REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
							Case No:  13150/2016

Reportable: No  
Of Interest To Other Judges:  No

………………		……………………
Date		 SIGNATURE

                                               
	
In the matter between:

BRADLEY SCOTT REAL ESTATE CC
(Registration Number: 2007/14851223)	Applicant	

and

SERENGETI EXCLUSIVE ESTATE HOME
OWNERS ASSOCIATION NPC
(Registration Number:  2004/028930/08)

RAUTENBACH, ELSJE N.O.
(In her capacity as joint liquidator of the
liquidated estate of  DE FACTO INVESTMENTS
245 (PTY) LTD (No. G1443/10) )

MAKHESE, EPHRAIM N.O.
(In her capacity as joint liquidator of the	First Respondent 

Second Respondent

Third Respondent 	
liquidated estate of  DEFACTO INVESTMENTS 245 (PTY) LTD
(No G1443/10

JUDGMENT

DIEDERICKS A.J.

[1]	In this application the Applicant seeks the following relief, that:

1.	It is declared that the amounts owed by the Second and Third Respondents, in their capacities as the joint liquidators of DE FACTO INVESTMENTS 256 (PTY) LIMITED, to the First Respondent in respect of levies for erven 145,151, 169, 170 and 172 Serengeti Estate, Ruimsig Extension 46 Township (“the properties”), is R198,600.00, comprising R39,720.00 per property;

2.	First Respondent is ordered to issue a levy clearance certificate as contemplated in the properties’ title deeds and in respect of the property to the Applicant and/or the Second or Third Respondents within 5 (five) days of payment of the amount referred to in paragraph 1 above to Cross & Farquharson Attorneys;

3.	The First Respondent is ordered to pay the costs of this application if opposed.

[2]	The First Respondent, albeit late, filed an opposing affidavit as well as a condonation application in respect of its late filing of the opposing affidavit. 

THE FACTS:

[3]	The salient facts to this application are that on 15th of April 2015 the Second and Third Respondents (“the liquidators”), being duly authorised by resolution taken at a second meeting of creditors, of DE FACTO INVESTMENTS (PTY) LIMITED (IN LIQUIDATION) (“DE FACTO”), sold 5 (five) erven, i.e. Erven 145, 151, 169, 170 and 172 Serengeti Ruimsig Extension 46 Township (“the properties”) to the Applicant.

[4]	The title deeds of all 5 (five) erven forms part of the papers filed by Applicant.

[5]	According to the title deeds, the properties were transferred to DE FACTO on 18/07/2008 (Erf 145), 11/10/2006 (Erf 151), 2/07/2008 (Erf 169), 02/07/2008 (Erf 170) and on 02/07/2008 (Erf 172) respectively.  

[6]	In clause C of every title deed referred to above, the following conditions are imposed on the owner (DE FACTO):

“1.	Immediately on becoming the registered owner of the property, the owner will become a member of the Serengeti Exclusive Estate Home Owners Association, Registration Number 2004/028930/08 (Section 21 company) (an association incorporated under Section 1) and will be bound by the memorandum and articles of association of the association.

2.	As long as he is the registered owner of the property, he will remain a member of the association and be bound by its memorandum and articles of association. 

3.	The owner of the erf, or any subdivision thereof, or of any sectional title unit erected thereon shall not be entitled to transfer the erf, or any portion thereof, or any unit, without prior written confirmation of the association that all amounts due tot he association by the owner have been paid.”

[7]	It is common cause between the parties that in terms of the purchase and sale agreements, the obligation to pay the clearance figures falls to the Applicant.  

[8]	The Applicant consequently sought clearance figures from the managing agent of the First Respondent in or during July 2015.  On Applicant’s own version, the payment of the home owners association’s (“HOA”) levy clearance was necessary before the HOA would certify that all amounts due to it by DE FACTO had been settled and transfer could be passed.

[9]	The HOA thereafter favoured Applicant’s conveyancer with the following amounts to be outstanding, due, owing and payable:

[9.1]	R597,779.40 in respect of Erf 145;

[9.2]	R609,750.33 in respect of Erf 150;

[9.3]	R598,302.67 in respect of Erf 169;

[9.4]	R609,560.36 in respect of Erf 170; and

[9.5]	R609,767.50 in respect of Erf 172.

	The total amount owing to the HOA, manually calculated, was then R3,025,160.26 in respect of all 5 (five) erven.

[10]	The Applicant points out that amounts allegedly due to the HOA span a period commencing before 1st of April 2011 and 1 January 2016.

[11]	Applicant further points out that certain penalties for non-development of the properties were included in the settlement figures.  These penalties were apparently applicable according to a resolution of the HOA resolved on 8th of September 2010, which reads as follows:

	“There are currently fourteen stands on auction, the new rule do not apply to these stands and open lot penalties will be levied on them from 1 October 2010 at R5,000.00  per month.  The new rule regarding vacant stands is that existing owners have three years to break ground.  Any new owners going forward from today’s date will have twelve months to break ground.  The penalty for not adhering to these rules will be an additional R5,000.00 (five thousand rands) [sic] per month until building has commenced on that stand.  The OTP for new sales must include this clause as well as stands on auction.”

[12]	The Applicant avers, as mentioned above, that levies (and penalties) included in the HOA calculations includes levies and penalties as far back as 1st of April 2011, to which levies and/or penalties the HOA is not entitled to, due to the provisions of Section 11(d) of the Prescription Act, 1969, Act 68 of 1969, which reads as follows:

“11(d)	Save where an act of parliament provides otherwise, [the prescription period – my insertion] is three years in respect of any other debt.”	

[13]	It is on this basis that Applicant made its calculations as set out in the notice of motion referred to supra.

[14]	It was argued on behalf of Applicant that it is of importance to identify First Respondent’s “right” in terms of the contents of clause  C(3) of the title deed.  

[15]	It was maintained on behalf of Applicant that whilst this provision is an embargo provision, its intention is none other than to secure a debt.  If so, any monies owed to the HOA for a period of longer than three years has become prescribed and can therefore no longer be due and payable.

[16]	Applicant’s argument, as I understand it, is that the First Respondent’s “right” is not a “real” right, but a “personal claim” right, i.e. a right in respect of a debt, which prescribes after three years in terms of Section 11(d) of the Prescription Act, 1969.

[17]	Respondent contends that the provisions of (c)(3) of the title deed is an embargo provision, and therefore a real right that protects the creditor’s claim “against the whole world”, as it was put by my sister Mashile (A.J.) in her unreported judgment of Cohen N.O. v. Kyalami Estate Home Owners Association & Others (12/11300) [2013], which view (on the relevant topic) was not overturned by the Supreme Court of Appeal in Monica Gezina Cohen N.O. v. Kyalami Estate Home Owners Association & Others (499/2013).

[18]	In order to determine whether a right or condition in respect of land is a real right, two requirements must be met:

(a)	The intention of the person who creates the right must be to bind not only the present owner of the land, but also successors in title;  and

(b)	The nature of the right or cancellation must be such that its registration results in a “subtraction from dominium” of the land against which it is registered.  

See:	William Waters Home Owners Association (Pty) Ltd v.Koka (N.O.) (Association of Residential Communities CC amici curiae), 2015(5) SA 304 (SCA) par. 16 on p. 310 (also footnote 11).

[19]	To my mind, clause C(3) in the title deed in casu is in all fours with the test for an embargo provision as set out in the Williams Waters and other decisions referred to above.

[20]	The First Respondent, through the embargo provision, therefore has a real right in respect of levies and penalties owed to it and along with this it has a choice to either claim from the insolvent estate or pursue what it owed to it from the owner or its successor in title.  

[21]	I am therefore not persuaded that Applicant’s approach in calculating the amount of levies by it to First Respondent is correct.

	The right that First Respondent has in terms of the embargo provision is a right to veto in terms of the embargo which restricts the owners ius disponendi.

	It is this right of the First Respondent that is at stake here, which is a real right, and Applicant has no right to curtail First Respondent’s real right by means of a declaratory order wherein the method of calculation of the levies due, as applied by Applicant, should prevail.

[22]	Under the circumstances I do not deem it necessary to deal with the First Respondent’s condonation application in detail, save to grant condonation and to accept First Respondent’s late filing of its Answering Affidavit.

[23]	Under the circumstances the following order is made:

	“Applicant’s application is dismissed with costs.”

_________________________________________________
F  DIEDERRICKS 
ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG

Counsel for the Applicant:				Adv A W Pullinger
							011 290 4000
							082 560 6920
							pullinger@counsel.co.za
Instructed by:					Bruno Simao Inc
							011 234 0831
							Bruno@brunosimaolaw.co.za

Counsel for the Respondent:			J W Steyn
							083 266 5005
Instructed by:					Bento Incorporated
							011 475 4095
							johan@bento.co.za

Date of Hearing:					2 November 2016
Date of Judgment:					9 February 2017