CASE LAW UPDATE

Facts: The applicant issued a summons to the defendant because of an averred breach of the terms of a loan agreement and mortgage bond. Service of the summons and particulars of claim was effected at the address chosen as the domicillium in the loan agreement and mortgage bond on a person in occupation thereof at the time. An application for default judgment declaring the property executable and to set a reserve price was personally served on the defendant at his offices a day before the hearing of the default application. Service was attempted at the chosen domicillium and a note left by the sheriff. An order for default judgment and declaring the property specifically executable was granted but the execution was suspended for 6 months. The court granted an order that a reserve price be set at R490,864.79.

Application: A sale in execution was arranged but no details are given, and no founding affidavit was filed in respect of the application to reduce the reserve price. The applicant brought a Rule 46A(9)(d) application for a reduction of the reserve price of the property to be sold in execution.

Discussion: An attempt to sell the property was seemingly made but no affidavit in support of the application in terms of Rule 46A(9)(d), a reduction of the reserve price, is referred to in the notice of motion. No proof of service of the application is uploaded and no documentation in respect of any previous sale is included in the documents before the court. In the return of service of an application to reduce the reserve price, a return of service is attached. It states that the defendant has left the given address and that the property is occupied by a tenant. Despite this, the return states that service was effected by attaching the document to the outer gate of the property as it was found locked. The return further states that the property has high walls, the gate is always locked and there is no intercom. What the basis is for the statement that the property is always locked, is unknown. How the property was advertised or the sale brought to the attention of the public is crucial. If only a notice is put on a notice board at court and the sale advertised in the Government Gazette, the purpose of the rule is defeated.

Findings: Some of the information is to be found in the application for substituted service. No affidavit has been filed in support of the application in terms of Rule 46A(9)(d). There are simply no facts before court in support thereof. The applicant must first set out that it was not possible to serve in terms of the provisions of Rule 4(1). Secondly, it must be stated that the rule is only applicable when the person’s whereabouts cannot be ascertained. These are the two requirements of the threshold for making use of the provisions of Rule 4(2). There is no reason why service cannot be effected at the work place of the defendant or outside of the normal times for service. Those details should be known to the plaintiff, except if it changed without its knowledge. If the person’s contact details changed, the person is often traced by a tracing agent, who will provide a report and charge no fee if the person could not be traced. The application for substituted service does not properly refer to the annexures. No reason is provided why the application was not brought timeously.

Order: The application for substituted service is dismissed. The application to reduce the reserve price is dismissed. Should it not be possible to sell the property through private treaty the plaintiff must apply to court to set a new reserve price before plaintiff may proceed to issue a new writ of execution and conditions of sale as required in terms of the Uniform Rules.

SNYMAN AJ

Facts: The applicant took transfer of a property and, in 2008, borrowed money from Main Street, which loan was guaranteed by Changing Tides (first respondent), who passed a mortgage bond over the property in its favour. The loan agreement and mortgage bond were administered by SA Home Loans. The applicant defaulted on the repayment and summons was issued in January 2009. In February 2009 the applicant paid an amount of R18,093.29 towards the arrears. This discharged the arrears but not the costs. The applicant thereafter continued to pay but fell into further arrears later in 2009. The applicant signed a consent to judgment and signed the necessary verifying affidavit acknowledging an indebtedness to Changing Tides in the sum of R279,866.14, as well as consenting to an order declaring the property executable. At the time of signing the consent to judgment, the arrears and the indebtedness referred to in the January 2009 summons had been extinguished. From the bank statements and the application for default judgment, between the date of the signing of the confession to judgment, and the application for default judgment, numerous and various payments had been made by the applicant towards the property.

Application: The applicant seeks to set aside the sale in execution and transfer of the property. In seeking to set aside the sale in execution and the transfer of the property to Sayed (second respondent), the applicant also seeks an order against the Registrar of Deeds (third respondent) to revive the title deed in terms of which Sayed took transfer of the property.

Discussion: Changing Tides admits that there was payment of the sum of R18,093.29 on 14 February 2009, which would have brought the applicant's arrears up to date. By virtue of this concession, the applicant has sought to argue that the basis for the original summons was thereby extinguished and, accordingly, the right to seek default judgment on the original cause of action had fallen away. The applicant again fell into arrears with her new monthly instalments, and a further settlement agreement was concluded during or about December 2020, which settlement agreement was not adhered to by the applicant. Arising out of the failure by the applicant to pay the amounts under that settlement agreement, Changing Tides dusted off the default judgment granted in December 2013, issued a warrant of execution, and sold the property in October 2021 at a sale in execution. Changing Tides indicated that, notwithstanding the payment of the arrears amount, there was still the issue of costs outstanding which had not been paid at that time. The applicant correctly identified that those legal costs were not yet due at the time she made the initial payment and were only due when taxed or agreed. There is no evidence that those costs were ever taxed or agreed.

Findings: The parties had reinstated the agreement and at least by 2016 there was no amount outstanding. The cause of action for the 2009 summons and the 2013 default judgment had been extinguished. The applicant has further argued that considering Nkata v FirstRand Bank Ltd 2016 (4) SA 257 (CC) and the reinstatement, the subsequent sale in execution was invalid and the transfer of the property and the registration in the name of the second respondent stands to be set aside. As the sale in execution was improper for want of a valid causa, the entire sale and the transfer to Sayed is invalid. The reinstatement of the original title deed must follow. As regards Sayed, those amounts which have been paid to the municipality are amounts which are conceded by the applicant and the court grants judgment in his favour against the applicant for such amounts. The applicant cannot avoid this liability, for she has enjoyed the benefit of and made use of the lights and water. She has benefited at the expense of Sayed.

Order: The credit agreement between the first respondent and the applicant is reinstated. The default judgment granted on 9 December 2013, and the subsequent execution against the applicant's property, has no force or effect. The fourth respondent's auction is set aside. Judgment is granted in favour of the second respondent against the applicant for payment of the sum of R195,027.02.

HARRISON AJ

Facts: Smuts Property is a close corporation that involved itself in the sale of immovable properties. Its sole member is Mr Smuts who is also an attorney. When the applicant (Mr Wilson) entered into an agreement to purchase a property from Smuts Property for an amount of R3,390,000, a deposit of R670,000 was paid into the interest-bearing trust account of the attorneys and conveyancers chosen by Smuts Property. Du Toit Smuts is the firm of attorneys picked for that purpose and to register the property into the name of the applicant. Mr Smuts is a member and/or a consultant of Du Toit Smuts. The applicant later requested that the contract be cancelled by agreement due to material non-disclosure by Smuts Property. This related to the discovery that SANRAL was planning the construction of a four-lane highway to pass directly adjacent to the property. The applicant received no response to his letter. Smuts Property thereafter proceeded to sell the property to a third party for R3 million, which was R390,000 less than the purchase price in the contract.

Application: This shortfall is the amount that was withheld by Du Toit Smuts when refunding part of the deposit to the applicant, as “liquidated damages” suffered by its client, Smuts Property, as a result of the applicant’s repudiation of the contract. This amount (plus interest) was later paid to Smuts Property by Du Toit Smuts. In this application, the applicant seeks an order that Du Toit Smuts and Smuts Property pay him the sum of R390,000, with interest at the prescribed rate from 31 March 2017 to date of payment. Du Toit Smuts claims that the applicant’s claim has prescribed.

Discussion: The contract between the applicant and Smuts Property forms the basis of the payment of the deposit money. It also provided that the deposit shall be kept in a separate interest-bearing trust account for the benefit of the applicant. The only circumstances under which the deposit could be paid to Smuts Property is upon transfer of the property or what is covered under clause 12; all of which did not take place until the contract lapsed. Had the truth been told when the balance of the deposit was paid to Smuts Property, the debt would have become due there and then, as the deposit in the trust account would have become a debt and payable. But this was untrue as the deposit remained in the trust account until 13 December 2019. For all this period, the money was still being held for the applicant and for his benefit irrespective of his request that the funds be released to him.

Findings: Du Toit Smuts continued to deduct or charge a monthly administration fee from the interests accumulating in the account, without failure. The charging of a fee is another reason that Du Toit Smuts was conscious that it continued to hold the funds for the applicant and for his benefit and continued to charge him for that even during that period. This makes it impossible for the applicant’s claim to prescribe. For the applicant to have to resort to court to get what is rightfully his, is deplorable. It has been eight years now since the deposit was made towards the purchase of the property. The manner in which the applicant was literally pushed from pillar to post, ignored and treated with disrespect over his own money, deserves a show of disapproval by the court.

See paras [40], [43] and [44] regarding the disciplinary proceedings at the LPC.

Order: Du Toit Smuts and Smuts Property are ordered to pay R390,000 (the capital amount) plus interest accumulated as of 13 December 2019 (R43,672.94), totalling R433,672.94 plus interest calculated at the prescribed rate from 17 December 2019, to the date of payment. Du Toit Smuts and Smuts Property are ordered to pay the costs of this application on attorney and client scale C, jointly and severally, the one paying, the other to be absolved. The Chief Registrar of this Division is directed to bring this judgment to the attention of the LPC, Mpumalanga.

RATSHIBVUMO J

Facts: The appellant and the deceased had been married since 2008. They had married on the day that she turned 21 and had two children together. At the time, the eldest (a girl) was 7 years old and the youngest (a boy) was 3 years old. The appellant worked as a police officer and the deceased in an office. According to the appellant, on the evening of 5 November 2014, often referred to as “Guy Fawkes Night”, the family had shared a meal, and they went to bed. The doors of the house were locked and all the windows were closed. The appellant and the deceased were awoken by a loud noise and the appellant went outside to look around and when he came back inside he found the deceased with a wound to her forehead and went to the safe in his bedroom (where he kept his service pistol) and took the pistol out of the safe.

Appeal: In 2016, the appellant was arraigned before the High Court on a single charge of murder. He was subsequently, in 2017, found guilty and sentenced to life imprisonment. The appellant was granted bail and is presently out on bail. He applied for leave to appeal against both his conviction and sentence which was refused by the court a quo. In 2021, leave to appeal to the full court of this Division was granted by the Supreme Court of Appeal against the conviction only.

Discussion: It is not in dispute that three shots were fired or that the deceased was struck by only one. The windows of the main bedroom were closed at the time the deceased was killed and only two holes were discovered in the window. Captain Blignaut, the Forensic Ballistic Examiner, concluded that only one round had passed through each of the two holes and that accordingly, since the windows were all closed, the third round could only have been fired from inside the bedroom. Since the only two persons who were in the room at the time that the deceased was shot and killed were her and the appellant, the ineluctable inference was that it was the appellant who had shot and killed the deceased.

Findings: In evaluating the evidence before it, the court a quo found that the case was to be adjudicated on the totality of the evidence that was before it and in so doing was guided by the dicta in R v Blom 1939 AD 188 in regard to inferential reasoning. The evidence in the present matter establishes the following facts: the deceased and the accused were alone in their bedroom; the deceased was shot in the head and died as a result; the windows to the bedroom were closed at all material times; three shots were fired, one striking the deceased and two striking the bedroom wall; there were two holes in the bedroom window indicating that two of the shots had been fired from outside; and expert evidence established that one of the three shots had been fired from inside the bedroom. On the basis of the evidence, the court a quo correctly reasoned that the only inference to be drawn from these facts was that the appellant had fired the fatal shot, and it is for this reason that the appeal must fail.

Legal representative: While it is accepted that it is the duty of the appellant’s legal representatives to act with the utmost care and diligence in pursuing the interests of the appellant, in the present matter counsel for the appellant was unrestrained by any sense of collegiality in casting aspersions upon the honesty, integrity and professionalism of not only the counsel who had represented the appellant at the trial, but the State counsel and also the judge a quo. Counsel’s intemperate conduct went on to include ill-considered and unnecessary remarks about the conduct of the judge a quo’s conduct of the proceedings during the reconstruction of the record, the absence of one of the State counsel during the reconstruction, and continued on to include counsel who appeared for the respondent in this appeal. Such aspersions ought never to have been cast. There is nothing on the record to suggest that any of the persons who participated in the proceedings conducted themselves in any manner other than one which was fair, professional and consonant with their respective oaths of office.

Order: The appeal is dismissed. The appellant’s bail is revoked and he is ordered to report to the De Deur Police Station within 48 hours of the handing down of this order in order to commence serving the life sentence.

MILLAR J (NEUKIRCHER J and KOOVERJIE J concurring)