chosen

domicilium or actual postal address. Also see Drummond Farm (Pty) Ltd v Bekker (unreported decision) 2008 JDR 0075 (SE).

[17] Goldblatt J, however, in Ex-Parte Firstrand Bank Ltd t/a FNB Home Loans v Sheriff, Brakpan & Others supra agreed with Heher J that the notice referred to in Rule 46(3) is not a process as referred to in Rule 4 and that Rule 4 does not apply to notices in terms of Rule 46(3).

[18] Rule 46(1) provides that:

“A writ of execution against immovable property shall contain a full description of the nature and situation (including the address of the immovable property to enable it to be traced and identified by the sheriff; and shall be accompanied by sufficient information to enable him to give effect to subrule (3) hereof.”

[19] The provisions of the sub-rule are peremptory and are conceived in the interest of both judgment creditor and debtor. Messenger of the Magistrate’s Court, Durban v Pillay 1952 (3) SA 678 (A).

[20] The warrant of execution contained sufficient information to enable the Sheriff to comply with Rule 46(3) in that it contained a full description of the property, the registered address and postal address, namely:

“PORTION 87 (a portion of portion 55) OF THE FARM WATERVAL 306

REGISTRATION DIVISION: J.Q. NORTH WEST

MEASURING: 1, 1047 (one comma one zero four seven) HECTARES SQUARE METRES

HELD BY DEED OF TRANSFER T89933/1997

ALSO KNOWN AS: PLOT WATERVAL 87, RUSTENBURG

BEING THE REGISTERED ADDRESS and with POSTAL ADDRESS: PO BOX 95, KROONDAL 0350”

[21] Rule 46(3) is also couched in peremptory terms in that the notice must be served by means of a registered letter.

[22] Although the fourth respondent avers that the South African Postal Services did not do deliveries of registered mail to farms and plot areas, and that delivery to the property in compliance with Rule 46(3) was accordingly impossible as it would have been returned to sender, the fourth respondent cannot escape the fact that the applicant’s postal address was stated clearly in the warrant of execution and the Sheriff was made aware of the provisions of Rule 46 and notwithstanding failed to service the notice by means of a registered letter in compliance with Rule 46(3).

[23] I too agree with the views expressed by the full bench in Ex-Parte Firstrand Bank Ltd t/a FNB Home Loans v Sheriff, Brakpan & Others supra that the notice must be served by means of a registered letter to the postal address or the address chosen or furnished by the addressee.

[24] Had the Sheriff attempted to serve the registered letter and became aware that the service was impossible, then the return of service should have reflected same and in those circumstances, the first respondent should have applied to Court for directions on service. However, the notice could not be served in accordance with the provisions of Rule 4(1)(iv).

[25] The fact that the new amendment in Government Notice 980 of 2010 specifically provides that “any such notice as aforesaid shall be served according to the provisions of rule 4”, lends support to the fact that service in accordance with Rule 4 was excluded prior to the amendment.

[26] In casu, the Sheriff clearly did not do what was required of him in terms of Rule 46(3). There was no compliance. Accordingly, the property was not properly attached and the sale of the property is null and void.

[27] Counsel for the fourth respondent expressed concern that the applicant is seeking return of the property unencumbered. This

concern is covered by paragraph 2.4 of the notice of motion, namely, that the status quo ante as it existed immediately prior to the sale in execution be restored. This will include the re-registration of the bond on the property. It is also dealt with in the order granted hereunder.

CONCLUSION

[28] It is declared that:

a) the attachment on 24 October 2008 and the sale in execution on 03 April 2009 by the second respondent of Portion 87 (Portion of Portion 55) of farm Waterval 306, Registration Division JQ, North West Province, measuring 1 1047 square metres, previously held by the applicant under Deed of Title No. T89933/1997 (“the property”) are null and void;

b) the applicant is the owner of the property;

c) the applicant never lost ownership of the property pursuant to the sale in execution held by the second respondent on 03 April 2009 or pursuant to any subsequent sale that may have occurred following thereafter;

d) all and any transactions flowing from the above attachment and sale in execution, including any conditions of sale concluded/entered into and any registration of transfer steps with regard to the above immovable property are null and void.

[29] It is ordered that:

a) the attachment of the property on 24 October 2008 by the second respondent be set aside/rescinded;

b) the sale in execution of the property by the second respondent on 03 April 2009 be set aside/rescinded;

c) the Deed of Sale, the transfer of tile and the registration of the property in the name of Fantique Trade 1242 CC, Registration No. 2001/023339/23, currently held under Title No. T57313/2009 be declared null and void and that it be set aside/rescinded;

d) the status quo ante as it existed immediately prior to the sale in execution by the second respondent on 03 April 2009, be restored and that the third

respondent be ordered to re-register the property currently held by the fourth respondent under Title No. T57313/2009, in the name of the applicant and the first respondent be ordered to re-register the covering bond over the property.

[30] The fourth respondent is to pay the costs of the application.

_________________

N. GUTTA

JUDGE OF THE HIGH COURT

APPEARANCES

DATE OF HEARING : 31 MARCH 2011

DATE OF JUDGMENT : 27 MAY 2011

COUNSEL FOR APPLICANT : ADV L.J. LOWIES

COUNSEL FOR 4TH RESPONDENT : ADV A.B. ROSSOUW SC

ATTORNEYS FOR APPLICANT : SMIT STANTON INC.

(Instructed by CONNIE PRINSLOO ATTORNEYS)

ATTORNEYS FOR 1ST RESPONDENT : VAN ROOYEN TLHAPI WESSELS INC.

ATTORNEYS FOR 4TH RESPONDENT : NIENABER & WISSING

(Instructed by GROBLER LEVIN & SOONIUS)