Industrial Development Corporation of South Africa Limited v Calab Developers (Pty) Ltd and Others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: B Hartle J
• Judgment Date: 31 May 2022
• Docket Number: 16/2021
• Hearing Date: 07 December 2021
• Court: East London Circuit Local Division
• Citation: 2022 JDR 1635 (ECGEL)

Hartle J:

[1]

On 19 November 2021 the applicant issued out an application on an urgent basis (under the same case number as a prior action issued by the first respondent against the third respondent and First National Bank) claiming the following relief under PART A:

"1.

That the Applicant's non-compliance with Rule 6 of the uniform rules be condoned and the forms and service provided (for) in terms of the Rules be dispensed with and the matter be disposed of as one of urgency in terms of Rule 6 (12)(a);

2.

That the writ of execution issued on 18 November 2021, against the movable property, corporeal and incorporeal, against the third respondent be stayed pending the finalization and determination of Part B;

3.

That the writ of execution against the third respondent dated 30 August 2021, in respect of the Double Cab Isuzu Bakkies, white in colour, with registration numbers JKK 828 EC/JFS 588 EC [1] and JFS 585 EC ("Motor Vehicles"); be stayed pending finalization of Part B to be instituted, duly supplemented, within 21 days from the date of this order by the applicant.

Alternatively, should the Motor vehicles have been sold at public auction:

4.

That the respondents be interdicted from passing transfer of ownership and registration of the motor vehicles described in the notice of sale in execution dated 25 October 2021, more specifically Double Cab Isuzu Bakkie with registration number JFS 588 EC, held on 16 November 2021, under the above case number to any person, natural or juristic, pending the finalization of Part B to be instituted, duly supplemented, within 21 days from the date of this order by the applicant.

5.

that the application be referred for complaint for the conduct of the second respondent to the South African Board of Sheriffs in terms of Section 44(1) of the Sheriffs Act 90/1986.

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Hartle J

6.

That the application be referred to the legal practice council for complaint against the conduct of the fifth respondent.

7.

That the respondents, pay the costs of the application, on an attorney and client scale, jointly and severally, one paying the other to be absolved, if so opposed. (sic)

[2]

The relief which it indicated would ultimately be pursued under PART B was for an order that "a writ of execution against the third respondent dated 30 August 2021, in respect of motor vehicles [2] be declared unlawful and set aside" (its interest in these motor vehicles was based on the fact that they had been notarially pledged to it by the third respondent as security pursuant to a loan extended to it), that the "sales in execution" (sic) [3] dated 27 September and 28 October 2021 in respect of the two motor vehicles, held on 14 October 2021 and 16 November 2021 respectively, be declared unlawful and set aside, and that "the respondents" pay its costs on a punitive scale.

[3]

The matter initially came before the duty judge on 23 November 2021 but was struck off the roll because the papers were not in order. [4]

[4]

A directive was issued by my colleague permitting the applicant's papers to be supplemented and updated. The matter was re-enrolled for hearing before me. The issue of urgency was reserved for determination by the court hearing the matter.

2022 JDR 1635 p4

Hartle J

[5]

In a certificate of urgency filed on behalf of the applicant dated 19 November 2021 it was recognized that the first of the two pledged motor vehicles had already been sold in execution "around" 21 October 2021 in consequence of which the applicant acknowledged that it had already "lost its real right in respect of the first motor vehicle". The second motor vehicle was set to have been sold in execution on 16 November 2021. This sale too was acknowledged to have happened already as was intimated by the alternative relief prayed for under Part A set out above, but the applicant hoped to stave off its completion on the expectation that "transfer and registration should not yet be complete". Counsel on behalf of the applicant, Mr. Mathopo, lamented that the applicant had been unable to acquire a full set of the court papers in respect of the judgment debt that had foregone the attachment (in explaining the uncertainty regarding the status of the second sale in execution) but asserted that the anticipated urgent application warranted "extreme urgency consideration due to the immediate and permanent nature of the transfer of ownership, should it occur".

[6]

Mr. Mathopo filed a revised certificate of urgency after the matter was initially struck from the roll insisting that the urgency that had pertained at the outset when the application was launched remained and asserted that "the relief sought by the applicant and the immediate relief is alive and imminent".

[7]

The following brief background is relevant.

[8]

Calab Developers (first respondent) had entered into a loan agreement with the third respondent (Purple Sunshine) in March 2018. As security for that obligation Purple Sunshine had pledged the two Double Cab Isuzu motor vehicles referred to in the applicant's prayers above ("the vehicles"), to Calab Developers under two special notarial covering bonds that were duly registered with the Deeds Office in 2018 and 2019 respectively.

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Hartle J

[9]

In the first bond (BN 4360/2018) the two vehicles are vaguely described in an annexure to the loan agreement as two in quantity "Double Cabs Isuzu" with a unit price valuation of "R 398 248.2" (sic). [5] In the second special notarial covering bond (BN 3748/2019) the vehicles are specifically described by their make, model, further asset description and more importantly by their registration letters and numbers. The earlier 2017 model was referenced in this regard as JFS 588 EC and the latter 2018 model as JFS 585 EC.

[10]

The first respondent obtained a judgment in this court against Purple Sunshine (the third respondent) in EL Case No. 16/2021 [6] on 17 June 2021. It consequently issued a warrant of execution against Purple Sunshine's property to satisfy its judgment debt pursuant to which the sheriff (second respondent) evidently attached the motor vehicles. [7] The motor vehicle with registration letters and numbers JFS 585 EC was sold in execution at a public auction on 14 October 2021. The second vehicle with registration letters and numbers JFS 588 EC was sold in execution at a public auction on 16 November 2021.

[11]

On 16 November 2021 the applicant's attorneys addressed a letter to the sheriff alluding to the sale of the last vehicle that had happened that day, asserting inter alia in this respect that:

2022 JDR 1635 p6

Hartle J

"2.4

My instructions are further to advise you that the said motor vehicle sold in execution is owned and is the property of my client in terms of the Special Notarial Bond entered into between my client and Purple Sunshine Trading 70 (Pty) Ltd.

3.

I have been instructed to demand from you that you do not pay over the proceeds of the sale in execution of the above motor vehicle to the attorneys of the execution creditor. (Identified earlier in the correspondence as the fifth respondent)

4.

Counsel is currently finalizing an application to set aside the sale in execution and to interdict your offices from paying the proceeds of the sale in execution to the attorneys for creditor until finalization of our application by the High Court."

[12]

Evidently (and in my view not unsurprisingly because of its confusing and vague content, and the lack of any firm intimation that the sheriff was being asked to embark upon a formal process in terms of Uniform Rule 58 or what basis existed to vitiate the sale or render the sheriff's conduct in respect thereof subject to judicial scrutiny) this letter evoked no response from the sheriff.

[13]

It further emerged that the applicant's attorneys had on 12 November 2021, days before the 16 November 2021 sale in execution and in anticipation thereof, also placed the sheriff, fifth respondent (acting on behalf Calab Developers) and Purple Sunshine on terms as follows:

"Dear Sirs

We refer to the Notice of Sale in Execution dated 25 October 2021 attached herein for your attention.

Please be advised of the following:

1.

The Sheriff East London, on the instructions of Sipunzi Attorneys, has attached and intends to sell in execution a movable asset, KB 2004 Isuzu Bakkie, as described in the Notice of Sale in Execution;

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Hartle J

2.

The asset belongs to the IDC [8] and is registered under the IDC's Special Notarial Bond Number: 4360/2018, [9] attached herein for ease of reference, and therefore cannot be sold in execution without the IDC's written consent; [10]

3.

Please regard in this correspondence as notice advising your offices that the rightful title holder of the asset is the IDC; [11] and

4.

Should your offices instruct the Sheriff to proceed with the sale of this motor vehicle on 16 November 2021, the IDC will take legal steps and seek an adverse cost order. [12]

Kindly confirm receipt of this email and that the sale will not proceed.

We request this confirmation before or on 15 November 2021, 12h00.

Please note that the IDC's rights remain reserved."

[14]

The sheriff replied within minutes and indicated that it would be referring the applicant's attorney's email to the instructing attorney (the fifth respondent) for their comment and reply.

2022 JDR 1635 p8

Hartle J

[15]

The applicant alleges however that...