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IN THE HIGH COURT OF SOUTH AFRICA

KWAZULU-NATAL, DURBAN

CASE NUMBER : 6348/07

In the application of:-

RUFUS JOHN First Applicant

JENNIFER EDNA JOHN Second Applicant

and

SITARA PERSAD First Respondent

RUGVEER MULKRAJ PERSAD Second Respondent

THE REGISTRAR OF DEEDS Third Respondent

IVAN JOHN MANICKUM N.O. Fourth Respondent

_____________________________________________________________________

JUDGMENT

_____________________________________________________________________

VAN ZÿL, J.:-

INTRODUCTION:

1. First and second applicants are husband and wife. On14 July 2006 and at Durban, KwaZulu-Natal, they jointly concluded an agreement with first and second respondents for the purchase of an immovable property from the latter as sellers. Since then the applicants have unsuccessfully sought to obtain registration of transfer of the property into their names.

2. Eventually and by way of application proceedings, applicants sought an order directing first and second respondents –

“… to sign all necessary documents for the transfer of the immovable property (“the property”) more fully described as Erf 1364 Reservoir Hills (Ext No. 5) Registration Division FT, Province of KwaZulu-Natal, in extent 709 square metres, held by Deed of Transfer No. T22318/1997 to be effected into the names of the Applicants;”,

and failing which, that the Sheriff be empowered to do so instead of respondents, inderdictory relief aimed at preventing first and second respondents alienating the property during the interim and a costs order against first and second respondents jointly and severally.

3. At the outset, as third respondent, was cited the Registrar of Deeds for the province of KwaZulu-Natal, in his capacity as such, but against whom no relief was claimed, save for interdicting the registration of transfer of the property to anyone other than applicants. Subsequently applicants applied for and successfully joined Ivan John Manickum N.O., in his capacity as the executor in the estate of the late Mulckraj Manoojlal Persad (estate No. 3807/98) (“the deceased”), as the fourth respondent in these proceedings.

4. First and second respondents, after some delays and false starts, finally appointed a legal representative and opposed the relief sought by applicants. Third respondent, though served with the application papers, did not otherwise participate in the proceedings and in particular, did not report as envisaged in section 97(1) of the Deeds Registries Act 47 of 1937. Fourth respondent filed an answering affidavit, but did not appear to oppose the relief sought by applicants. However, in his answering affidavit he indicated that he would not be able to comply with an order as sought by applicants. The Master reported, but otherwise abided the decision of the court.

THE FACTUAL BACKGROUND:

5. The application papers establish that first respondent and the deceased were, during the lifetime of the latter, married to each other out of community of property and that the immovable property, being the subject matter of the present litigation, was and remains registered in the name of the deceased. They had two children, namely their son the second applicant and Lovisha Persad, a daughter who tragically died on 13 August 2002.

6. The deceased died on 5 February 1998. First respondent was initially appointed as executrix in the estate of the deceased, but she was subsequently removed from this position by the Master, who thereafter appointed fourth respondent as executor by letters of executorship issued on 21 August 2001. Although he has since tendered his resignation as executor to the Master, the papers are silent upon its acceptance, so that it appears that fourth respondent remains the executor of the estate of the deceased.

7. No executor has, so it would appear, been appointed in the estate of the late Lovisha Persad. The Master’s report relevant to this estate (estate No. 11221/06 DBN) remarks on the fact that the estate had not been joined as a party in the litigation because “the deceased is entitled to a share in the property described as Erf 1364 Resevoir Hills.”. In response thereto applicants, in a supplementary answering affidavit comment as follows –

“… there is no meaningful purpose for an executor to be appointed to Lovisha’s estate as the only asset in her estate is a share of the property, which share of the property devolves as a matter of law to the first respondent. ”

8. Fourth respondent advances, as reason for tendering his resignation as executor in the estate of the deceased, the alleged lack of cooperation received from first respondent. In his answering affidavit he denies that the estate of the deceased has been would up and alleges, inter alia, that the transfer of the immovable property to the “heirs” of the deceased has not been effected. Applicants, as annexure “RJ10 to RJ14” to their founding affidavit, put up a copy of what is alleged to be an amended final liquidation and distribution account, under the hand of the fourth respondent, dated 27 June 2006 and make the allegation that “The Master of the High Court approved Manoojlal’s estate during July 2006.”. What exactly is intended to be conveyed by this allegation is unclear. But it clearly cannot mean discharge of the executor in terms of the provisions of section 56(1) of the Administration of Estates Act 66 of 1965 upon the completion, to the satisfaction of the Master, of the liquidation and distribution of a deceased estate.

9. Neither the Master, in his report, nor fourth respondent in his answering affidavit, deal with or refer to the contents of this account. It is, however, clear is that the property remains vested in the estate of the deceased. Not only does the fourth respondent expressly say so, but applicants acknowledged this by having joined fourth respondent and then seeking, as against him, an order in terms substantially similar to that originally sought against first and second applicants and as set out above, save that it is envisaged that fourth respondent would effect transfer into the names of first and second respondents only.

10. Perusal of the amended liquidation and distribution account reveals the property as the only asset, valued at R183 900-00. It reflects total liabilities, including a balance owed to Firstrand Bank Limited as bondholder, of R54 696-82 and arrives at a “Total Amount available for Distribution” of R129 203-18. No mention is made of any proposed sale of the property, so that by purporting to award cash sums to the intestate heirs the account is unrealistic. It is quite clear that the estate suffers from a cash deficiency. Whilst it postulates that the cash shortfall would be “met by the surviving spouse”, namely the first respondent in these proceedings, it fails to indicate what, in such event, would happen to the immovable property. One would have to infer, in the absence of any express indication to that effect in the account, that it is intended then to transfer the property in unspecified undivided shares into the names of the heirs. But that, in the absence of the appointment of an executor in the estate of the late Lovisha Persad, also does not appear to be without difficulty.

THE LEGAL ISSUES ARISING:

11. Applicants seek relief amounting to specific performance in terms of the agreement of purchase and sale they rely upon. First and second respondents oppose such relief and allege that the agreement had been cancelled due to applicants’ non-performance of their obligations arising there from. Applicants dispute the claim to cancellation and assert the continued existence of the agreement of sale.

12. Respondents, in the absence of provision in the sale agreement for occupational interest, even set up a claim against applicants for a “fair” rental of R57 750-00 and increasing at R3 500-00 per month. However, it has been held that a stipulation in a lease to pay a reasonable rental is not sufficient to enable the parties to establish, with the requisite degree of certainty, the ambit of their respective rights and obligations. Accordingly such a stipulation would be void for vagueness (Trook t/a Trook’s Tearoom v Shaik 1983 (3) SA 935 (N)).

13. Although not clearly expressed in first respondent’s supplementary answering affidavit, it appears that the point is taken that the agreement of sale is void, by reason of the fact that –

“… First and Second respondents clearly had no authority to conclude an agreement in respect of the sale of the property. They are merely beneficiaries upon liquidation.”

14. It is therefore convenient, before having to consider whether the agreement had been validly cancelled by reason of any one or more of the points taken by first and second respondents, at the outset to determine whether it came into existence at all. It appears that first and second respondents contend that the agreement, as a matter of law, was incompetent and accordingly that it is void ab initio and without legal effect.

15. In the event of it being held that the sale agreement is not void, then the further issue arising is the position of fourth respondent in relation thereto and whether, as a matter of law, he is bound as executor in the estate of the deceased, to recognise, observe and/or to give effect to its terms.

EVALUATION OF SUCH ISSUES:

16. The factual circumstances in which first and second respondents allege that the agreement of sale is void include that, at all material times the property was registered in the name of the deceased, whose estate was represented by fourth respondent as executor thereof. The deceased, in intestacy, has three heirs, namely first respondent, as his widow to whom he had been married out of community of property, second respondent as his son and his daughter Lovisha, who died on 13 August 2002 and well before the sale agreement was concluded. In any event, her estate is unrepresented and has not been joined as a party in these proceedings.

17. It is clear that first and second respondents, at the time of contracting with applicants, were not the registered owners of the property, nor have they since become the registered owners thereof. Indeed, it is not clear that they will ever become the registered owners of the property.

18. The amended final liquidation and distribution account forming part of the papers, as already indicated above, purports to award to them in intestacy amounts of money as their respective inheritances and does not envisage the transfer of the immovable property to them in undivided shares. This presupposes that the property will have to be sold by the executor in order to eliminate the cash deficiency in the estate. Once the estate debts are settled, the residue will accrue to the heirs, as contemplated in the distribution account. As things stand, fourth respondent is unable to implement the amended final liquidation and distribution account without liquidating the property. He is likewise unable to give effect to the terms of the rule nisi issued on 19 October 2007, the confirmation of which he ill advisedly consented to on 31 October 2007 and which, in effect, purports to disinherit Lovisha’s estate. It is noteworthy, however, that first and second respondents noted no consent in relation to the relief claimed by applicants against fourth respondent.

19. First and second respondents are only two out of three intestate heirs standing to inherit from the residue from the estate of the deceased. It will be necessary first to administer Lovisha’s estate. On the limited information relating to her emerging from the papers, it would appear that she died intestate without leaving issue, so that first respondent will probably ultimately inherit the residue of her share of the deceased’s estate. But since no executor has yet been appointed to her estate, nothing has been achieved in finalising the administration thereof.

20. For present purposes therefore, Lovisha’s estate remains a beneficiary in the estate of the deceased and was not a party to the agreement of sale, entered into with applicants by first and second respondents, in relation to the property which is an asset in the estate of the deceased.

21. The question then arises as to the legal status of the agreement of sale. In Tabha v Moodley 1957 (1) SA 659 (N) at page 662 E Selke J had occasion to remark that “… one man may validly lease, as he may sell, another's property; see Transvaal Mortgage Co. Ltd v Aaronson , 1904 T.S. 864 at p. 866, per INNES, C.J.” In approval thereof Hoexter JA, in Frye’s (Pty) Ltd v Ries 1957 (3) SA 575 (AD) at page 581 A-B, stated that “There can be no doubt that neither a sale nor a lease is void merely because the seller or lessor is not the owner of the property sold or leased.”. It follows that first and second respondents could, as a matter of law, enter into a binding agreement with applicants for the sale of the property to them. Such agreement is therefore not void ab initio, as contended by Mr Motala, who appeared for the first and second respondents.

THE NATURE OF THE RELIEF SOUGHT BY APPLICANTS:

22. But first and second applicants are not seeking a declaratory order as to the validity of the agreement of sale, but an order for specific performance in terms thereof. That requires of first and second respondents to transfer to applicants an immovable property which they do not own. Our law has now given recognition to the abstract theory of ownership. In Legator McKenna Inc v Shea (143/2008) [2008] ZASCA 144 (27 November 2008),at page 12 in paragraph 22, Harms ADP remarked as follows –

“In accordance with the abstract theory the requirements for the passing of ownership are twofold, namely delivery – which in the case of immovable property, is effected by registration of transfer in the Deeds Office – coupled with a so-called real agreement or 'saaklike ooreenkoms'.”

23. The applicants’ difficulties in the present matter are twofold. In the first instance they relate to the first and second respondents’ inability to deliver the property to them. That is, to effect registration of transfer thereof in the office of the third respondent, namely the Registrar of Deeds. Secondly they relate to the lack of a “real agreement” with and enforceable against the legal owner of the property, namely the fourth respondent, as representative of the estate of the deceased, who remains the registered owner thereof.

24. Fourth Respondent was not party to the agreement of sale of the property, as concluded between applicants and first and second respondents. In fact, the first he heard of this sale was when the application papers and the rule nisi issued on 19 October 2007 were served upon him on that day. He is under no contractual duty to deliver the property to applicants. His duty is to liquidate and distribute the estate of the deceased. The only time he would conceivably become liable to deliver the property to applicants, would be if he, duly authorised thereto, were to conclude and agreement of sale thereof with applicants, in the course of liquidating the estate of the deceased.

25. Where a defendant is able to perform his or her obligations in terms of a valid and enforceable contract, such defendant cannot as of right resist a claim for specific performance by tendering to pay damages in lieu thereof (Thompson v Van der Vyver 1954 (2) SA 192 (C), Hall J at page 194 G). The grant or refusal of an order for specific performance is, however, entirely a matter of the discretion of the court in which the claim is made. It has been held that, apart from the rule that such discretion is to be exercised judicially upon due consideration of all the relevant facts, no rules should be prescribed to regulate such a discretion. The reason is that such rules would inevitably curtail the court's discretion and would tend to negate or erode an applicant's right to select his or her remedy (Benson v SA Mutual Life Assurance Society 1986 (1) SA 776 (AD)).

26. Considerations relevant to a claim for specific performance would also include whether any such order is likely to be effective, or could be implemented. Where the probabilities indicate that the order is unlikely to be effective, for whatever reason, that in my view would militate against the granting of such an order in the first instance.

27. In the present matter it is not legally possible for the first and second respondents to deliver the property to applicants. Any order directing them to do so is likely to ineffective. This is so because the property itself is not due to devolve upon first and second respondents as part of the ordinary liquidation and distribution of the estate of the deceased. Even if one were to exclude from consideration that Lovisha's estate is also an heir in the estate of the deceased, then on the evidence before the court first and second respondents do not have the financial resources to arrange with the fourth respondent to make up the cash shortfall in order to take transfer of the property, as opposed to receiving the residue of the estate, as their inheritances.

28. Applicants' further difficulty is also that they have no "real agreement or 'saaklike ooreenkoms'." (within the meaning of the Legator McKenna case above) with fourth respondent as representative of the estate of the deceased, which is the registered owner of the immovable property concerned. There is accordingly no basis in law upon which they can compel the estate of the deceased to transfer the property to them, merely by virtue of their agreement with first and second respondents.

29. Mr Ramdhani, who appeared for the applicants, relied upon Milne, NO v Singh, NO and Others 1960 (3) SA 441 (N) for the proposition that the property could lawfully be transferred on the strength of agreement reached with first respondent in her capacity as the spouse or widow of the deceased. But in my view the submission is without merit because in that matter the argument related to the setting aside of a completed transfer, as opposed to ordering a transfer to take place. At page 452 B- E, Caney J remarked, as follows -

"I come to the conclusion that sec. 57 does not prohibit or render illegal, invalid or void, or indeed voidable, a transfer actually passed contrary to its terms. A surviving spouse, as such, had no authority at common law to transfer property, in the opinion I have expressed, but a bona fide purchaser was protected. The section, although expressed in language making it not lawful to do so save with a certificate from the Master, had the effect of declaring, by negative language, the condition under which a surviving spouse is authorised to transfer property. A consequence of its breach is the liability imposed by sec. 28, and perhaps sec. 29. Consequently what was completely unauthorised and unlawful (but not always ineffective) is now conditionally authorised. If a bona fide purchaser was protected before, I see no reason why he should not be now. As against the transferee the common law situation is unchanged, and so, if he has received transfer bona fide, the transfer cannot be impugned."

30. The matter now under consideration is entirely distinguishable from that in Milne, NO v Singh, NO and Others (supra) because what is sought here is an order compelling transfer of estate property by two (out of three) heirs, who are neither the registered nor beneficial owners of such property, but who contracted its sale without the requisite authority. In the process it is sought to bind also the executor in the estate of the deceased to do what is inconsistent with the liquidation and distribution account, namely to transfer the immovable property to those two heirs only, and without taking cognizance of the additional impediment of the considerable cash shortfall in the estate which would logically prevent transfer of the property itself, as opposed to an award of a share in the residue of the estate, after liquidation of the property and payment of the debts creating the cash shortfall.

31. In all the circumstances of the matter, I am of the view that an order for specific performance in the present matter would be inappropriate, unworkable and likely to be ineffective. In the exercise of the court's discretion I have come to the conclusion that such an order should not be granted. That does not mean that applicants are necessarily without a remedy, but merely that in pursuing a claim for specific performance they were misguided. As indicated above, the agreement of sale is not void ab initio, as contended by Mr Motala, who appeared for the first and second respondents. Conceivably applicants might be able to claim damages, consequent upon breach of contract by first and second respondents. But that is another matter entirely and not one to be decided upon the present papers before me.

COSTS:

32. Usually, if after opposition a rule nisi is to be discharged, costs would follow the result and the unsuccessful applicant would have to bear the costs of the successful respondent. In the present matter, although the result of this judgment has the effect of favouring first and second respondents, their conduct in contracting with applicants in the manner and upon the terms in which they did, as well as their subsequent conduct, including their conduct in the course of the present application, is open to criticism. As a mark of my displeasure at the conduct of first and second respondents and in the exercise of my discretion I consider that an appropriate costs order in all the circumstances of the matter would be to make no order as to the costs of first and second respondents.

33. The position with regard to fourth respondent is, however, on a different footing. Applicants, on 19 October 2007 sought and obtained, upon grounds which do not clearly appear from the application papers before me, an order joining fourth respondent in his capacity as executor in the estate of the deceased and in order to seek relief against him to which, for the reasons already dealt with above, applicants were in law were not entitled. In my view applicants must bear the costs of fourth respondent.

34. In the result the rule nisi of 24 July 2007 cannot be confirmed and it is hereby discharged. There will be no order as to the legal costs incurred by first and second respondents, but applicants are ordered to pay the legal costs incurred by fourth respondent, both in regard to his joinder, as well in the course of in these proceedings.

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JUDGMENT RESERVED: 27 November 2007

JUDGMENT HANDED DOWN: 6 May 2009

Counsel:

For Applicants: Adv D. Ramdhani, instructed by Ajit Sevraj & Associates, Durban.

For First and Second Respondents: Mr Attorney F. M. Motala of

Enver Motala & Company, Durban.

For Third and Fourth Respondents: No appearance.

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