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Menqa and Another v Markom and others (604/06) [2007] ZASCA 172; [2007] SCA 172 (RSA) (30 November 2007)
.RTF of original document
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
CASE NO: 604/06
Reportable
In the matter between:
DESMOND MENQA
First Appellant
OWEN PETER ROUX
Second Appellant
and
PATRICK MARKOM
Respondents
and 7 Others
:
Scott
Summary:
Sale in execution of residential property – s 66(1)(a) of Magistrates’
Courts’ Act 32 of 1944 – warrant of execution invalid as issued by clerk of magistrate’s court without judicial
oversight as required by Jaftha v Schoeman; Van Rooyen v Stoltz 2005 (2) SA 140 (CC) – sale in execution also invalid and not
saved by s 70 of Act 32 of 1944 – sale in execution and all subsequent sales of property declared null and void – appropriate
remedy
Neutral citation: This judgment may be referred to as Menqa & Another v Markom & Others [2007] SCA 172 (RSA)
JUDGMENT
VAN HEERDEN JA:
Introduction
[1]
This is an appeal against a judgment and order of the Cape High Court (Zondi AJ) confirming a rule nisi terms of which, inter alia, the sale in execution of a certain residential property, namely erf 23584 Maitland, situated at 17 Camden
Street, Maitland (‘the property’), as well as all subsequent sales of the property, were declared to be null and void.
The first respondent in this appeal – which is before us with the leave of the court a quo – was the applicant in the
court a quo, while the first and second appellantswere cited as the first and second respondents. For the sake of convenience, I shall refer to the parties either by their names or
by their respective designations in the court below.
[2]
The applicant, Mr Patrick Markom (‘Markom’), bought the property from a deceased estate during 1995 for R120 000.
It was occupied at the time by the sixth respondent, Mr Jules Tromp (‘Tromp’), in terms of a lease with the previous
owner. The executor of the deceased estate terminated the lease and gave Tromp notice to vacate the property by 1 June 2005, which
the latter failed to do. On 4 June 1995, during a visit to the property by Markom, a scuffle broke out between him and Tromp which
gave rise to a claim for damages for personal injury instituted by Tromp against Markom during September 1996. This culminated, on
19 November 1999, in a default judgment being granted by the magistrate’s court against Markom for an amount of R98 665.45
together with interest and costs. It is that judgment which formed the basis of the sale in execution which is in issue in these
proceedings.
[3]
According to Markom, who had in the interim taken transfer of the property, he only became aware of the default judgment some four
years later, when a notice was served at the property on Thursday 13 November 2003, notifying him of a sale in execution of the property
scheduled for Monday 17 November 2003. Markom moved into the property some time before it was registered in his name and, since then,
has been residing there with his family.
[4]
On the morning of 17 November, Markom applied for and obtained, on an urgent basis, an interim order staying the sale in execution
of the property, pending an application for rescission of the default judgment to be brought by him within ten days. By the time
this interim order was received by the sheriff, the sale in execution had already taken place. The second respondent, Mr Owen Roux
(‘Roux’), bid for the property and signed the conditions of sale on behalf of the first respondent, Mr Desmond Menqa
(‘Menqa’). The selling price was R110 000.
[5]
On 1 December 2003 Markom launched an application for rescission of the default judgment granted against him. The application was
set down for hearing in the magistrate’s court on 19 January 2004, but was dismissed on that date because of the non-appearance
of either Markom or his attorney. On 29 February 2004 Markom gave notice of an appeal to the Cape High Court against the order dismissing
his rescission application. He subsequently withdrew this appeal on 27 August 2004, on which date he applied for rescission of the
judgment dismissing his first application for rescission. This second application was dismissed during November 2004 and written
reasons for this order were furnished on 18 August 2005. On 9 September Markom, still not discouraged and now acting in person, noted
an appeal to the Cape High Court against the dismissal of his second application. This appeal was set down for hearing on 25 November
2005. On that date, it was postponed sine diein order for pro bonocounsel to be appointed to represent him.
[6]
In the meantime, on 7 September 2005, the property was transferred to Menqa and the bond over the property in favour of Nedbank was
cancelled. Menqa paid the full purchase price of R110 000, plus interest in the amount of R22 941.78. In addition he paid arrear rates on the
property in the amount of R1 812.24 and legal costs of R6 475.32. The total amount paid by him was thus R141 229.32. The purchase
price plus interest was paid over to the sheriff who in turn paid R103 331.33 to Nedbank to settle the bond over the property and
R26 610.45 to Tromp’s attorneys. On 6 December 2005, Menqa sold the property to Roux for the sum of R490 000. At the time of
the institution of the proceedings in the court below, the transfer of the property to Roux was still pending and it was this transfer
that Markom sought to interdict.
Judgment of the Cape High Court
[7]
In consequence of the judgment of the Constitutional Court in Jaftha v Schoeman & Others; Van Rooyen v Stoltz & Others the court a quo held that the sale in execution was invalid as the warrant of execution pursuant to which the sale had taken place
had been issued by the clerk of the magistrate’s court, without judicial supervision as required by the provisions of s 66(1)(a) of the Magistrates’ Courts Act 32 of 1944 (‘the Act’).
[8]
The Consitutional Court in Jaftha s 66(1)(a)of the Act (as it then read) to be ‘unconstitutional and invalid’ in that it failed to provide for judicial oversight
over sales in execution of the immovable property of judgment debtors. In her judgment, Mokgoro J (writing for a unanimous court)
held that the section constituted an unreasonable and unjustifiable limitation of the fundamental right of access to adequate housing
protected by s 26(1) of the Constitution:
[9]
be amended by a ‘reading in’ of the words underlined below:
‘Whenever a court gives judgment for the payment of money or makes an order for the payment of money in instalments, such judgment,
in case of failure to pay such money forthwith, or such order in case of failure to pay any instalment at the time and in the manner
ordered by the court, shall be enforceable by execution against the movable property and, if there is not found sufficient movable
property to satisfy the judgment or order, or the court, on good cause shown, so orders, then a court, after consideration of all relevant circumstances, may order execution against the immovable property of the party against whom such judgment has been given or such order has been made.’ (Emphasis added.)
[10]
Zondi AJ held that the declaration of invalidity of s 66(1)(a) by the Constitutional Court applied retrospectively and that, accordingly, a warrant of execution obtained, prior to Jaftha, without judicial oversight and thus in violation of the law laid down in that case – without the court making any order limiting
the retrospective effect of its declaration of invalidity – was invalid. The learned acting judge held further that, in the present case, it was clear that the warrant of execution
pursuant to which the property was sold in execution on 17 November 2003 had been issued by the clerk of the court without judicial
supervision and was therefore invalid.
[11]
The court below went on to consider the effect of this finding on the subsequent sale in execution. Section 70 of the Act provides
as follows:
[12]
Lack of judicial supervision
[13]
The first and second respondents assailed the judgment of the court a quo on two bases: first, the applicant had failed in his papers
to establish that the warrant of execution had indeed been issued without the requisite judicial oversight; and second, on the basis
that s 70 of the Act protects their title.
[14]
In his founding affidavit, Markom stated explicitly that he was not aware of the circumstances under which the warrant of execution
was obtained. Thus, so the respondents’ argument went, it might well be that the warrant of execution against the property
was not issued by the clerk of the court in circumstances prohibited by the Jaftha judgment, but was in fact issued by the court on good cause shown.
[15]
There is no merit in this argument. In the answering affidavit deposed to by Menqa, reliance is placed on ‘the re-issued warrant
in respect of the immovable property containing the description of the immovable property’ and a copy of this warrant is attached
to the affidavit. It appears ex facie this copy that the warrant was issued by the clerk of the court without any judicial oversight.
On the respondents’ own version, therefore, the relevant warrant was issued without any prior judicial intervention and so
in contravention of the judgment in Jaftha. It follows that this ground of attack on the judgment of the court below falls to be rejected.
Section 70 of the Magistrates’ Courts Act 32 of 1944
[16]
For the purposes of s 70 of the Act, there must be bad faith or notice of any defect at the time of the purchase; a sale in execution is not liable to be impeached where
the purchaser became aware of a defect only after the sale in execution but before transfer into his or her name had been effected.
[17]
Ordinarily, therefore, an applicant wishing to impeach a sale must prove bad faith or knowledge of the defect on the part of the purchaser
at the time of purchase. In the present matter it is common cause that Menqa has already taken transfer of the property and intends
to further transfer it to Roux. There is no suggestion that Menqa was in bad faith or aware of any defect at the time of the sale
in execution.
[18]
As indicated above, the court a quo held that s 70 can have no application where the sale in execution was a nullity in that
it had taken place in breach of the judgment debtor’s constitutional rights. In coming to this conclusion, Zondi AJ relied
on the Cape High Court judgment in Schloss which concerned the sale of immovable property in execution of a default judgment obtained in March 2004. The sale in Schloss took place shortly before the Constitutional Court handed down its judgment in Jaftha and the property was transferred to the purchaser in execution and subsequently sold and transferred to Mr Taramathi. There the court
found that there was no judicial oversight of the issue of the warrant of execution; that the law as set out in Jaftha operated retrospectively to the inception of the Constitution; and that, accordingly, the sale in execution took place pursuant to
an invalid warrant and was also void.
[19]
As regards the question of the implications of these findings for a bona fide purchaser of property pursuant to such an invalid sale in execution, the court in Schloss emphasised that any exercise of public power has to be carried out in terms of a valid rule of law. The court approved of the finding
of McCall AJ in Joosub to the effect that, where there was no sale in execution or where the sale in execution which purported to have taken place was a
nullity, then it could not have served to pass any title to the property concerned to the purchaser or to any successor in title
into whose name the property was subsequently transferred: ‘the plaintiff [the judgment debtor], as owner of the property,
would be entitled to recover the [property] by way of a rei vindicatio.’
[20]
In Joosub the default judgment granted in the High Court and the warrant of execution purportedly issued pursuant thereto reflected different
judgment debtors and there was thus no valid judgment against the person whose properties were sold in execution (the plaintiff).
Counsel for Menqa and Roux sought to distinguish that case inter alia on the basis that, in the present matter, there was a valid judgment against Markom and that the sale in execution was therefore protected by s 70 of the Magistrates’ Courts Act
even if the warrant of execution was null and void.
[21]
I am not persuaded by counsel’s submissions in this regard. Section 66(1)(a) of the Magistrates’ Courts Act was declared to be constitutionally invalid in the Jaftha case on the ground that it unreasonably and unjustifiably limited judgment debtors’ fundamental right of access to adequate
housing entrenched in s 26(1) of the Constitution. The warrant of execution in the present case was invalid as it was issued without
the judicial oversight required by the Constitutional Court in Jaftha and the absence of this procedural safeguard imperilled Markom’s constitutional rights under s 26(1). The sale in execution
to Menqa was invalid for the same reason. I agree with the court a quo that, if one were to hold that the provisions of s 70 of the
Act rendered such a sale in execution unimpeachable, this would indeed ‘defeat the whole purpose of the Constitutional Court
ruling in the Jaftha case.’
[22]
[23]
[24]
[25]
[26]
Order
[27]
For the reasons set out above, the appeal succeeds to the following extent:
1.
The confirmation by the court below of paragraph 1.4 of the rule nisi issued on 10 February 2006 is set aside.
2.
The order made by the court below is altered to read:
‘Paragraphs 1.1, 1.2 and 1.3 of the rule nisi are confirmed. The first and second respondents are ordered to pay the applicant’s costs jointly and severally, the one paying
the other to be absolved.’
B J VAN HEERDEN
JUDGE OF APPEAL
CONCUR:
SCOTT JA
JAFTA JA
KGOMO JA
CLOETE JA
[28]
I have had the advantage of reading the judgment prepared by my colleague Van Heerden and concur in the order made. The ratio of my colleague’s judgment on the principal issue in the appeal may be summarised as follows: The warrant of execution in the
present matter is invalid for the same reason as in the Jaftha matter; the sale in execution was accordingly void; and s 70 of the Magistrates’ Courts Act 30 of 1944 (‘the Act’)
cannot be interpreted so as to negate the Jaftha decision. I agree with this conclusion. But it is in my view desirable to analyse the meaning of the section and provide a rational
basis for its interpretation.
[29]
The relevant facts and the principal issue on which the appeal turns can be briefly stated. The immovable property in question was
owned by Markom; it was occupied by him and his family as their home; it was sold to Menqa at a sale in execution pursuant to a valid
judgment granted against Markom by default in a magistrate’s court; and it was registered in the name of Menqa, who subsequently
sold it to Roux (in whose name it has not been registered). The warrant of execution was issued by the clerk of the court and therefore
without judicial supervision ? a procedure held by the Constitutional Court in Jaftha to be unconstitutional if the warrant of execution would compromise the judgment debtor’s rights to access to adequate housing
(in terms of s 26(1) of the Constitution) and would therefore need to be justified (as contemplated by s 36(1) of the Constitution).
The limited ambit of the decision in Jaftha was emphasized by this court in Standard Bank of South Africa Ltd v Saunderson. The order of the Constitutional Court requiring words to be read in to s 66(1)(a) of the Act to cure the unconstitutionality was not limited in terms of s 172(1)(d)(i) of the Constitution. The order accordingly has retrospective effect. There is reason to believe that Markom and his family’s s 26(1) rights of access to adequate housing might have been compromised: Markom said in his founding
affidavit that if he and his family were to be evicted, they would be left ‘effectively homeless’. Because the warrant of execution was issued by the clerk of the court, Markom
had no opportunity to place his personal circumstances and those of his family before a court. The consequences, for the reasons
which follow, are that the warrant was invalid and the sale, a nullity. The principal question on appeal is whether s 70 of the Act protects Menqa, in circumstances where there is no suggestion that he
acted in bad faith or had knowledge of the defect in the warrant.
[30]
I shall repeat the wording of the section for convenience:
&nb