Xylo Trading 253 CC v Hlahla N.O and Others (077483/2023) [2023] ZAGPPHC 703 (23 August 2023)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO: 077483/2023

(1) REPORTABLE: Yes☐/ No ☒

(2) OF INTEREST TO OTHER JUDGES: Yes☐ / No ☒

(3) REVISED: Yes ☐ / No ☒

Date: 22 August 2023

WJ du Plessis

In the matter between:

XYLO TRADING 253 CC

APPLICANT

and

MPHO ANNA HLAHLA NO

1ST RESPONDENT

RETHABILE ITUMELENG KIKINE NO

2ND REDPONDENT

SOLOMUZI OCTAVIAN MABUZA NO

3RD RESPONDENT

GILBERTO PEREIRA MARTINS NO

4TH RESPONDENT

LITA MBOKOTHO NO

5TH RESPONDENT

BUSISIWE LINDELWA MHAGA NO

6TH RESPONDENT

EZRA BOY NDWANDEWE NO

7TH RESPONDENT

GUGULETHU WENDY PHAKATHI NO

8TH RESPONDENT

PATIENCE PULENG RATLABALA NO

9TH RESPONDENT

SHERIFF OF BRITS

10TH RESPONDENT

SIMON JOHANNES MOKOTEDI

11TH RESPONDENT

BENEDICTOR LEAH TLOU-MOKOTEDI

12TH RESPONDENT

REGISTRAR OF DEEDS

13TH RESPONDENT

JUDGMENT

DU PLESSIS AJ

Background

[1] This is an application to interdict the transfer of property described as Portion [...] Erf 2[...] Ga-Rankuwa Unit 2 Township Registration Division JR North West Province ("the property") pending the hearing of part B of the application, the rescission application, of an order granted on 31 October 2019 by Mokose J.

[2] The property served as security in a contractual agreement between the Applicants, represented by Mr Mdumele, and the Gauteng Partnership fund, represented by Ms Muvevi. The agreement was for a loan facility of R11 207 314, and a mortgage bond was taken on the property as security in the case of default or breach.

[3] The Sheriff (10th Respondent) sold the property at auction on 4 June 2022, following a default order granted on 31 October 2019 in favour of the First to Ninth Respondents and an order to declare the immovable property executable on 11 November 2019.

[4] On 22 May 2023, the Applicant avers, a member of the Applicant, Mr Sikander Mahomed, was informally informed by a GPF employee that the property had been sold on auction. When he heard this news, he asked the other members if they were aware, to which they replied that they were not.

[5] The Applicant then asked the First to Ninth Respondent and the 10th Respondent how the property was sold without the knowledge of the Applicant's members. It was then, the Applicant states, that they learnt that the notices for the default and sale in execution were not (on their version) properly served on the Applicant's members. They were thus not afforded an opportunity to defend such actions and or application.

[6] Due to the improper service by the Sheriff, the Applicant states, it requested the first to ninth Respondents to suspend the transfer of the property to the 11th and 12th Respondents, which the first to ninth Respondents refused. This is the reason for the urgent application.

[7] The Applicants state that the matter is urgent because the property was sold on 4 June 2022 and the transfer procedure commenced. Once there is a registration in the names of the 11th and 12th Respondents, the Applicant will suffer the loss of property unlawfully and irregularly, it argues. If the hearing is set down in

the ordinary course, then the property might be transferred before the hearing.

[8] The 1st to 9th Respondents raise various issues in defence, including whether Mr Mahomed could depose an affidavit, the lack of authority of Mr

Mohamed to act and the non-joinder of the Sheriff in Pretoria. Likewise, the 11th and 12th Respondents (for the purchasers) raise locus standi and non-joinder. Both deny that the application is urgent, with the 11th and 12th Respondent raising the issue of "substantial redress is due course".

[9] As the matter is brought on an urgent basis, the Applicant must first convince the Court that it is indeed urgent before the Court can consider the merits of the application.

The law on urgency

[10] Rule 6(12)(b) requires that

"(b) In every affidavit or petition filed in support of any application under paragraph (a) of this subrule, the applicant must set forth explicitly the circumstances which is averred render the matter urgent and the reasons why the applicant claims that applicant could not be afforded substantial redress at a hearing in due course (my emphasis)."

[11] There are two elements to this. For one, the time frames in Rule 6 are shortened. The second element relates to the test that is laid down: whether the Applicant will be able to seek substantial redress in due course to protect his rights. It should be noted that possible harm alone does not indicate urgency – the focus is on the possibility of substantial redress. This should be distinguished from irreparable harm required for an interim interdict. This question only arises when the matter is considered

urgent enough to determine the merits.

[12] The question that thus must be answered first is whether the Applicant will not be afforded substantial redress in due course should the matter not be heard as a matter of urgency.

Does the Applicant have substantial redress in due course?

[13] Should the court not grant the interdict today, would the Applicant be be afforded substantial redress in due course? The answer is yes.

[14] In Joosub v JI Case SA (Pty) Ltd (now known as Construction & Special Equipment Co (Pty) Ltd[1] it was said that the owner of immovable property is entitled to have his property restored from a bona fide purchaser at a sale in execution where transfer has not taken place, and the sale is later rendered void because of the rescission of the judgement that validated the sale. In other words, if there is a rescission before the transfer of property, then an owner is entitled to restoration once the rescission application is successful.

[15] In Vosal Investments (Pty) Limited v City of Johannesburg,[2] the court held that the purchaser of property who became aware of the claims of the owner (the owner's application for rescission) before registration, is obliged to restore possession to the owner, once the judgment has been rescinded. This is because the purchaser is aware of the attack on the judgment and the risk of the transfer.

[16] Knox v Mofokeng[3] dealt with the rights of bona fide purchasers of property at a sale in execution where the judgment in terms whereof the sale in execution was effected, has been rescinded. The judgment focussed on the validity of the transfer of the immovable property, also to a chain of successive purchasers. The court stated that if there was transfer of ownership by the time the judgment has been rescinded, then the judgment debtor is not entitled to recover possession of the property, unless it can be shown that the judgement or sale in execution is a nullity.[4]

[17] Case law[5] sets out why: where default judgment is rescinded after a sale in execution, both the default judgment and the warrant of execution

issued in terms of the judgment become null and void, as between the judgment creditor and debtor. Thus, the judgment debtor is entitled to have the status quo ante restored against the judgment creditor. Since the warrant and sale of execution all depend on the default judgment, once the judgment is rescinded, the warrant and sale in execution have no legal basis between the parties in litigation.

[18] All this case law indicates that the Applicant has substantial redress in due course, even if the property is transferred. Moreover, the new owners know about the rescission application and the risks involved in the transfer, and thus fall in the category of Vosal Investments case.

[19] Apart from that, did the Applicant bring the rescission application as soon as it knew about the reasons for the sale of the property, the rescission application would be close to finalisation. The bringing of a rescission application in part B, is not dependent on part A being granted.

Order

[20] I, therefore, make the following order:

1. The application is struck from the roll, with costs.

WJ DU PLESSIS

Acting Judge of the High Court

Delivered: This judgement is handed down electronically by uploading it to the electronic file of this matter on CaseLines. It will be sent to the parties/their legal representatives by email.

Counsel for the Applicant: Mr Mokgatsi Instructed by: Pillay Thesigan Inc Counsel for the 1st – 9th respondents: Mr Mothapo Nhlapo Instructed by: POSWA Inc Counsel for the 11th & 12th respondent: Ms Barnard Instructed by: Van Velden Duffey Incorporated Date of the hearing: 22 August 2023 Date of judgment: 23 August 2023

[1] 1992 (2) SA 665 (N).

[2] [2009] ZAGPJHC 28; 2010 (1) SA 595 (GSJ).

[3] [2012] ZAGPJHC 23; 2013 (4) SA 46 (GSJ).

[4] Para 6.

[5] Lottering v SA Motor Acceptance Corporation Ltd 1962 (4) SA 1 (E) at 3H-4B; Jasmat v Bhana 1951 (2) SA 496 (D); Maisels v Camberleigh Court (Pty) Ltd 1953 (4) SA 371 (C).