JUDGMENT

In the matter between:
THE STANDARD BANK OF 
SOUTH AFRICA LIMITED					Applicant

and

Introduction

[2] Around the time of the registration of the first of the mortgage bonds on 2 July 2004, Wessels concluded a JBCC minor works agreement with first respondent in terms of which first respondent agreed to complete substantial alterations to the home situated on Wessels' property ("the JBCC contract"). In terms of 2.5 and 2.6 of that contract it was expressly stated that first respondent would retain a right of retention over the building works as security for payment under the contract unless a JBCC payment guarantee was provided by Wessels within 14 days of the conclusion of the contract. It appears to be common cause that no such payment guarantee was ever provided.

1.1. R123 561.07 owing to first respondent for the building work undertaken to Wessels' home under the JBCC contract;

R111 282,22 in respect of interest that has accrued on overdue amounts owing under   the JBCC contract between October 2004 and December 2006.

1.     There is in his view no authority in South African law which condones the common law substitution of lien-holders rights of retention at  the   instance  of  anyone   other than  the registered owner of the property concerned.

2. The applicant has no contractual entitlement to insist that the possession of the property be relinquished and its rights under the mortgage bonds be ranked below those of the first respondent.

4. The substitution of a right to retention conferred by the express terms of the contract cannot under any circumstances be substituted by application of the common law discretion to order the provision of alternative security. First respondent's JBCC contract expressly confers upon it an express contractual right to retain possession of the property until it has received full payment.

"In every one of the above long line of cases relied upon by counsel for applicant, the question was whether the Court should, in its discretion, release - against the provision of adequate security – the property in issue from a right of retention which had arisen over the property by operation of law.   With one possible exception...the applicant in all these cases was the owner of the property in issue.
In the present case, if - as was submitted by counsel   for  applicant,   but   concerning   which express no opinion - it would be correct that in the events that have happened the bills of lading in the hands of respondent constitute no more than a security equivalent to a right of retention over the flint clay, it is nevertheless indisputable that such security derives not from operation of law but from the very agreement between the parties whereunder the bills of lading were made out in the name of and

rights of a pledgor, does not appear to me to relate to the subject of the present enquiry which , as already indicated, is specifically dealt with  by Van Leeuwen in 1.4.37,13...

In terms of the contract between the parties the bills of lading were, as explained at the outset of this  judgment, to be handed over by the respondent to applicant against payment by the latter of the purchase price in full. In short, this was a contractual stipulation. The general rule of course is that in a contract of purchase and sale the party who seeks to enforce performance must first fulfil or be ready and able to fulfil his own contractual obligations...To accede to applicant's present demand for delivery of the bills of lading, not against payment in full but against partial payment plus security, would be to run directly counter to the express agreement of the parties and in effect to make a new contract for them".

[9]    In   the   present   case   the   relevant   passages   of  the

[11] Insofar as it was relevant to the current application, Mr van Helden submitted that the applicant's rights in terms of :he mortgage bond registered over the property were limited to the following. In the event of a default in the payment of the monthly instalments owing under the bond the applicant was entitled to claim the full outstanding balance and to take legal steps for a court order declaring the property executable. Once it has successfully obtained an order declaring the property to be executable, the applicant was entitled to demand that Wessels vacate the property if requested to do so by applicant. In his view it was immediately apparent that neither of these rights afforded the applicant an entitlement to the relief which had been sought in the current application.    In particular, there had been no order obtained declaring the property executable and, even if such an order had been obtained, first respondent's retention of its possession of the property would not prevent a sale in execution and would accordingly   not  frustrate   applicant's   rights   under  the mortgage bond to execute against the property.

should not be left out of his property unreasonably and, on the other hand, should not be given possession if his object is, after getting possession, to delay the claimant's recovery of expenses".

[17]   In the present case the following pro-pointers exist in favour of an exercise of discretion by this Court in favour of the applicant:

can only discharge its obligation if it sells the property, interest charges against the property will continue to escalate to the detriment of the   estate   and,   indeed,   all   the   parties concerned.

[19] In the exercise of this discretion, the doctrine of proportionality always offers guidance. When the Court sets out the pro-pointers against the counter-pointers, it is manifest that this is a case which calls for judicial intervention. The balance is therefore in favour of the applicant. Accordingly this Court will exercise its discretion to make the following order.

[20] I must raise the question of costs which was hotly disputed. Given the order that I am about to make is one not dissimilar from an offer which was made by the attorney for applicants some while ago (19 December 2003) there appears to be no reason why costs should not follow the result.   Had that offer been accepted this case would never have reached court, interest charges would not have escalated and the matter could have been settled.

The following order is therefore made:

2.To the extent that the first respondent's claim outranks applicant's claim, that applicant jointly and severally with second respondent guarantees payment of the first respondent'sclaim   as   may   be   proved   in   the   action contemplated in paragraph 4 below.

4.1 Outranks that of the applicant; and/or

4.2. enjoys any preference over the claims of any other creditors.

IN THE HIGH COURT OF SOUTH AFRICA (CAPE OF GOOD HOPE PROVINCIAL DIVISION)

Reportable

Case No: 1416/2007

In the matter between:

and

				
CORAM						D M DAVIS J

JUDGMENT BY					DAVIS J
FOR THE APPLICANT				ADV. F S G SIEVERS
INSTRUCTED BY					WILLIAM INGLIS ATT.
FOR THE RESPONDENT S				ADV. R VAN HELDEN
INSTRUCTED BY					MAURICE PHILLIPS 									WEISENBERG

DATE OF HEARINGS 				11 FEBRUARY 2008
DATE OF JUDGMENT				18 FEBRUARY 2008