REPUBLIC OF SOUTH AFRICA

SOUTH GAUTENG HIGH COURT, JOHANNESBURG

CASE NO: 10/13125  

(1)	REPORTABLE: YES / NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED. 

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                   DATE			        SIGNATURE

In the matter between:

TIREPOINT (PTY) LTD						            Applicant

and

PATREW TRANSPORT CC				          First Respondent

IVAN MOHAMMED						     Second Respondent

PATRICIA RUTH MOHAMMED				         Third Respondent

ALICIA BRONWAINE LESLEY- ANNE MOHAMMED       Fourth Respondent

______________________________________________________________ 

J U D G M E N T
______________________________________________________________ 

MOSHIDI, J:

INTRODUCTION

[1]	In the notice of motion, the applicant, a company with limited liability and duly registered in accordance with the Company Laws of the Republic of South Africa, seeks the following order:

1.1	that the following immovable properties owned by the second respondent be declared  executable;

1.2	Portion 39 (a portion of portion 31), Erf 330 Libradene Extension 1 Township, Registering Division I.R., the Province of Gauteng measuring 462 (four hundred and sixty two) square metres, held by Deed of Transfer; T074058/04; and 

1.3	A ½ share in Erf 798 Ravenswood Extension 61 Township, Registration Division I.R., the Province of Gauteng, measuring 346 (three hundred and forty six) square metres, held by Deed of Transfer; T037003/08.

[2]	That the costs of the application be costs in the execution.

[3]	I shall henceforth, and for ease of reference, refer to the above mentioned properties as “the properties”.

THE PARTIES 

[4]	The first respondent is a close corporation, duly incorporated and registered in accordance with the Close Corporations Laws, having its chosen domicilium citandi et executandi at 7 Haupt Street, Delmo Park, Boskburg. The second respondent is an adult businessman, having his chosen domicilium citandi et executandi  at 7 Haupt  Street, Delmo Park , Boskburg. He is the managing director of the first respondent.

THE APPLICANT’S CLAIM

[5]	The applicant’s claim against the first respondent and the second respondent is based on a written agreement entered into in December 2009 in terms of which the respondents acknowledge themselves to be indebted to the applicant for payment of the sum of R331 350-42. In addition, on 8 December 2009, the second respondent bound himself jointly and severally unto and in favour of the applicant as joint and several co-principal debtors with the first respondent for the repayment of any amounts which were due or may thereafter become owing by the first respondents to the applicant from whatsoever cause, “the suretyship”.

THE FIRST RESPONDENT AND SECOND RESPONDENT’S DEFAULT

[6]	As a result of the respondents’ failure to comply with the agreement of repayment, the applicant instituted action. The summons was served on the respondents on the 13th April 2010. On the 3rd June 2010 summary judgment was granted against the first respondent and the second respondent jointly and severally. A writ of execution was issued against the movable goods of the first and the second respondents on the 29th September 2010.

THE JOINDER OF THE THIRD RESPONDENT AND THE FOURTH RESPONDENT

[7]	It is common cause that subsequent to the filing of the respondents’ answering affidavit in the present application, Mrs Patricia Ruth Mohammed (the third respondent) and Ms Alicia Bronwaine Lesley-Anne Mohammed (the fourth respondent), were joined in these proceedings by virtue of their respective co-ownership of the properties with the second respondent. The third and the fourth respondents have filed opposing papers. The third respondent is a businesswoman, and is married to the second respondent in community of property. She is a co-owner with the second respondent, of Portion 39, Erf 330 Libradene Extension 1 Township, mentioned in the Notice of Motion set out earlier in this judgment. The third respondent and the second respondent are also co-owners with the fourth respondent of Erf 798 Ravenswood, Extension 61 Township, also described in the Notice of Motion. The fourth respondent, also a businesswoman, is the second respondent’s daughter. I deal with the grounds of opposition of the third and fourth respondents later hereunder.

THE SHERIFF’S ATTEMPTS TO EXECUTE 

[8]	The sheriff attempted to serve the writ on the 1st November 2010, but found that the first respondent had left the given address. The writ was re-issued against the movable property of the second respondent on the 19th November 2010. On the 23rd November 2010, the sheriff attempted to serve the writ on the second respondent but established that the second respondent’s address could not be found. The writ was again re-issued against the second respondent’s movable property on the 18th January 2011. The sheriff attempted to serve the writ on the second respondent on the 3rd February 2011, but found that the second respondent was unknown at the given address.

[9]	It is significant that the first respondent and the second respondent have effected payment to the applicant of the amount of R100,000.00 on the 17th August 2010. However, thereafter, the respondents have made no further attempts to satisfy the judgment debt in any respect. As a consequence of the above, the applicant contends that it has no other remedy available but to execute against the properties of the second respondent in order to obtain payment of the amount owed by the respondents. 

THE SECOND RESPONDENT’S CONTENTIONS

[10]	In his answering affidavit, which is rather scanty, the second respondent admits that since the granting of the summary judgment, he has made payment of the aforesaid amount of R100,000.00 to the applicant. However, the second respondent also raises essentially two defences against an order declaring the properties executable. The first, is that the failure of the applicant to have joined the third respondent and the fourth respondent in this application, was defective. It is common cause that once the true facts were discovered from the answering papers, the applicant duly brought a successful application for the joinder of the third respondent and the fourth respondent. I need say no more about this defence. The second defence raised by the second respondent is that the applicant has not exhausted all its remedies relevant to his movable property before launching the instant application relevant to his immovable property. In this regard, the argument is that the applicant does not have a nulla bona return from the sheriff in regards to all the writs of execution. Further, that the applicant has not made any attempt to execute or obtain payment from the first respondent. Finally, the second respondent contends that the applicant is aware that he has approached the IDC (presumably the Industrial Development Corporation) on behalf of the first respondent for funding which will be confirmed after certain due diligence have been carried out, and that such funding should be finalised shortly. It is clear that this averment lacks in detail. As contended in the replying affidavit, the issue of funding from the IDC has not been confirmed, and therefore, not guaranteed. The significance of the second respondent’s speculation about possible funding from the IDC, shows, in my view, that the first respondent does not have the means, financial or otherwise, to pay the applicant in satisfaction of the judgment granted in its favour. This confirms the right of the applicant to have launched the instant application, as argued in the replying papers. 

THE THIRD RESPONDENT AND THE FOURTH RESPONDENTS’ CONTENTIONS 

[11]	The third and fourth respondents basically align themselves with the defences of second respondent. In addition,  the third respondent contends that she, being married to the second respondent in community of property, her written consent was not obtained when the second respondent signed the suretyship in favour of the applicant, as is required by  sec 15 (2) (h) of the Matrimonial Property Act 88 of 1984. The third and the fourth respondents also contend that, in the event that properties described are ordered executable, their constitutional rights to adequate housing as enshrined in sec 26 of the Constitution will be compromised. The other defences raised by the respondents are plainly bereft of any merit. 

[12]	 I deal first with the contention that the applicant has not secured from the sheriff, a nulla bona return. It is trite that no writ of execution may be issued as against the immovable property of any person until a return has been made of any process that may have been issues against his/her movable property. Proof that there is either no sufficient property or insufficient movable property to satisfy the judgment is ordinarily supplied by a nulla bona return. Rule 45(1), (3) and (4) of the Uniform Rules of Court provide that:

“(1) 	A judgment creditor may, at his or her own risk, sue out of the office of the registrar one or more writs for execution thereof corresponding substantially with Form 18 of the First Schedule. 

“(3) 	Whenever by any process of the court the sheriff is commanded to levy and raise any sum of money upon the goods of any person, he shall forthwith himself or by his assistant proceed to the dwelling- house or place of employment or business of such person (unless the judgment creditor shall give different instructions regarding the situation of the assets to be attached), and there -  

	(a)	 demand satisfaction of the writ and, failing satisfaction, 

(b) 	demand that so much movable and disposable property be pointed out as he may deem sufficient to satisfy the said writ, and failing such pointing out, 

(c)	 search for such property.

Any such property shall be immediately inventoried and, unless the execution creditor shall otherwise have directed,…”

“(4)	The sheriff shall file with registrar any process with a return of what he has done thereon, and shall furnish a copy of such return and inventory to the party who caused such process to be issued.”

In the present matter, the undisputed evidence show that the sheriff of the court made at least one unsuccessful attempt to execute the writ on the first respondent at an address which is also the second respondent’s place of business address. There were also several unsuccessful attempts to execute the writ at the second respondent’s chosen address. The respondents, while alleging that the applicant has failed to exhaust its remedies in regard to their movables, have, however, failed in their answering and opposing papers to mention at all any movable assets against which the writ can be executed to satisfy the judgment debt. In Silva v Transcape Transport Consultants and Another 1999 (4) SA 556 (W), it was observed and emphasised that;

“Rule 45(1) of the Uniform Rules of Court provided that no such process shall issue against the debtor’s immovable property until a return was made of any process issued against his movable property and the Registrar perceived therefrom that he did not have sufficient movable property to satisfy the writ. In the instant case the first respondent had twice attempted to attach the applicant’s movables but the applicant had on each occasion refused or failed to point out any attachable movable assets.”

THE NULLA BONA RETURNS

[13] 	In dealing with the Courts’ general discretion under the common law to declare immovable property executable, Wunsh J held that Rule 45(1) neither removed nor limited the Courts’ above-mentioned common-law discretion. The learned Judge further held that, it appeared that the applicant had indeed failed to point out movable property for the satisfaction of the judgment debt in a ‘tricky manner’ and that first respondent was entitled to execute against applicant’s four immovable properties. In the present matter, the respondents have not indicated any movable property belonging to them and that could be attached by the sheriff in order to satisfy the judgment obtained against the first respondent and the second respondent. The applicant ought to succeed in its claim. In any event, it is not in dispute that prior to the applicant filing its replying affidavit, to the third and fourth respondents’ answering affidavit, the applicant was placed in receipt of nulla bona returns from the sheriff in respect of the first respondent and the second respondent. These returns form part of the papers and are marked annexures ”RA1” and “RA2”, respectively. These nulla bona returns show that the warrants of execution were served on the second respondent personally. The contention that the applicant has failed to excuss against the movable property of the first respondent and the second respondent is therefore without merit. 

THE THIRD RESPONDENT’S MARRIAGE IN COMMUNITY OF PROPERTY AND SURETYSHIP

[14]	I turn to the third respondent’s argument that she, being married in community of property to the second respondent, ought to have given her written consent or authority at the time when her husband, the second respondent, signed the suretyship for the debts of the first respondent. Section 15(1) and (2) of the Matrimonial Property Act 88 of 1984 provide:

“(1)	Subject to the provisions of subsections (2), (3) and (7), a spouse in a marriage in community of property may perform any juristic act with regard to the joint estate without the consent of the other spouse.

(2)	Such a spouse shall not without the written consent of the other spouse -

(a)	alienate, mortgage, burden with a servitude or confer any other real right in any immovable property forming party of the joint estate.

(b)	– (g) (not applicable) 

(h)	bind himself as surety.”

Section 15(6) of the same Act provides that:

“The provisions of paragraphs (b), (c), (f), (g) and (h) of section 2 do not apply where an act contemplated in those paragraphs is performed by a spouse in the ordinary course of his profession, trade or business.”

In the instant matter, it is more than plain that, the second respondent, when he signed the deed of suretyship and bound himself as surety and co-principal debtor for amounts owed to the applicant by the first respondent, did so in the ordinary course of his business. See Amalgamated Banks of South Africa Bpk v Goede en ‘n Ander 1997 (4) SA 66 (SCA). (cf Nedbank Ltd v Van Zyl 1990 (2) SA 469 (A), where it was the wife who stood surerity for the debts of her husband in a marriage in community of property.) In any event, if the defence now raised based on the suretyship was a bona fide answer to the applicant’s claim in the main action, then one would have expected that such defence would have been raised by the second respondent in the summary judgment application.  Alternatively, such a defence, if meritorious, would have been the basis for a rescission of judgment application by the second respondent.  It is not in dispute that the second respondent has not, at least at the time of the hearing of this matter, applied for rescission of judgment.  The defence under discussion raised by the third respondent, in particular, must therefore fail.

THE RIGHT TO ADEQUATE HOUSING IN TERMS OF SECTION 26(1) OF THE CONSTITUTION

[15] 	Finally, I deal with the defence based on the right of adequate housing relied upon by the second respondent and the third respondent. Section 26 of the Constitution provides that:

	“(1) 	Everyone has the right to have access to adequate housing.

(2) 	The state must take reasonable legislative and other measures, within its available resources, to achieve the progressive realisation of this right.

(3) 	No one may be evicted from their home, or have their home demolished, without an order of court made after considering all the relevant circumstances.  No legislation may permit arbitrary evictions.”

[16] 	There are numerous judgments by various courts on the question of judicial oversight in declaring immovable property executable, since the ground-breaking judgment in Jaftha v Schoeman and Others; Van Rooyen v Stoltz and Others 2005 (2) SA 140 (CC).  In the latter case sec 66(1)(a) of the Magistrates’ Court Act 32 of 1944 was found to violate sec 26(1) of the Constitution, in as far as it permitted the execution against the homes of poor debtors, where they lost their security of tenure.  The cases of Standard Bank of South Africa Ltd v Saunderson and Others 2006 (2) SA 264 (SCA) and Nedbank Ltd v Mortinson [2006] 2 All SA 506 (W), also provide some persuasive practical guidelines or suggestions on when to declare immovable property specially executable.  The latter two cases, however, are distinguishable from the facts in the present matter in that they dealt with orders of execution granted by the registrars when granting default judgment in terms of Rule 31(5) of the Uniform Rules.  In the instant matter summary judgment was granted by Mayat J on 30 June 2010.

[17] 	Jaftha which also dealt with unemployed, sickly, and poor debtors, is equally distinguishable from the facts of the instant matter.  However, what is of significance in Jaftha is what Mokgoro J said at p 158, para [42]:

“The interests of creditors must not be overlooked.  There might be circumstances where, notwithstanding the relatively small amount of money owed, the creditors’ advantage in execution outweighs the harm caused to the debtor.  In such circumstances, it may be justifiable to execute …”

More recently, in Gundwana v Steko Development and Others 2011 (3) SA 608 (CC), at para [53], Froneman J said:

“… But these considerations do not challenge the principle that a judgment creditor is entitled to execute upon the assets of a judgment debtor in satisfaction of a judgment debt sounding in money.  What it does is to caution courts that, in allowing execution against immovable property, due regard should be taken of the impact that this may have on judgment debtors who are poor and at the risk of losing their homes.  If the judgment debt can be satisfied in a reasonable manner, without involving those drastic consequences, that alternative course should be judicially considered before granting execution orders.”

APPLICATION OF THE ABOVE LEGAL PRINCIPLES TO THE FACTS OF THE PRESENT MATTER

[18] 	In applying the above legal principles to the facts of the instant matter, it becomes more than plain that the prejudice that the applicant would suffer in not being able to obtain the relief sought will outweigh any prejudice that the second respondent and the third respondent would suffer.  There is no evidence that the properties which are sought to be declared executable where acquired by means of or assistance of a state subsidy.  Moreover, the debt which is sought to be enforced was not incurred to acquire the properties, but clearly arises from a commercial transaction. From the evidence, the properties are used apparently for residential purposes.  In the answering affidavit, the third respondent contends that “the applicant has failed to advise the fourth respondent and myself of our rights in terms of the Constitution pertaining to our rights to housing and which will be impeded should the properties and/or a portion thereof be sold in execution to a third party subsequently”.  She goes on to state that:

“The applicant has failed to follow the correct procedure to declare the property executable.  The properties earmarked to be declared executable are residential properties and families reside therein and due regard must be had to all surrounding circumstances.”

From this, it is significant that no details are supplied of the “families” who occupy the properties.  The properties, from a close reading of the title deeds, are not inexpensive by far.  The respondents are not indigent persons.  They are described as business persons.  The respondents have failed dismally to inform the Court of any other ways that the applicant can satisfy the judgment. In addition, the respondents have failed to suggest any difficulties they may face with regard to their obtaining alternative adequate accommodation in the event of the order sought being granted in favour of the applicant.

18.1 	The third respondent’s allegation that she was not informed of her right to adequate housing, is incorrect. In the notice of motion attention was drawn to the provisions of sec 26(1) of the Constitution.  

18.2 	In Mkhize v Umvoti Municipality and Others 2012 (1) SA 1 (SCA) the appeal concerned the construction of the judgment and order of the Constitutional Court in Jaftha (supra).  The issue was whether the order made in Jaftha in respect of sec 66(1)(a) of the Magistrates’ Court Act 32 of 1944 requires judicial oversight in all cases of execution against immovable property or only those where the debtor can establish an infringement or potential infringement of the right of access to adequate housing as protected by sec 26(1) of the Constitution.  In dismissing the appeal, and in an unanimous decision, Malan J at para [26] said:

“The object of judicial oversight is to determine whether the rights in terms of s 26(1) of the Constitution are implicated.  In the main a number of cases grappling with Jaftha sought to arrive at that determination without accepting that judicial oversight was required in every case.  How, it must be asked, can a determination be made as to whether s 26(1) rights are implicated, without the requisite judicial oversight?  We are unable to understand the difficulty of applying the principle that it is necessary in every case to subject the intended execution to judicial scrutiny to see whether s 26(1) rights are implicated. To not undertake such an enquiry would in fact render the procedure unconstitutional.  Following that simple principle would have avoided the confusion caused by a number of judgments.”

		At para [29]:

“In the present case, judicial scrutiny of the common cause facts as set out in the stated case leads to the compelling conclusion that s 26(1) rights are not implicated.  The court below was therefore correct in its ultimate conclusion. It is for these reasons that we agree that the appeal should fail.”

In the present matter, the second respondent, the third respondent and the fourth respondent have not shown that their rights of access to adequate housing as entrenched in sec 26(1) of the Constitution will be infringed by an order declaring the properties concerned executable.  I must add that although it is stated from both sides that the properties are utilised for residential purposes, a careful reading of the third respondent’s answering affidavit, suggests rather strongly, that the properties are being used for investments purposes, and not the primary residences of the respondents.  The applicant remains with no alternative remedy to satisfy the judgment it obtained against the first respondent and the second respondent, which is unjust and inequitable having regard to all the relevant circumstances.

CONCLUSION AND COSTS

[19] 	For all the aforegoing reasons, I am satisfied that the applicant has made out a case, on a balance of probabilities, for the relief claimed in the notice of motion. The collective defence of the second respondent, the third respondent and the fourth respondent have no merit and clearly ignores the interests of the applicant as judgment creditor.  There is no reason why the costs should not follow the result.

ORDER

[20] 	In the result the following order is made:

1. 	An order is granted in terms of prayers 1 and 2 of the notice of motion dated 23 February 2011. 

						_____________________________
							     D S S MOSHIDI
						JUDGE OF THE SOUTH GAUTENG
						  HIGH COURT, JOHANNESBURG

COUNSEL FOR THE APPLICANT		G WILKS

INSTRUCTED BY				STUART HARRIS ATTORNEYS

COUNSEL FOR THE RESPONDENTS	I POSTHUMUS

INSTRUCTED BY				JOHN G HUNTER ATTORNEYS

DATE OF HEARING				10 NOVEMBER 2011 

DATE OF JUDGMENT			16 MARCH 2012