Velcich and Others v Land and Agricultural Bank of South Africa and Others

• Jurisdiction: South Africa
• Citation: 1996 (1) SA 17 (A)

Velcich and Others v Land and Agricultural Bank of South Africa and Others
1996 (1) SA 17 (A)

1996 (1) SA p17

Citation	1996 (1) SA 17 (A)
Case No	728/93
Court	Appellate Division
Judge	Joubert JA, Nestadt JA, M T Steyn JA, Van Den Heever JA and Schutz JA
Heard	May 23, 1995
Judgment	August 31, 1995
Counsel	D G Williams for the appellants.; H B Malan for the respondents.

Flynote : Sleutelwoorde E

Agriculture — Land Bank — Sale of farm by public auction in terms of s F 55(2)(b) of Land Bank Act 13 of 1944 — Auction advertised as being held free of any leases — Land Bank unaware of existence of an unregistered sublease of farm — Bids received inadequate to satisfy secured claim of Land Bank — Land Bank purchasing farm and selling it in terms of s 72(2) of Act — Failure to sell farm subject to lease not affecting validity of G sale — Lease not surviving sale of farm.

Landlord and tenant — Sublease — Subleased premises sold in execution in terms of s 55(2)(b)of Land Bank Act 13 of 1944 — Whether sold subject to sublease — Auction advertised as being held free of any leases — Land Bank H unaware of existence of an unregistered sublease of farm — Bids received inadequate to satisfy secured claim of Land Bank — Land Bank purchasing farm and selling it to third party in terms of s 72(2) of Act — Land Bank purchasing farm with clean title and subsequently selling it with clean title — Sublease not binding on Land Bank or third party. I

Headnote : Kopnota

One M had leased a farm to the first and second appellants. In terms of certain mortgage bonds registered over the farm in favour of the first respondent (the Land Bank), the bonds were made subject to the provisions of the Land Bank Act 13 of 1944. The Land Bank was unaware of the existence of the lease. M's estate was subsequently sequestrated. After his sequestration M consented, in terms of the provisions of the lease, to the first and second appellants subletting the farm to the third J appellant,

1996 (1) SA p18

A such sublease being unregistered. In view of the insolvency of M, the Land Bank, acting in terms of s 55(2)(b) of the Land Bank Act, decided to sell the farm by public auction. The sale by auction was advertised as being 'free of any leases . . .'. At the auction no bids sufficient to satisfy the Land Bank's secured claim was received. The Land Bank itself accordingly purchased the farm and later sold it to the third respondent in terms of s 72(2) of the Land Bank Act. The appellants then applied to a Provincial Division for an order declaring that the lease was still B valid, binding and enforceable as against the respondents, and that the sublease was valid, binding and enforceable as against the respondents. It was contended by the appellants that, in accordance with accepted procedure, the farm should have been sold subject to the lease.

Held, concurring with the finding of the Court a quo that '(e)ven if the farm was sold according to the accepted procedure the result would have C been the same' (namely that the highest bid would have still been lower than the Land Bank's claim), that the lease did not survive the sale in execution of the farm. (At 21B-D, paraphrased.)

Held, accordingly, that the sale of the farm by the Land Bank to the third respondent was free of the lease. (At 21D.)

Held, further, that as no mention had been made of the sublease at the sale in execution, as the sublease was unregistered and as the Land Bank had at all relevant times had no knowledge of its existence, the Land Bank D had in fact bought the farm with a clean title free of the sublease and had subsequently sold with a clean title to the third respondent. (At 21J-22A/B.)

Held, accordingly, that the sublease was not binding upon and not enforceable against the Land Bank and/or the third respondent. (At 22B.) Appeal dismissed.

The decision in the Transvaal Provincial Division in Velcich and Others v Land and Agricultural Bank of South Africa and Others confirmed.

Cases Considered

Annotations

Reported cases

The following decided cases were cited in the judgment of the Court:

E Lubbe v Volkskas Bpk 1992 (3) SA 868 (A)

Wiber v Mahodini (1904) 21 SC 645.

Case Information

Appeal from a decision in the Transvaal Provincial Division (Roux J). The facts appear from the judgment of Joubert JA.

D G Williams for the appellants.

H B Malan for the respondents. F

In addition to the decided cases cited in the judgment of the Court, counsel on both sides referred to the following authorities:

Administrator, Transvaal, and Others v Theletsane and Others 1991 (2) SA 192 (A) G at 195-6

Albertyn and Another v Van der Westhuyzen and Others (1887) 5 SC 385

Bank of Lisbon & South Africa Ltd v The Master and Others 1987 (1) SA 276 (A) at 290D-E

Burrows v McEvoy 1920 CPD 229

De Beers Holdings (Pty) Ltd v Commissioner for Inland Revenue 1986 (1) SA 8 (A) H at 33E-G

Fletcher and Fletcher v Bulawayo Waterworks Co Ltd 1915 AD 636 at 646-8

Hansen & Latelle v Crafford (1909) 26 SC 426

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