Knox NO v Mofokeng and Others

• Jurisdiction: South Africa
• Citation: 2013 (4) SA 46 (GSJ)

Knox NO v Mofokeng and Others
2013 (4) SA 46 (GSJ)

2013 (4) SA p46

Citation	2013 (4) SA 46 (GSJ)
Case No	2011/33437
Court	South Gauteng High Court, Johannesburg
Judge	LJ Van Der Merwe AJ
Heard	January 30, 2012
Judgment	January 30, 2012
Counsel	M Strydom for the applicant.; SPM Vorster for the third respondent.

Flynote : Sleutelwoorde F

Execution — Sale in execution — Immovable property — Where judgment under which sale in execution carried out rescinded after registration of transfer G to bona fide purchaser — Abstract theory of passing of ownership applicable — Judgment debtor not entitled to recover property from bona fide purchaser, unless real agreement between sheriff and purchaser defective — Rescission of judgment not retroactively invalidating real agreement — However, if sale in execution invalid, sheriff's lack of authority to H pass transfer constituting defect in both underlying and real agreement.

Sale — Land — Transfer — Abstract theory of passing of ownership — Common-law adage, that no one may transfer more rights than he or she has, applicable to real agreements between successive bona fide purchasers — Accordingly, where transfer passed to bona fide purchaser in terms of defective real agreement and thereafter passed to successive bona fide I purchaser/s, such successive real agreement/s also defective.

Headnote : Kopnota

This case concerns (1) the rights of bona fide purchasers of property at sales in execution where the judgment under which the sale in execution was carried out was subsequently rescinded; and (2) the validity of the transfer of immovable property to a chain of successive (bona fide) purchasers J under such circumstances. These issues turn on the implications of the

2013 (4) SA p47

abstract theory for the passing of ownership, and the application of the A common-law adage that nobody can transfer more rights to another than he himself has. (Paragraphs [1] and [4] at 48G and 49G – I.)

In Legator McKenna Inc and Another v Shea and Others 2010 (1) SA 35 (SCA) the abstract theory was explained as follows:

'The requirements . . . are twofold, namely delivery — which in the B case of immovable property is effected by registration of transfer in the deeds office — coupled with a so-called real agreement. . . . The essential elements of the real agreement are an intention on the part of the transferor to transfer ownership and the intention of the transferee to become the owner of the property. . . . Broadly stated, the principles applicable to agreements in general also apply C to real agreements. Although the abstract theory does not require a valid underlying contract, eg sale, ownership will not pass — despite registration of transfer — if there is a defect in the real agreement. . . .'

This implies that the transferor must be legally competent to transfer the property; that the transferee must be legally competent to acquire the D property; and that the common-law adage, that no one can transfer more rights than he himself has, also applies to the real agreement. (Paragraph [19] at 56A – E.)

An application of the abstract theory dictates the conclusion that rescission of the judgment in terms whereof a sale in execution had taken place will only entitle a judgment debtor to recover the property from a bona fide E purchaser who had received transfer if the real agreement in terms whereof transfer was effected was defective. The fact that a judgment which had been validly granted is subsequently rescinded after transfer had been effected, cannot retroactively affect the validity of the real agreement in respect of the transfer of the property. (Paragraphs [5] and [24] at 49J – 50G and 58B – J.)

In the present case the sale in execution constituted a nullity. The result of F an invalid sale in execution is not only that the underlying sale agreement concluded at the sale is invalid, but also that the real agreement is defective, since the sheriff did not have authority to transfer the property to the second respondent pursuant to the purported sale in execution of the property. The transfer of the property to the second respondent was accordingly invalid, as was the subsequent sale and transfer of the property by him to the first G respondent: the nemo plus iuris rule applied also to the real agreement in respect of the second sale. The applicant is accordingly in principle entitled to claim vindication of the property. (Paragraphs [18] and [27] – [28] at 55F – 56A and 60B – H.)

Cases Considered

Annotations H

Case law

Absa Bank Ltd v Van Eeden and Others 2011 (4) SA 430 (GSJ): referred to

Campbell v Botha and Others 2009 (1) SA 238 (SCA): compared

De Faria v Sheriff, High Court, Witbank 2005 (3) SA 372 (T): compared

Du Plessis v Prophitius and Another 2010 (1) SA 49 (SCA): referred to I

Gounder v Absa Bank Ltd and Another 2008 (3) SA 25 (N): compared

Gundwana v Steko Development and Others 2011 (3) SA 608 (CC) (2011 (8) BCLR 792; [2011] ZACC 14): referred to

Jaftha v Schoeman and Others; Van Rooyen v Stoltz and Others 2005 (2) SA 140 (CC) (2005 (1) BCLR 78; [2004] ZACC 25): referred to

Jasmat and Another v Bhana 1951 (2) SA 496 (T): referred to J

2013 (4) SA p48

A Jones and Others v Trust Bank of Africa Ltd and Others 1993 (4) SA 415 (C): referred to

Joosub v JI Case SA (Pty) Ltd (now known as Construction & Special Equipment Co (Pty) Ltd) and Others 1992 (2) SA 665 (N): compared

Jubb v Sheriff, Magistrate's Court, Inanda District and Others; Gottschalk v Sheriff, Magistrate's Court, Inanda District and Others 1999 (4) SA 596 (D): B compared

Kaleni v Transkei Development Corporation and Others 1997 (4) SA 789 (TkS): referred to

Legator McKenna Inc and Another v Shea and Others 2010 (1) SA 35 (SCA): applied

Lottering v SA Motor Acceptance Corporation Ltd 1962 (4) SA 1 (E): referred to C

Maisel v Camberleigh Court (Pty) Ltd 1953 (4) SA 371 (C): referred to

Meintjes NO v Coetzer and Others 2010 (5) SA 186 (SCA): referred to

Menqa and Another v Markom and Others 2008 (2) SA 120 (SCA): dictum in para [24] compared

Oriental Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others D 2011 (2) SA 508 (SCA): dicta in paras [15] and [26] applied

Sookdeyi v Sahadeo 1952 (4) SA 568 (A): compared

Van der Walt v Kolektor (Edms) Bpk en Andere 1989 (4) SA 690 (T): referred to

Vosal Investments (Pty) Ltd v City of Johannesburg and Others 2010 (1) SA 595 (GSJ): compared

E Wright v Westelike Provinsie Kelders Bpk 2001 (4) SA 1165 (C): dictum in para [49] applied.

Case Information

M Strydom for the applicant.

SPM Vorster for the third respondent.

F An application for retransfer of property sold in execution, and for related declaratory orders. The order is in para [32].

Judgment

LJ van der Merwe AJ:

[1] This judgment concerns the rights of bona fide purchasers of G property at sales in execution where the judgment in terms whereof the sale in execution was effected has been subsequently rescinded. It also concerns the validity of the transfer of immovable property to a chain of successive purchasers under such circumstances. The conclusion reached in this judgment is that the legal consequences of rescission of H the judgment in question subsequent to the sale in execution differ, depending on whether transfer of ownership had already been effected or not.

[2] It has been accepted in the case law that where a judgment is rescinded after a sale in execution had taken place, but before transfer of I the property to the purchaser had taken place, the owner of the property is entitled to seek an order setting the sale in execution aside and interdicting the transfer of the property to the purchaser at the sale in execution. See eg Vosal Investments (Pty) Ltd v City of Johannesburg and Others 2010 (1) SA 595 (GSJ); Jubb v Sheriff, Magistrate's Court, Inanda District and Others; Gottschalk v Sheriff, Magistrate's Court, Inanda District and Others J 1999 (4) SA 596 (D) at 605F – G. In the Vosal Investments

2013 (4) SA p49

LJ Van der Merwe AJ

judgment (at para 16), the South Gauteng full bench accepted the A statement in the Jubb judgment (at 606F – G), with reference to the judgment by McCall AJ in Joosub v JI Case SA (Pty) Ltd (now known as Construction & Special Equipment Co (Pty) Ltd) and Others 1992 (2) SA 665 (N), that the owner of an immovable property is entitled to restoration of his property from a bona fide purchaser at a sale in B execution, 'where a sale of property not followed by transfer is rendered a nullity by reason of the rescission of the judgment which alone gave it validity'. It was also accepted by the South Gauteng full bench in Vosal Investments (at para 16) that, where the purchaser of the property at the sale in execution became aware of the claims of the owner (because he C was aware of the owner's application for rescission of the judgment) prior to registration of transfer having been effected, such purchaser is also obliged to restore possession to the owner once the judgment has been rescinded. This approach was based on the conclusion that the purchaser was aware of the attack on the judgment by the owner and, on the consequent sale in execution, had knowledge that some risk might attach D to his rights as buyer of the property.

[3] It has further also been accepted in the case law that, where a default judgment has been rescinded subsequent to the sale in execution, both the default judgment and the warrant of execution issued in terms of the judgment become null and void and of no effect as between the E judgment creditor and the judgment debtor. In such event, the judgment debtor is entitled to have the status quo ante restored as against the judgment creditor. The warrant of execution and the sale of execution were all dependent on the...