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IN THE HIGH COURT OF CAPE TOWN

(CAPE OF GOOD HOPE PROVINCIAL DIVISION)

CASE NO: 9473/2003

In the matter between:

IVORAL PROPERTIES (PTY) LIMITED Plaintiff/Applicant

and

SHERIFF OF CAPE TOWN 1^st Defendant/Respondent

NEDBANK LIMITED 2^nd Defendant/Respondent

ERF 330 CLIFTON (PTY) LIMITED 3^rd Defendant/Respondent

JOHANNA STEENHUIZEN 4^th Defendant/Respondent

REGISTRAR OF DEED, CAPE TOWN 5^th Defendant/Respondent

and

NEDBANK LIMITED First Third Party

HARRISON ATTORNEYS 2^nd Third Party Sixth Respondent

THE RICHARD AND PETRONELLA

SHUTTLEWORTH TRUST 7^th Respondent

­­­­­­­­­­­­­­­­­­­­­

JUDGMENT: 6 APRIL 2005

VAN REENEN, J:

1] The applicant, a company with a share capital and having its registered offices at 735 Fhrensch Street, Moreleta Park, Pretoria, Gauteng was the registered owner of Erf 330, Clifton, Cape Town (Erf 330) until 28 June 2002, when it was transferred into the name of Erf 330 Clifton (Pty) Ltd (third respondent).

2] The applicant as security for an indebtedness in an amount of R4 250 000 to Syfrets Bank Limited, on 26 May 1998, procured the registration of a first covering mortgage bond No 3157398 over Erf 330 (the mortgage bond).

3] Nedcor Investment Bank Ltd look over the rights and obligations of Syfrets Bank Limited. Nedbank Limited in turn took over the rights and obligations of Nedcor Investing Bank Limited. As the applicant defaulted with its obligations under the mortgage bond Nedcor Investment Bank Limited on 14 August 2000 obtained summary judgment in the Transvaal Provincial Division of the High Court of South Africa against the applicant and Rachel Cornelia Retief (who in that matter was cited as the second defendant) jointly and severally for –

1. the payment of an amount of R4 440 645,12;

2. interest thereon at 16,17 % per annum from 1 May 2000 to date of payment, calculated daily and compounded monthly in arrear; and

3. costs of suit on a scale as between attorney and client.

4] The court, in addition, declared Erf 330 “specially executable” and postponed the application for summary judgment against the second defendant sine die.

5] The Sheriff of Cape Town (the first respondent), pursuant to a writ of execution issued by the Registrar of the Transvaal Provincial Division of the High Court of South Africa on 21 September 2000, duly attached Erf 330 and on 16 November 2000, sold it in execution by means of a public auction for an amount of R5 500 000 to Mr Petrus Johannes Geldenhuys (Geldenhuys) who was acting in terms of a written power of attorney granted to him by Johanna Steenhuizen (the fourth respondent) in her capacity as the agent of a company to be incorporated. However, when he signed the Conditions of Sale did so “… in my capacity as representative of Johanna Steenhuizen”.

6] The deposit provided for in the Conditions of Sale was duly paid and a bank guarantee for the payment of the balance of the purchase price against transfer of the property into the name of the fourth respondent “as Trustee for a Company to be formed and registered” was provided. An incomprehensibly obtuse dispute developed about the name of the entity into whose name Erf 330 had to be transferred in terms of the Conditions of Sale, as read with the written power of attorney. The fourth respondent’s attorneys saw fit to construe the first respondent’s initial justified refusal to rectify the conditions of sale because he was functus officio, as an act of repudiation; purported to accept it; and resiled from the Conditions of Sale. The first respondent, in turn, disavowed having repudiated his obligations under the Conditions of Sale and on 31 March 2001, brought an application in this court under case number 1559/2001 in which he claimed the following relief against the fourth respondent: -

“1. Directing the Respondent to form and register the company and nominate the company which is the purchaser of certain immovable property situate at erf 330 Clifton purchased at the sale in execution held on 16 November 2000, within a period of fourteen days of date of this order.

2. ALTERNATIVELY,

   1. Declaring that the Respondent is the purchaser of the property erf 330 Clifton pursuant to the sale in execution held on 16 November 2000

   2. directing the Respondent to furnish an acceptable guarantee to the Sheriff within twenty eight days of date of this order guaranteeing the balance of the purchase price as against transfer into her name on terms and conditions acceptable to the Applicant

   3. directing the Respondent to pay the Applicant the sum of R5,5 million against transfer of the said erf into her name.

   4. Directing the Respondent to pay all such costs consequent upon the transfer namely the sum of R455 771,30 within fourteen days of date of this order.

2. Further and/or alternative relief.

2. Costs of suit on the scale as between Attorney and own client.”

7] What is notable is that paragraph 26 of the first respondent’s founding affidavit contained a tender in the following terms: -

“In the premises I tender transfer to the company to be nominated by the Respondent and registered by the Respondent within fourteen days of date of any order the above Honourable Court may make failing which I tender transfer to the Respondent personally as against payment of the balance of the purchase price, subject to the Respondent securing the purchase price within a period of twenty eight days by way of guarantee acceptable to me and providing for payment to me as against transfer to the Respondent personally.”

8] The fourth respondent not only opposed the relief claimed by the first respondent but instituted a counter-application in which it, inter alia, sought the repayment of the deposit together with interest thereon at 15,5 % from 16 November 2000 to the date of payment, as well as the return to it of the bank guarantee of Standard Bank, dated 13 December 2000, for the payment of the balance of the purchase price against the registration of transfer of Erf 330. The first respondent in response filed a replying affidavit.

9] The application was enrolled for hearing on 7 November 2001 before Oosthuizen, AJ who granted an order in terms of an agreement of settlement (the settlement agreement) in the following terms: -

“1. The sale contract is rectified to reflect the purchaser as Johanna Steenhuizen acting in her capacity as a trustee for a company or close corporation to be registered.

2. The purchaser shall register and nominate the company or close corporation on or before 30 November 2001.

3. In the event that the purchaser does not register and nominate the company or close corporation by 30 November 2001 then she shall personally be the purchaser.

4. The purchaser hereby confirms and ratifies the actions of her agent insofar as they are in accordance with the aforegoing.

5. The purchaser is to pay the purchase price in full together with interest thereon at the Nedbank-prime lending rate from time to time (as per annexure “A”) hereto to Nedcor Investment Bank Limited on or before 30 November 2001.

6. The Respondent is to pay the Applicant’s taxed or agreed costs of this application on the party and party scale.

7. The purchaser shall provide a guarantee from a financial institution acceptable to Nedcor Investment Bank Limited for payment of the amount referred to in paragraph 5 by no later than 17h00 on Monday 12 November 2001. In the event that the purchaser shall pay all the amounts referred to in paragraph 5 supra then the guarantee shall forthwith become void and unenforceable. Nedcor Investment Bank shall forthwith after such payment and on demand by the purchaser hand over the original guarantee.

8. The sheriff is ordered to forthwith pay the deposit which he has received, together with such interest as may have accrued thereon, to Nedcor Investment Bank.

9. The aforesaid payment will be taken into account in calculating the interest to be paid on the full purchase price.

10. This agreement shall be made an order of the above Honourable Court.”

10] The settlement agreement was signed on behalf of the first respondent by Mr G C Harrison (Harrison) of the firm of attorneys known as Harrisons and by the fourth respondent in person. Harrisons were the attorneys that represented the second respondent, but seemingly oblivious of any possibility of a conflict of interests, represented the first respondent in the application. The first respondent’s statement that he had not been advised that the matter had been set down for hearing on 7 November 2001, and that the terms of the settlement were neither discussed with nor subsequently conveyed to him were not placed in issue.

11] The settlement agreement, in addition to the rectification of the Conditions of Sale by reflecting the purchaser as Johanna Steenhuizen acting in her capacity as a trustee for a company or close corporation to be registered, amended the Conditions of Sale in that –

11.1 It provided for the payment of a full purchase price together with interest thereon at the Nedbank Prime Lending rate ie a sliding scale between 14,5 % and 13 % per annum to Nedcor Investment Bank Limited by 30 November 2001, after the providing of an acceptable guarantee by 12 November 2001, instead of the balance of the purchase price together with interest at the rate of 16,17 % per annum directly to the first respondent, pursuant to a suitable guarantee issued within 14 days of the date of sale.

2. It also provided for the immediate payment by the first respondent of the deposit paid by the purchaser, together with such interest as had accrued thereon, to Nedcor Investment Bank Limited.

12] The provisions of the Conditions of Sale as modified by the settlement agreement / court order were given effect to and Erf 330 was transferred into the third respondent’s name on 28 June 2002.

13] The second respondent only on 14 August 2000, applied the proceeds of the sale in execution to the judgment debt that it had obtained against the applicant. The second respondent on 12 July 2002, paid an amount of R197 450,25 to the applicant. The applicant, despite disputing the correctness of the second respondent’s calculations, accepted payment of the afore-mentioned amount; contended that a higher amount was due to it; and on 5 November 2002 launched an application in the Transvaal Provincial Division of the High Court of South Africa against the second respondent for the payment of an amount of R822 258 together with interest thereon and costs.

14] The second respondent served and filed an answering affidavit on 5 December 2002 and simultaneously launched a counter-application against the applicant for the payment of an amount of R369 326,89 alternatively R164 751,96. As the applicant failed to file a replying affidavit in the application instituted by it and also answering affidavits in the counter-application, second respondent caused the matter to be enrolled for hearing during the week of 8 April 2003. The applicant on 8 April 2003 served a notice in terms whereof it withdrew its application so that only second respondent’s counter-application remained. The applicant, in the interim, caused the first respondent to prepare a plan of distribution, dated 14 March 2003, in accordance with the provisions of the rules of court and on 6 May 2003 filed an opposing affidavit in which it, relying on the plan of distribution; endeavoured to show that - contrary to the second respondent’s allegations - the second respondent owed it money. The second respondent delivered and filed its replying affidavit on 4 July 2003.

15] The second respondent objected to the plan of distribution prepared by the first respondent and Fourie AJ set it aside on 10 November 2003, after a hearing. Second Respondent then caused the counter-application to be enrolled for hearing and Daniels J, after an opposed hearing, granted judgment in its favour in an amount of R197 460,26 together with interest thereon at 15,5 % per annum from 12 July 2002 to date of payment and costs on 16 September 2004, and on 1 November 2004, dismissed the applicant’s application for leave to appeal with costs. The second respondent caused a writ of execution to be issued, and having obtained a nulla bona return, on 6 December 2004, launched an application for the winding-up of the applicant in the Transvaal Provincial Division of the High Court of South Africa.

16] The applicant on 14 December 2004, gave notice of its intention to oppose the winding-up application, and on 5 January 2005, requested an extension of two weeks of the time-limit for the filing of answering affidavits. Second respondent’s attorneys on 7 January 2005, advised the applicant’s attorneys that the answering affidavit had to be filed within the stipulated dies. The applicant’s attorneys on 6 January 2005 advised the second respondent’s attorneys that a petition for leave to appeal would be filed during “early next week”. When that did not materialise the second respondent’s attorney on 26 January 2005, advised the applicant’s attorneys that seeing that there was no appeal pending, the winding-up application would be set down for hearing. The applicants’ attorneys on the same date caused a petition for leave to appeal to the Supreme Court of Appeal to be served. As the petition was more than two months late, it embodied an application condoning the late filing thereof. It is to be noted that the founding affidavit therein was attested to as early as 9 January 2005. Accordingly the inference that the threatened winding-up application was the real catalyst for the petition for leave to appeal appears to be inescapable.

17] On the date on which Fourie AJ set aside the first respondent’s plan of distribution, namely 10 November 2003, the applicant instituted an action in this court under Case No 9473/2003 against first-, second-, third- and fourth respondents as well as against the Registrar of Deeds, Cape Town (the fifth respondent).

18] The first respondent on 23 March 2004, delivered and filed a plea to the applicant’s particulars of claim.

19] The first respondent on 19 March 2004, delivered and on 1 April 2004, filed a notice in terms whereof it joined the second respondent and Harrison’s Attorneys as first- and second third parties respectively and sought an order that –

1. the first, alternatively the second third party, be ordered to pay to the first respondent –

1. such amounts as this court might hold the first respondent to be liable to pay to the applicant, including the reimbursement of any order for costs granted in the applicant’s favour;

2. the full costs charged by the first respondent’s legal representatives in defending the first respondent in respect of the applicant’s claims calculated on a scale as between attorney and client; and

3. jointly and severally, the first respondent’s costs in respect of the third party proceedings.

20] The third and fourth respondents on 24 to 26 March 2004 delivered, and on 26 March 2004, filed a notice in terms whereof they joined the second respondent as a third party and sought the following orders in favour of the third respondent, alternatively the fourth respondent:

20.1 An order that second respondent pay to the third respondent any amount that it may be ordered to pay to the applicant alternatively, the first respondent;

20.2 Alternatively, an order declaring that the second respondent was obliged, after receipt of the amounts of R550 000 on or about 5 November 2001, and R51 440,81 on or about 26 November 2001, to have credited such amounts against the judgment debt it had obtained against the applicant;

3. An order that the second respondent pay an amount of R605 472,42 alternatively, such amount as may be determined by this court, to the third respondent alternatively, the third and fourth respondent’s; and

3. An order that second respondent pay the third- and fourth respondents’ costs, including the costs of Senior Counsel and the costs the third party proceedings.

21] The second respondent on 28 May 2004, delivered and filed a plea to the first respondent’s statement of claim and delivered and filed a counter-claim against the first respondent in which it claimed the following relief:

“1. Directing the first defendant [First Respondent] to file a plan of distribution as is required in terms of Rule 46(14)(b) of the Uniform Rules of Court in respect of the sale in execution conducted and held by him on 16 November 2000 in respect of the immovable property known and described as Erf 330, Clifton, Cape Town.

2. Alternative relief.

2. Directing the first defendant [First Respondent] to pay the costs of the counterclaim.”

The first respondent has not, as yet, delivered and filed a plea to the counterclaim. Harrisons Attorneys, on 17 August 2004 delivered, and on 18 August 2004 filed, a plea to the first respondent’s statement of claim in the third party proceedings.

22] The second respondent on 28 May 2004 delivered and filed a plea to the third- and fourth respondents’ statement of claim in the third party proceedings.

23] The third- and fourth respondents on 11 March 2004, delivered and filed a plea to the applicant’s particulars of claim in the action referred to in paragraph 17 above and the first respondent on 23 March 2004, delivered and filed a plea to the applicant’s particulars of claim in the said action. The second respondent on 26 March 2004, delivered and filed a notice to the effect that the main claim in the applicant’s particulars of claim in the said action was, for the reasons enumerated therein, vague and embarrassing; failed to disclose a cause of action; and afforded the applicant an opportunity of removing the complaint, failing which a notice of exception would be delivered and filed.

24] The applicant on 15 April 2004 delivered and filed a notice of an intention to amend its particulars of claim in the said action. As the proposed amendments did not adequately address the second respondent’s cause of complaint it, on 28 May 2004, delivered and filed an exception on the basis that the applicant’s first and main causes of action did not disclose a cause of action, alternatively, was vague and embarrassing. The exception has not been adjudicated as yet.

25] The applicant, pursuant to a notice of intention to amend its particulars of claim, which was delivered and filed on 15 April 2004, amended its particulars of claim in the action on 18 August 2004, so as to claim the following relief under the following headings: -

1. Main Relief:

   1. An order declaring the execution order obtained under case number 13092/2000 void;

   2. That an order be made declaring the execution sale held pursuant to the execution order obtained under case number 13092/2000 void;

   3. That an order be made declaring that the agreement concluded in the name of the first respondent with fourth respondent, annexure “B” to the Particulars of Claim, was concluded unlawfully, is void and accordingly unenforceable and of no force and effect;

   4. An order declaring as void the order made by this court on 15 November 2001 under case number 1551/2001;

   5. Alternatively to 25.1.4 above, that an order be made setting aside the order made in case number 1551/2001;

   6. That the transfer of Erf 330 into the name of the third respondent be declared void;

   7. Alternatively to 25.1.5 above, that the transfer of Erf 330 into the name of the third respondent be set aside;

   8. That the fifth respondent be ordered to set aside the transfer of Erf 330 into the name of the third respondent;

   9. An order directing the third respondent to sign such documents as may be required to give effect to 25.1.8 above, and that should the third respondent fail to sign such documents within 10 days of having been requested to do so, the Sheriff of Cape Town be directed and authorised to sign such documents;

   10. That first respondent alternatively, second respondent, be ordered to repay all monies paid by third respondent, alternatively, fourth respondent, as part of the purchase price to third respondent alternatively, fourth respondent;

   11. That third respondent, against the payment of all fees and monies payable by any party signified by this court, transfer Erf 330 into the name of the applicant;

   12. An order that against the transfer of Erf 330 into the name of the applicant, mortgage bond 31573/98 in favour of the first respondent shall revive and be registered against the said erf;

   13. That the judgment obtained by the second respondent against the applicant on 14 August 2000 under case number 13092/2000 in the Transvaal Provincial Division of the High Court of South Africa, shall revive but with exclusion of the order declaring Erf 330 specially executable;

   14. That first respondent jointly and/or severally with third respondent, alternatively, the fourth respondent, be ordered to pay an amount of R2 730 972 to the applicant, it being a reasonable and fair rental in respect of Erf 330, plus rent of R76 000 per month from 1 November 2003 to the date on which the applicant regains possession thereof;

   15. Interest on the aforementioned amount, a tempore morae, at a rate of 15,5 % per annum to date of payment;

   16. That such respondent and/or respondents as oppose the granting of the relief claimed under this heading, be ordered to pay the costs jointly and severally, the one paying the other to be absolved.

2. Alternative relief as against the first respondent only:

   1. Payment of an amount of R1 231 820,24 plus interest;

   2. on the aforementioned amount, a tempore morae, at a rate of 15,5 % per annum as follows –

i) on an amount of R1 429 280,50 from 29 June 2002 to 12 July 2002; and

ii) on an amount of R1 231 820,24 from 13 July 2002 to date of payment.

3. Costs of suit against only the first respondent and any other respondents that may oppose the relief claimed under this heading.

26] Harrisons Attorneys, on 17 and 18 August 2004 delivered, and on 18 August 2004 filed, a notice of exception against the applicant’s amended particulars of claim on the grounds that it lacks averments sufficient to sustain the relief claimed. Thát exception has not been heard as yet.

27] Rachel Cornelia Retief, the sole shareholder in and director of the applicant, deposed to the applicant’s founding affidavit in the application and stated that the applicant at the beginning of 2005 appointed Senior Counsel and that he / she is preparing a further amendment of the applicant’s Particulars of Claim in order to formulate its cause of action more fully and also to address the objections that have been raised by the second respondent.

28] I have set out the different procedural diversions between the different parties to the action in such detail merely to make the point that, although the action was instituted as long ago as 12 November 2003, its prosecution has been characterised by an attitude of dilatoriness that is not easy to reconcile with a serious desire on the part of the applicant to pursue it to its final conclusion. The pleadings are nowhere near to being closed and it is unlikely that, in the normal course, a trial date will be procured much earlier than by the end of 2006.

29] In the meantime the third respondent, on 6 December 2004, entered into a written agreement of sale with the Richard and Petronella Shuttleworth Trust (the seventh respondent) in terms whereof the former sold Erf 330 to the latter for an amount of R22.8 million. As clause 10 of the agreement of sale provides that the property had to be transferred into the seventh respondent’s name as soon as possible after the signing thereof, but in any event by not later than 28 February 2005, the applicant on 15 February 2005 under case number 9473/2003, launched an application in this court in which it on an urgent basis claimed relief in the following terms against first- to seventh respondents:

“2. Dat, hangende die finale beregting van die aksie reeds ingestel deur die applikant in hierdie agbare Ho fonder saaknommer 9473/2003, die derde respondent verbied word om die onroerende eiendom bekend as Erf 330, Clifton, Kaapstad oor te dra aan die sewende respondent of enige ander persoon.

3. Dat die koste van hierdie aansoek koste sal wees in die hoofaksie ingestel onder saaknommer 9473/2003, behalwe in geval van opponering van hierdie aansoek deur enige een van die respondente, in welke geval daardie respondent gelas word om die koste van hierdie aansoek te betaal.

2. Alternatiewe regshulp.”

30] Of the respondent’s only the second, third and fourth respondent’s actively opposed the relief sought by the applicant. They filed voluminous answering affidavits to which the applicant in turn has filed replying affidavits.

31] When the matter served before me as the duty judge in the fast lane on 22 February 2005, the second respondent brought an application for security for costs. The application was opposed by the applicant. I granted an order in the following terms after I had heard full argument from counsel who represented the parties in that application:

“1. Dat Applikant sekuriteit aan die 2de Respondent verskaf in ‘n bedrag en vorm soos deur die Griffier bepaal te word of sodanige bedrag en vorm soos deur die Applikant en 2de Respondent ooreengekom word.

2. Dat die aansoek onder saaknommer 9473/03 opgeskort word totdat sodanige sekuriteit betaal is.

3. Dat Applikant die koste van die aansoek om sekuriteit betaal.”

I was advised by counsel that the applicant had earlier provided security in an agreed amount of R40 000 to the third and fourth respondents.

32] The earliest juncture at which the registrar could determine the quantum and nature of the security that the second respondent had to provide was on 28 February 2005 at 08h30.

33] Third and fourth respondents’ attorneys on 23 February 2003 insisted that the fifth respondent should transfer Erf 330 into the seventh respondent’s name by 24 February 2005. As the fifth respondent - in my view correctly - adopted the stance that he would be obliged to adhere to the request, unless precluded from doing so by an order of a court, the applicant on 24 February 2005, on the basis of extreme urgency, obtained an interim order in the following terms from Thring J in chambers.

“1. The 5^th Respondent is ordered not to pass transfer of the immovable property described as Erf 330 Clifton, in the City of Cape Town until the 28^th February 2005 unless otherwise ordered by this court.

2. No order is made at this stage as regards costs.”

34] The third and fourth respondents in turn launched an counter-application for an order compelling the fifth respondent to register ownership of Erf 330 into the seventh respondent’s name by 28 February 2005.

35] Both applications were argued before me on 25 February 2005 at 15h00, after counsel had hastened to Cape Town. Advocate Pincus SC, who appeared for the applicant with Me Retief, advised the court that such security as his client was obliged to provide would be furnished by 2 March 2005. As the seventh respondent had to give the third respondent 14 days’ notice before it could cancel the agreement of sale, the matter was postponed to 3 March 2005, with a view to postponing the hearing of the application to a suitable date during the period 7 – 10 March 2005. Pending the hearing of the application, the fifth respondent was interdicted from transferring Erf 330 to the seventh respondent or any other person until such time that he is advised that it has been set aside. The costs of the application and counter-application were ordered to stand over for later determination.

36] I on 3 March 2005, by agreement between the parties, postponed the application to be heard on 10 March 2005 and ordered the applicant to provide the security determined by the registrar by 14h00 on 4 March 2005, and also provided for ancillary matters. As the security was provided in terms of the draft order, application 9473/2003 itself was argued by counsel on 10 March 2005. On that date the applicant was again represented by Mr Pincus SC assisted by Me Retief, the first respondent by Mr Sievers, the second respondent by Mr Robinson SC assisted by Mr Steenkamp, and third and fourth respondents by Mr Pretorius SC.

37] Despite the fact that it appeared to be interim in form, counsel for the respective parties debated the question whether the relief sought by the applicant was final in effect. The arguments presented were not sufficiently profound to enable me to resolve that issue one way or the other but I shall assume in the applicant’s favour that the relief sought is of an interim nature, subject to the caveat however, that the decision of issues of law cannot be deferred (See: Fourie v Olivier 1971(3) SA 274 (T) at 285 F – H; Tony Rahme Marketing Agencies v Greater Johannesburg Transitional Metropolitan Council 1997(4) SA 213 (W) at 215 J – 216 D; Ward v Cape Peninsula Ice Skating Club 1998(2) SA 487 (C) at 498 F – G). I shall accordingly determine whether the applicant has made out a case for the relief sought on the basis of the well-known criteria for the granting of a temporary interdict (See: Lawsa Volume 11 (1^st Reissue), paragraph 316).

38] Mr Pincus based the existence of a clear and prima facie right, although open to some doubt, to successfully vindicate Erf 330 on the following grounds: -

38.1 that because the Transvaal Provincial Division of the High Courth of South Africa did not have jurisdiction to declare immovable property situate within the area of jurisdiction of this court executable, the attachment of Erf 330 was invalid and rendered the sale in execution thereof a nullity;

38.2 that because of “the peculiar wording” of the written power of attorney the respondent granted to Geldenhuys and her stated intention not to be personally liable under the Conditions of Sale, the sale in execution itself was invalid as there was no purchaser “arising from the sale in execution”;

38.3 that as it is not possible to rectify an agreement that is invalid or void or contrary to the common intention of the parties thereto, the purported rectification of the Conditions of Sale by means of the settlement agreement, was invalid; and

38.4 that the settlement agreement did not bring about a rectification of the Conditions of Sale but constituted a new agreement alternatively, a variation agreement that was invalid because first, the attorney who signed it on behalf of the first respondent was not authorised by him in writing, second, the first respondent lacked the necessary power or authority; and thirdly, the first respondent never consented to the conclusion thereof.

39] The Republic of South Africa has a unitary legal and judicial system that recognises the exclusive jurisdiction of the different provincial and local divisions of the High Court within clearly delineated territories that are prescribed in the Surpreme Court Act, No 59 of 1959 (the Supreme Court Act). The Uniform Rules of Court, first promulgated on 12 January 1965 and thereafter amended from time to time, apply throughout the Republic of South Africa and prescribe the procedure to be followed in civil matters by all High Courts, more in particular the procedures applicable to the attachment of and sale in execution of movables and immovables (Rules 45 and 46).

40] The entitlement of a litigant to enforce a judgment or order granted in his or her favour by a court of law is an incident of the judicial process, access to which is guaranteed by section 34 of the Constitution, Act 108 of 1996 (See: Chief Lesapo v North West Agricultural Bank and Another 2000(1) SA 409 (CC) at paragraph 13). The duty placed on the registrars of the different Provincial and Local Divisions of the High Court by Uniform Rule 45(1) to issue a writ of execution at the request of any party in whose favour a judgment or order has been pronounced by that particular court, is clearly in discharge of the state’s obligations to assist its subjects in enforcing their rights, including civil claims against judgment debtors (See: De Lange v Smuts NO and Others 1998(3) SA 785 (CC) paragraph 31).

41] The proviso to Uniform Rule 45(1), to the effect that a writ of execution against immovable property may not be issued except where immovable property has been specially declared executable by the court or the registrar in terms of Rule 31(5), or a return of service in an execution against movables has been obtained from which it appears that the judgment debtor is not possessed of sufficient movables to satisfy it, accords with the common law which required execution of a claim sounding in money to be levied against movables first (Cf: Jaftha v Schoeman and Others; Van Rooyen v Stoltz and Others 2003(2) BCLR 1149 (C) at 1160 I). It is a long-standing practice of courts in this country to declare immovable property hypothecated as security for an indebtedness executable, in which event the judgment creditor may proceed to satisfy the judgment debt out of the proceeds of the sale in execution of the property which had been hypothecated for that purpose (See: Colonial Mutual Life Assurance Society Ltd v Tilsim Investments (Pty) Ltd 1952(4) SA 132 (C) at 135 C; Ledlie v Erf 2235 Somerset West (Pty) Ltd 1992(4) SA 600 (C) at 601 F – G).

42] It is not in issue that the Transvaal Provincial Division of the High Court of South Africa properly exercised its jurisdiction in having granted judgment against the applicant in an amount of R4 440 645,12, interest thereon and costs under case number 13092/2000 on 14 August 2000. What is in issue is whether that court was competent to have granted an order declaring Erf 330 - which it is common cause is situated within this court’s area of jurisdiction - specially executable. That court’s lack of competence was attributed to its having entailed the exercise of jurisdiction over immovable property situated outside its jurisdictional territory and not in the context that if constituted relief not encompassed in summary judgment proceedings in terms of Uniform Rule 32(1), which in any event, in my view would have been devoid of merit (See: Nedperm Bank Ltd v Verbi Projects CC 1993(3) 214 (W); First National Bank of SA Ltd v Ngcobo 1993(3) SA 490 (D); sed contra: Allied Building Society v Malic Construction and Development Co CC 1991(4) SA 432 (T) - categorised as “clearly incorrect” by LTC Harms: Civil Practice in the Supreme Court, at K8, (footnote 1) and as “questionable” in 1991 Annual Survey of South African Law, at 516).

43] As regards the question whether a court can declare an immovable property situate outside its territorial jurisdiction, but inside the Republic of South Africa, executable the views of our courts have been divided. The majority have held that it is competent to make such an order (See: African Farms Ltd v Goller 1908 TH 96; Michaelis v Uys (1924) 3 PH F10 (O); Meugens v Tayside Township & Development Co Ltd 1932 WLD 24; Shandos v Botes 1933 WLD 36; Smyth v Holmes 1937 EDL 110; Colonial Mutual Life Assurance Society Ltd v Tilsim Investments (Pty) Ltd 1952 (4) SA 134 (C)) and the minority have held that it is not competent to do so (See: Steyn v Byl 1918 CPD 407; Ex Parte Hill 1924 OPD 116; Herold, Gie & Bloch 1935 CPD 320; Weinbren’s Trust & others v Holmes & another 1960(3) SA 461 (D)).

43] Also the writers of text-books are divided. David Pistorius: Pollak on Jurisdiction (2^nd Ed) at 97, CF Forsyth: Private International Law (4^th Ed) at 223; and HJ Erasmus: Superior Court Practice, A1 – 28, espouse the view that a court cannot declare immovable property situate outside its area of jurisdiction executable. The authors of The Civil Practice of the Supreme Court of South Africa (4^th Ed – edited by Mervyn Dendy) at 72) hold the opposite view.

44] It is not easy to extract any general principles from the decided cases in which it has been held that courts lack the power to declare immovable property situated outside their areas of jurisdiction executable. In Herold Gie and Gie v Block (supra) and Ex Parte Hill (supra) the respective courts merely formulated appropriate orders. In Steyn v Byl (supra) Searle J, at 408, without providing any reasons, merely stated that, as the immovable property in question was situated in another province, the court did not have jurisdiction to declare it executable. Henning AJ in Weinbren’s Trust & Others v Holmes & Another (supra) dealt with the issue less tersely. He, save for Michaelis v Uys (supra), referred to and discussed all the cases referred to in paragraph 43 above and in addition referred to James v Lunden 1918 WLD 88 at 89; an article in the 1953 South African Law Journal at page 7; and the South African Law of Jurisdiction by Pollak and based the conclusion that the Durban & Coastal Division did not have the power to declare immovable properties situated in the Transvaal executable thereon that it seemed to him that a court in granting such relief, necessarily exercised jurisdiction “as it invariably does when it makes any order” and continued at 462 D – E:

“If I were to make the order asked for in this case, I would in effect order the Registrar of another court, within whose area the properties are situated, to issue a writ commanding the Sheriff of that Court to execute against immovable property without the necessity of first excusing the defendant’s movables (cf. Transvaal Rule of Court 129). I can find no warrant for such a course.”

He then continued and quoted the provisions of section 26 of the Supreme Court Act (prior to its amendment) and at 462 G – H said the following:

“It seems to me that the section does no more than provide a procedure enabling the judgment creditor to execute against property of the debtor which is outside the area of the Court in which judgment has been obtained. The mode of execution and the question whether movables should be excused before immovables are regulated by the Rules of the forum rei sitae. In my opinion the section does not confer, either expressly or by necessary implication, jurisdiction on one Division to declare executable immovable property situated in another Division. This interpretation leaves it open to the plaintiffs to approach the Court in whose area of jurisdiction the properties are to make the order now asked for by invoking the provisions of sec. 26 and making a formal application to the Court concerned.”

45] The decided cases in which it was held that courts do have the power to declare immovable property situated in the area of jurisdiction of another court executable are equally devoid of ascertainable general principles. The courts in African Farms v Goller (supra); Michaelis v Uys (supra) and Shandos v Botes (supra) merely granted orders without having provided any reasons. The court in Meugers v Tayside Township and Development Co Ltd (supra) considered the above-mentioned three decisions and then invoked the provisions of section 112 of the South Africa Act, 1909 (the South Africa Act) to justify the conclusion that the Witwatersrand Local Division possessed authority to declare immovable property situated in Natal executable. In Smythe v Holmes (supra); Gutsche J, based his decision that the Eastern Cape Local Division possessed the power to declare immovable property situated in the Transvaal executable, on an English Equity Rule as well as the fact that by virtue of the provisions of Section 112 of the South Africa Act a judgment of thát court would be effective in the Transvaal. In Colonial Mutual Life Assurance Society Ltd v Tilsim Investments (Pty) Ltd (supra) Hall J, in granting provisional sentence against the defendant (a company with its head office in Cape Town) in respect of the balance owing under a mortgage bond registered over an immovable property situated in Pretoria, granted an order declaring the mortgaged property executable on the basis that it constituted an exercise of the court’s discretion as to what procedure should be followed namely, excusing the plaintiff from first excussing the movables of a judgment debtor, so as to enable the judgment creditor to seek satisfaction of the judgment debt through the immediate excussion of the immovable property of the judgment debtor.

46] Henning AJ in Weinbren’s Trust & Others v Homes & Another (supra) at 462 B – D considered and referred to the decision of Hall J in Colonial Mutual Life Assurance Society v Tilsim Investments (Pty) Ltd (supra) and said the following:

“I do not, with respect, agree that the declaration of immovable property as executable is merely a procedural matter. It seems to me that in making such a declaration the Court necessarily exercises jurisdiction, as it invariably does when it makes any order (Cf: South African Law of Jurisdiction at pp 106 and 114)”.

47] In considering the conflicting viewpoints expressed in the Colonial Mutual Life Assurance Society v Tilsim Investments (Pty) Ltd and Weinbren’s Trust & Others v Holmes & Another cases, sight must not be lost of the statutory regimes that prevailed when they and the cases that preceded them were decided. Section 112 of the South Africa Act, provided that the registrar of every provincial division of the Supreme Court of South Africa, on the request of any party in whose favour a judgment or order had been given or made by any other division shall, if he was provided with an authenticated copy of such judgment or order and upon proof that it had remained unsatisfied, issue a writ or other process for the execution thereof and thereupon such writ or other process should be executed as if it had originally issued from the division of which he was the registrar. Part IV of the South Africa Act, which included section 112, was repealed by the Second Schedule to the Supreme Court Act, with effect from 27 June 1959 and substituted with the almost identically worded Section 26. The whole of section 26 was substituted by section 5 of Act 85 of 1963. Subsection 26(1), which was amended by Proclamation 222 of 1981 and section 23 of Act 129 of 1993, at present provides as follows:

“The civil process of a provincial or local division shall run throughout the Republic and may be served or executed within the jurisdiction of any division.”

It has been held that subsection 26(1) of the Supreme Court Act, in its present form was enacted, not to increase the jurisdiction of High Courts, but merely to facilitate execution (See: Ex Parte Boshoff 1972(1) SA 521 E; Estate Agents Board v Lek 1979(3) SA 1048 (A) at 1062 C to 1063 A). Vivier J (as he then was) said the following thereanent in Hare v Banimar Shipping Co SA 1978(4) SA 578 (C) at 583 C – G:

“From a comparison of s 26 of the Supreme Court Act, in its present form, with its predecessors it seems to me that s 26 has been amended to streamline the procedure for the enforcement of the process of one Division in the area of another, namely by doing away with the additional procedure previously required for that purpose and by making it apply automatically. It seems to me to be no more than a procedural change in order to facilitate execution and the wording falls far short of what I would have expected had the legislature intended to confer increased jurisdiction on one Division in respect of property or persons in another Division.”

47] In my view the outcome of the enquiry into whether a High Court has the power to declare immovable property situated in the area of jurisdiction of another court executable or not, depends on what the intrinsic character of the granting of such relief is. Does it necessarily entail the exercising of jurisdiction over immovable property situate in the area of jurisdiction of another court, in the sense that it amounts to ordering the registrar of that court to issue a writ commanding the Sheriff of that Court to execute against immovable property without first excussing the judgment debtor’s movables, as was held in Winbren’s Trust & Others v Holmes & Another (supra) at 462 D, or is it merely procedural of nature, in the sense that it merely regulates the sequence in which execution may take place, as was held in Colonial Mutual Life Assurance Society v Tilsim Investments (Pty) Ltd (supra)?

48] As the amendment of subsection 26(1) of the Supreme Court Act, did away with the cumbersome procedure previously provided for in Section 112 of the South Africa Act and section 26 of the Supreme Court Act, prior to its amendment, it is no longer necessary for a judgment creditor who wishes to excuss property situated in the area of jurisdiction of another provincial or local division to submit an authenticated copy of the judgment and an affidavit to the effect that it remains unsatisfied, to the registrar of such court, in order to obtain a writ of execution. It is clear from the provisions of Uniform Rules 45 and 46, read with Form 18, that a writ of execution is issued by the registrar of the court in which a judgment or order ad pecuniam solvendam has been obtained and that it is directed to the sheriff of the division in which the property to be attached is situated and requires such sheriff to file with such registrar the writ of execution with a return of what he has done thereon and also to provide a copy thereof to the party who caused the writ to be issued. The proviso to Uniform Rule 45(1) specifically provides that a writ of execution shall not be issued against the immovable property of any judgment debtor unless –

48.1 it appears to the registrar from a return rendered pursuant to the execution of a writ of execution against such judgment debtor’s movables that insufficient movables were found to satisfy the writ of execution; or

48.2 the immovable property has been specially declared executable by the court or the registrar, in the case of a judgment granted in terms of Uniform Rule 31(5).

49] It is axiomatic that a judgment or order ad pecuniam solvendam is an indispensable prerequisite for the issuing of a writ of execution. A judgment creditor who has obtained a judgment or order sounding in money is in law entitled to procure satisfaction thereof by electing to invoke any of the procedures recognised by the Supreme Court Act the Uniform Rules of court and the common law as a form of execution. Relief declaring immovable property executable entails no more than that a judgment creditor, who elects to obtain satisfaction of a judgment debt by means of execution against the judgment debtor’s immovable property, is excused from levying execution against the judgment debtor’s movables first (See: Tobacco Exporters and Manufacturers Ltd v Bradbury Road Properties (Pty) Ltd 1990(2) SA 420 (C) at 426 I). Didcott J (as he then was) in First National Bank of SA Ltd v Ngcobo and Another (supra), at 492 D, categorised it as not being a claim of any kind, but merely a request for a direction with regard to the execution of a judgment, which although claimed summarily and simultaneously, in essence, is ancillary thereto. Zulman J (as he then was) in Nedperm Bank Ltd v Verbi Projects CC (supra), at 29 C – D, described such relief as being ancillary to a judgment sounding in money and as constituting a matter of procedure. Those decisions, in my view, constitute support for the conclusion arrived at in the Colonial Mutual Life Assurance Society Limited v Tilsim Investments (Pty) Ltd (case) namely, that a declaration as to the executability of immovable property is merely part of the procedure by which the execution of a judgment debt is obtained and does not constitute an exercise of jurisdiction over such property by the court from which it issues, despite the fact that it was decided prior to the promulgation of section 26 of the Supreme Court Act.

50] I am in agreement with the submissions made by counsel for the second, third and fourth respondents to the effect that the decision in Weinbren’s Trust & Others v Holmes & Another (supra) is no longer good law in that –

50.1 it incorrectly characterised a declaration of executability as an order (See: First National Bank of SA Ltd v Ngcobo and Another (supra), at 492 D; Nedperm Bank Ltd v Verbi Projects CC (supra), at 219 C – D);

50.2 it assumed that the effect of the granting of such relief would amount to the ordering of the registrar of another court to execute directly against immovable property, which no longer appears to be the case, because, as a result of the amendment of section 26(1) of the Supreme Court Act, a writ issued by the registrar of the court granting the judgment or order, by operation of law, runs throughout the Republic of South Africa and may be executed within the jurisdiction of any division; and

50.3 it was based on the assumption that the mode of execution and the question whether immovable property should be excussed before movables, are regulated by the forum rei sitae whereas, since the promulgation of the Uniform Rules of Court in 1965 and the amendment of section 26(1) of the Supreme Court Act in 1963, that no longer appears to be the case.

51] Dicta in decided cases, in the context of applications to found or confirm jurisdiction, to the effect that the provisions of section 26(1) of the Supreme Court Act are not sufficient to give a court jurisdiction over property in another division (See eg: Hare v Banimar Shipping Co SA (supra) at 583 H – 584 A) must be treated with circumspection as the jurisdiction of a court to decide an application of that nature can arise only from the physical situation of the goods or right sought to be attached within a particular court’s area of jurisdiction (See: Uniroyal Inc v Thor Chemicals SA (Pty) Ltd 1984(1) SA 381 D).

52] It follows from what has been said above that I am not satisfied that the judgment of Hall J in Colonial Mutual Life Assurance Society Ltd v Tilsim Investments (Pty) Ltd (supra) is plainly wrong and accordingly consider myself bound thereby. In the premises I hold that the order declaring Erf 330 excecutable, the writ of execution issued and the sale of execution held pursuant thereto were valid, lawful and enforceable.

53] Mr Pincus further assailed the validity of the sale in execution on the basis that, ex facie the power of attorney granted by the fourth respondent to Geldenhuys, she acting in her capacity as the authorised agent (“volmagtigde agent”) of a company to be incorporated, authorised him –

53.1 to submit bids on behalf of the said company at the sale in execution of Erf 330 held on 16 November 2000, at 12h00;

53.2 to sign the Conditions of Sale on behalf of the said company; and

53.3 to take all steps necessary on behalf of the said company for the fulfilment of the terms of the Conditions of Sale and did not assume any personal liability under the said Conditions of Sale.

54] He submitted that no valid sale resulted “at the fall of the hammer” because first, there was no company bound to the sale in execution; and secondly, the fourth respondent was not personally liable either. On my understanding of the legal position, a valid agreement of sale comes into being at a sale in execution at the fall of the hammer on the terms and conditions set out in the Conditions of Sale which are displayed, pronounced or read out by the auctioneer (See: Schuurman v Davey 1908 TS 664 at 668; De Villiers v Parys Town Council 1910 OPD 55 at 58; Estate Francis v Landsales (Pty) Ltd and Others 1940 NPD 441 at 457; Clerke v CP Perks and Son 1965(3) SA 397 (ECD) at 400 C). The court in Pledge Investments (Pty) LTd v Kramer N.O.: In Re Estate Selesnik 1975(3) SA 696 (A), at 703 C – D, held that the purpose of the signing of the conditions of sale was “… to record and have certainty of the oral contract and it contents, as concluded by the auction sale, and to ensure that the auctioneer and the purchaser were bound thereto by reason of their signature.”

55] Clause 5 of the Conditions of Sale that provides that if the purchaser bought qua qualitate he, as soon as possible after the sale in execution and on being requested by the Sheriff had to sign it; state the name of his principal; and provide the address that the principal chooses as domicilium citandi et executandi. It is common cause that Geldenhuys displayed the power of attorney that had been granted to him by the fourth respondent to the first respondent’s deputy. Despite the fact that it must have been apparent from the terms thereof that Geldenhuys had acted as the authorised agent of the fourth respondent in her capacity as the authorised agent of the company to be incorporated, he signed the Conditions of Sale in his capacity as “representative of Johanna Steenhuizen”. That the capacity in which Geldenhuys acted and the fact that the Conditions of Sale required to be rectified because it clearly failed to correctly reflect the parties’ common intention, became an issue between the first- and fourth respondents defies understanding. Although the sale came into being between the first respondent and Geldenhuys upon the fall of the hammer, the written contract represented by the signed Conditions of Sale, as rectified, clearly fell within the ambit of the provisions of Section 35 of the Companies Act, No 61 of 1973, which provides that any such contract made by a person professing to act as agent or trustee of a company not yet incorporated, shall be capable of being ratified or adopted by, or otherwise made binding upon and enforceable by such company after it has been duly incorporated at the time the contract was made and such contract had been made without its authority. The sole purpose of that section is to counteract the reality that a company has no existence until its incorporation is complete, so that any contract entered into by a company before it comes into existence is a nullity and under the common law a relationship of principal and agent cannot exist, so that a contract purportedly entered into by an agent on behalf of a non-existent company is a nullity and incapable of being ratified after it is incorporated (See: Henochsberg on the Companies Act, Volume 1 page 60 – 61). Accordingly, the fact that there at the fall of the hammer and when the conditions of sale were signed was no company in existence as yet, is not legally of any consequence and did not result in the invalidity of the sale in execution. It, in terms of the provisions of Section 35 of the Companies Act, does not matter whether the person entering into a contract proposed to act as an agent or as trustee of the company not yet incorporated.

56] It is clear from what the fourth respondent states in her answering affidavit and the terms of the written power of attorney, that Geldenhuys was authorised to represent her in her capacity as authorised agent of a company to be incorporated and not to represent her in her personal capacity. It is further clear that she, in terms of clause 3 of the settlement agreement, accepted personal liability as purchaser in the event of the company not being incorporated by 30 November 2001. However, the conclusion that the settlement agreement, for that reason, does not give effect to fourth respondent’s true intention is a non-sequitur. The only rectification effected to the conditions of sale, in order to reflect the parties’ common intention was what is reflected in paragraph 1 thereof namely, to reflect the purchaser as Johanna Steenhuizen acting in her capacity as a trustee for a company or close corporation to be registered. Clauses 2, 3 and 4 of the settlement agreement deal with aspects not dealt with in the Conditions of Sale but clearly constituted terms of a collateral agreement entered into nearly a year later. Accordingly, clause 2 of the settlement agreement was never intended to reflect the parties’ common intention as at the time when the settlement agreement was entered into.

57] In the premises the submission that the sale in execution (I assume that it was intended to be a reference to the Conditions of Sale) was invalid and not susceptible of rectification lacks any merit.

58] Mr Pincus assailed the validity of the settlement agreement and the order made pursuant thereto on the basis that it amounted to a new agreement on terms different to those contained in the Conditions of Sale and not entered into between the same parties alternatively, that it constituted a variation of the conditions of sale and that the transfer of Erf 330 to the third respondent arose from such new agreement and not the Conditions of Sale.

59] He attritubed the invalidity of the so-called new agreement to the following three factors. First, that as the first respondent was prejudiced by the settlement agreement he should have been a party thereto, especially if it is borne in mind that rectification will not be granted if it adversely affects the rights of third parties. Second, that the respondent lacked the authority and power to have entered into the settlement agreement. Thirdly, that there was a failure to have complied with the formalities prescribed by the Alienation of Land Act, No 68 of 1981 (the Alienation of Land Act).

60] It, on even a cursory perusal of the settlement agreement, appears that it consists of the following clearly discernable components: -

60.1 Clause 1 which rectified the description of the purchaser in the Conditions of Sale;

60.2 Clauses 2, 3 and 4, which contain conditions that flow from the rectification of the description of the purchaser in the Conditions of Sale and were not embodied therein;

60.3 Clause 6, which provides for the payment by the fourth respondent of the first respondent’s costs in the application to compel performance of the Conditions of Sale in forma specifica; and

60.4 Clauses 5, 7, 8 and 9, which in effect purported to vary specific provisions of the Conditions of Sale.

61] Although the settlement agreement is a single contract in appearance it, in my view, is an integration of several contracts which, apart from the components in 60.1 and 60.2 above, are independent and not interrelated. As the components in 60.1 and 60.4 are reconcilable only with the continued existence of the Conditions of Sale, the submissions that the settlement agreement constituted a new agreement and that the transfer of Erf 330 to the third respondent arose therefrom, in my view, do not have any merit whatsoever.

62] In my view, the settlement agreement encompasses the following disparate agreements: -

62.1 the first, pertaining to the terms on which the issues in case no 1559/2001, referred in paragraph 6 above, were settled (Clauses 1 and 6);

62.2 the second, dealing with matters that flow from the rectification of the description of the purchaser in the Conditions of Sale and could best be described as an agreement collateral to the Conditions of Sale as rectified (Clauses 2, 3 and 4); and

62.3 the third, which purported to vary certain matters that had specifically been provided for in the Conditions of Sale such as -

62.3.1 the date by which the purchase price had to be paid in full;

62.3.2 the interest rate applicable to the balance of the purchase price;

62.3.3 the identity of recipient of the purchase price;

62.3.4 the person to whom the guarantee for payment of the balance of the purchase price had to be provided as well as the date by which it had to be done; and

62.3.5 that the deposit paid to the first respondent had to be paid to Nedcor Investment Bank Limited.

63] It is common cause that the first respondent instructed Harrisons Attorneys, who, as already stated, also acted as the second respondents’ attorneys, to represent him in instituting an application against the fourth respondent to enforce the Conditions of Sale in forma specifica. It is also common cause that the settlement agreement was signed by Harrison on behalf of the first respondent and by the fourth respondent personally; that the first respondent was not only unaware that the matter had been set down for hearing on 7 November 2001; but that Harrison had entered into the settlement agreement without the first respondent’s express consent and without his knowledge. It does however appear that Nedcor Investment Bank’s attorneys advised the first respondent that the application had been settled; provided him with an unsigned copy of the order made pursuant thereto; and that he, in compliance with the terms thereof, paid the deposit of R550 000 into an account with Nedcor Investment Bank Limited.

64] Did the first respondent possess the power and authority to have instituted proceedings against the fourth respondent for the enforcement of the conditions of sale?

65] A sheriff may not sell immovable property attached pursuant to a duly issued writ of execution otherwise than by way of a public auction and his authority is created and circumscribed by the provisions of Uniform Rule 46 (See: Schoerie N.O. v Syfrets Bank Ltd and Others 1997(1) SA 764 (D & CLD) at 771 G; 773 J – 774 A). When a sheriff disposes of property in pursuance of a sale in execution he acts as an “executive of the law” and not as an agent of any person. When a sheriff as part of the execution process commits himself to the terms of the Conditions of Sale, he by virtue of his statutory authority, does so in his own name and may also enforce it on his own (See: Syfrets Bank Ltd and Others v Sheriff of the Supreme Court, Durban Central and Another 1993(3) SA 671 (T) at 676 A – C). A sale in execution of immovable property entails two distinct transactions namely, the sale itself and the passing of transfer pursuant thereto (See: Syfrets Bank Ltd and Others v Sheriff of the Supreme Court, Durban Central and Another (supra) at 778 A – B). Although Uniform Rule 46 does not specifically empower a sheriff to institute proceedings in order to enforce the contract embodied in the Conditions of Sale, such power is implicit in the duty to see that transfer is passed and the provisions of Uniform Rule 46(13) which impose an obligation upon him to do anything necessary to effect registration of transfer. If that were not so the sheriff’s only remedy, in the event of a purchaser failing to carry out any of his or her obligations under the conditions of sale, would be to approach a judge in chambers for the cancellation thereof in terms of Uniform Rule 46(11) and would allow recalcitrant purchasers at sales in execution to avoid their obligations almost with impunity.

66] I, accordingly, incline to the view that the first respondent did have the power and authority to institute proceedings against the fourth respondent to enforce compliance with the terms of the Conditions of Sale.

67] Did Harrison have the necessary authority to enter into the settlement agreement and to sign it on behalf of the first respondent?

68] It is clear from what the first respondent stated in his report filed in application number 13092/2000 instituted in the Transvaal Provincial Division of the High Court and in his founding affidavit in the application instituted in this court under number 1559/2001 that he instructed Harrisons Attorneys to bring an application in his name in order to enforce the terms of the Conditions of Sale against the fourth respondent. There is no evidence on record that the first respondent in any way fettered the said attorneys’ mandate. It appears to be self-evident that any attorney’s mandate may be so widely formulated that it, either expressly or by implication, includes authority to enter into a settlement agreement on behalf of his client (See: Goosen v Van Zyl 1980(1) SA 706 (O) at 709 F). South African courts have followed a well-established approach in English Law namely, that counsel properly instructed to appear on behalf of a litigant has implied authority to conclude a settlement of the litigation on behalf of his or her client, provided that he or she acts bona fide in the interests of the client and not contrary to specific instructions (See: Dlamini v Minister of Law and Order and Another 1986(4) SA 342 (D & CLD) and the authorities referred to therein). An instructing attorney of record stands in the same position at any stage prior to the assumption of control of the matter by counsel (See: Hlobo v Multilateral Motor Vehicle Accidents Fund 2001(2) SA 59 (SCA) at 65 D – E) but subject to the caveat that the settlement does not involve any matter collateral or extraneous to the action (See: Waugh v H.B. Clifford and Sons Ltd and Others 1982(1) All ER 1095 (CA) at 1104 j – 1105 a; 1106 c – d).

69] The ambit of Harrison’s authority in the handling of the application was circumscribed by the relief claimed in prayer 1 of the Notice of Motion as well as the contents of the first respondent’s founding affidavit, especially paragraph 26 thereof, in which he tendered to transfer Erf 330 to a company to be nominated and registered by the fourth respondent. The purpose of the rectification of the description of the purchaser in accordance with clause 1 of the settlement agreement was to procure registration of Erf 330 in the name of a company to be nominated and registered by the first respondent and thát clearly fell within the ambit of Harrisons’ unrestricted authorisation, as did the agreement in clause 6 of the settlement agreement relating to the payment by the fourth respondent of the costs of the application. As the matters that were dealt with in clauses 2, 3 and 4 of the settlement agreement flow from and were reasonably incidental to the provision for rectification in clause 1 of the settlement agreement, such matters, in my view, were also impliedly encompassed in Harrison’s authority to enter into a settlement agreement on behalf of and in the absence of first respondent and without his knowledge.

70] As Harrison’s mandate was confined to enforcing the Conditions of Sale in forma specifica, and the first respondent’s power as regards the passing of transfer of Erf 330 was circumscribed in the manner set out in paragraph 65 above, the purported variation of certain terms of the Conditions of Sale by clauses 5, 7, 8 and 9 of the settlement agreement, clearly fell outside the ambit of his implied authority to settle the opposed application. It is trite that in the absence of authorisation Harrison could not have performed any juristic acts binding on the first respondent (See: AJ Kerr: the Law of Agency (3^rd Edition) at 122; Lawsa, Volume 11 (2^nd Edition) paragraph 187; De Wet en Van Wyk: Kontraktereg en Handelsreg, (5^th Edition) at 114). Accordingly, clauses 5, 7, 8 and 9 of the settlement agreement are unenforceable. The fact that those clauses are unenforceable, in my view, does not affect the validity of the remainder of the settlement agreement. I say so because they, in my view, are severable from the other components of the settlement agreement.

71] The fundamental and governing principle for determining severability is to have regard to the probable intention of the parties as it appears in or can be inferred from the terms of the contract as a whole. Performance will usually, by its very nature, be divisible where the contract makes provision for separate or distinct performances (See: Bob’s Shoe Centre v Heneways Freight Services (Pty) Ltd 1995(2) SA 421 (SCA) at 429 E; 429 H). In my view that is the position in the case of the settlement agreement. Whereas clauses 1, 2, 3, 4 and 6 of the settlement agreement affect the legal relationship between the first and fourth respondents, clauses 5, 7, 8 and 9 thereof, not only vary the contents of certain obligations provided for in the Conditions of Sale, but also introduce Nedcor Investment Bank Ltd as the party to whom performance of certain obligations had to be made by both the first and fourth respondents without it having been a party to the settlement agreement.

72] I accordingly incline to the view that the submission that the settlement agreement constituted a new agreement and that Erf 330 was transferred to the third respondent pursuant thereto has no merit whatsoever. In my view, transfer thereof took place pursuant to the Conditions of Sale as rectified by Clause 1 of the settlement agreement. As I have found that the purported variation of the Conditions of Sale by clauses 4, 5, 7 and 9 of the settlement agreement was ineffectual, the submissions that they constituted a variation of the Conditions of Sale that deleteriously affected the interests of the applicant and that it is invalid because the applicant was not a party thereto, have no merit either.

73] As in terms of the provisions of section 3(1) of Section 2(1) of the Alienation of Land Act, the provisions of section 3(1) thereof do not apply to sales of land by public auction, the submission that the settlement agreement was invalid because Harrison had not been authorised in writing to conclude it does not have any merit.

74] It follows from what has been set out in great length above that I am not satisfied that the applicant has discharged the onus in respect of the “threshold test” for the granting of the relief sought namely, prima facie proof, although open to doubt, of the existence of a right in terms of substantive law (See: Spur Steak Ranches Ltd v Saddles Steak Ranch 1996(3) SA 706 (C) at 714 (C)). Thát finding obviates the need to consider whether any of the other requirements for the granting of a temporary interdict have been shown to be present.

75] Even if I have erred in having found that the applicant failed to satisfy the threshold test and assuming further that all the other requirements for the granting of interim relief have been shown to be present, I in the exercise of the wide discretion bestowed upon a court in matters of this nature (See: Lawsa, Volume 11 (1^st Reissue), paragraph 321), would have refused to grant the interdict, not on the basis that I have a full and unfettered discretion, but on the basis of the following features:

75.1 The applicant’s sole share-holder and director, in order to ensure that the sale in execution yielded sufficient to indemnify her against being liable as surety for the obligations of the applicant, procured the fourth respondent to provide a power of attorney to the former’s attorney for a purchase price of R5.5 million; was fully aware of what had happened at the sale in execution; was fully aware of the terms of the settlement agreement entered into between the first and fourth respondent; and, save that she disputed the amount that was to be paid to the applicant after payment of the judgment debt from the proceeds of the sale in execution, waited until 10 November 2003 before instituting an action under case no: 9473/2003 in this court for, inter alia, the setting aside of the order declaring Erf 330 executable, as well as the settlement agreement and that the transfer thereof into the name of the third respondent be set aside.

75.2 Due to inordinate dilatoriness of on the part of the applicant and undue prevarication about the time and the true basis of its cause of action, details whereof have been fully set out in paragraph 17 to 28 above, the pleadings in the action are not even near to being finalised and a date of hearing, to put it euphemistically, remote. The delays are not surprising if regard is had to the extent of the applicant’s straightened financial circumstances, which are so severe that it had to resort to procedural ploys to ward off an application for its winding-up and, in the words of its own counsel, could not provide security to the second respondent out of its own resources.

75.3 The temporary interdict sought by the applicant is predicated thereon that it is entitled to recover Erf 330 by means of the rei vindicatio. Not only do our courts lay stress on the qualified inviolability of completed sales in execution (See: Sookdeyi and Others v Sahadeo and Others 1952(4) SA 568 (A) at 571 H – 572 B) but recognise an abstract approach to the transfer of ownership in immovable property, which is to the effect that any defect in the underlying causa does not affect the validity of the transfer of the real right (See: Trust Bank van Suid Afrika Bpk v Western Bank en Andere 1978(4) SA 281 (A) at 301 H – 302 A). If that be the case, the third respondent is the owner of Erf 330, despite any defects in the agreement embodied in the Conditions of Sale and the settlement agreement. Accordingly, the rei vindicatio would not be at the applicant’s disposal. Ownership in Erf 330 would not have passed to the third respondent if there was no sale in execution or if it was a nullity (See: Joosub v JI Case SA (Pty) Ltd 1992(2) SA 665 (N) at 674 G). The judgment on which the warrant of execution was based was unassailed and its executibility against the mortgage property automatically arose by application of law upon default of payment by the applicant (See: Nedcor Bank Ltd v Kindo and Another 2002(3) SA 185 (C) at 188 B – D). As all the formalities regarding the conducting of a sale in execution were complied with it could not be contended that there was no sale. Neither was it contended that the sale in execution was a nullity. The high-water mark of the applicant’s case was that it was invalid and for that reason had to be set aside; and

75.4 The unlikelihood that the court in the action will grant an order the consequences whereof will be that a transaction that has been completed for a number of years, save for a final accounting to the applicant of the excess of the proceeds of the sale in execution, on the basis that the purported amendments to the Conditions of Sale were ineffectual, will have to be unravelled and will require –

75.4.1 that restitution be made that will entail the repayment of all moneys paid;

75.4.2 the expungement of the registration of ownership in the third respondent’s name as well as any mortgage bonds that may have been registered; and

75.4.3 the resuscitation of any transactions that have been registered against Erf 330, but have in the interim been cancelled, with disregard of the interests of any innocent third parties, such as mortgagees as well as the seventh respondent.

76] Accordingly the application for the relief sought in prayer 2 of the Notice of Motion is dismissed. The applicant is ordered to pay the costs of the first, second, third, fourth and seventh respondents, including any costs incurred in the employment of two counsel when so employed. Such costs are to include the applications and/or appearances on 25 February 2005; 28 February 2005; 3 March 2005 and 10 March 2005 and in respect of which no orders for costs have been made as yet.

77] The following order made by me on 28 February 2005 is hereby set aside:

“Die registrateur van aktes word belet om Erf 330 Clifton aan die sewende respondent oor te dra tot hy deur hierdie hof in kennis gestel is dat die belet opgehef is.”

78] The Registrar of this court is directed and authorised forthwith to advise the Registrar of Deeds, Cape Town of this part of the order telephonically as well as by facsimile transmission.

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D. VAN REENEN

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