IN THE HIGH COURT OF SOUTH AFRICA (WESTERN CAPE HIGH COURT, CAPE TOWN)

Case No. 7462/2009

In the matter between:

and

For the Applicant: 	Adv M Ipser

As instructed by:	Norton Rose 
(Ref: M Fredericks)

For the First - Third Defendant: 	Adv M Bartman 

As Instructed by:	Spencer Pitman Inc 
(Ref: A Pitman)

For the Fourth Respondent:	n/a

For the Fifth Respondent: 	Adv W Roos 

As instructed by:		Velile Tinto
(Ref: L Swart/D Swanepoel)

For the Sixth Respondent:	n/a

THE REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA 
WESTERN CAPE HIGH COURT, CAPE TOWN

CASE NO:   7462/2009

in the matter between:

versus

JUDGEMENT: 29 MARCH 2012

BOZALEK J:

[1] On 27 January 2009 a residential property situated at 97 Waie Street Cape Town was sold in execution. The applicant, who has at all material times resided at the property, now appiies for rescission of the order granted by the Registrar of this Court on 25 June 2008 declaring the immovable property in question ("the property") to be specially executable.

[2] First to third respondents are the trustees of the Wizard Investment Trust, the purchaser of the property pursuant to the sale in execution. The fourth respondent is the applicant's former husband and the party against whom the

default judgment, to which was coupled the order for special executability of the property, was granted. The fifth respondent is a large scale bond financier and the judgment creditor in the sale of execution of the property whilst the sixth respondent is the Registrar of Deeds.

[31 The first to third and fifth respondents oppose the rescission of the order of special executability and the further extensive relief sought by the applicant which is the following:

3. setting aside the sale in execution of the immovable property to the Wizard Investment Trust ...;
4. declaring applicant to have been the sole owner of the immovable property since 14 May 2O03;
5. directing sixth respondent to endorse the title deeds of the immovable property to reflect that fact that applicant is the sole owner of the immovable property and has been ... since 14 May 2003;
6. declaring that the bond registered over the immovable property on 24 December2002 ...isinvalid;
7. directing the sixth respondent to cancel the aforesaid bond as registered against the title deed to the immovable property;
8,9& 10. declaring that four bonds registered against the immovable property during 2005 and 2006 are not binding upon the applicant and are cancelled and directing the sixth respondent to cancel same;
11. directing fourth respondent to take all necessary steps to transfer the immovable property into the name of the applicant;
12. authorising the deputy sheriff to take the steps referred to in 11 above in the event that the fourth respondent fails to do so;
13. directing that the costs incurred in respect of the transfer shall be borne by the fourth respondent;
14. costs of suit.

[5]     The background to the matter is the following:
5.1. the fourth respondent purchased the property from the municipality of Cape Town in November 1987. At that stage he was married to his first wife, Najaciah Abrahams, and she was duly noted on the title deeds as co-owner;
5.2. when the fourth respondent and Najadah Abrahams were divorced in 1993 he purchased her half share of the immovable property and an endorsement in terms of s45 bis (1)(a) of the Deeds Registry Act, 47 of 1937 ("the Act") was effected stipulating that the fourth respondent was entitled to deal with the property;
5.3. the applicant was married to the fourth respondent by muslim law on 7 October 1992 and by civil rights, in community of property, on 7 June 1993. It is common cause that the effect of the civil marriage was to vest a half share interest in the property in favour of the applicant;
5.4. the applicant's marriage broke down and during the course of 1999 the fourth respondent began to co-habit with another woman whom he married by musiim law in 1 999. According to the applicant, after fourth respondent remarried he became even more secretive about his financial affairs and although she knew that the property was bonded she was ignorant of the terms or amount of the bond.

That, save and expert (sic) as herein provided to the contrary the parties shall respectively retain as their own free and unfettered property all or any of the assets in whatsoever nature or description at present in their possession or under their control respectively."

[7] The fifth respondent registered a bond over the property on 24 December 2002 as security for a loan in an amount of R210 000 which it made to the fourth respondent. It is common cause that the fourth respondent advised the fifth respondent's representative that he was married under muslim law and the bond was granted on that basis without any communication between the fifth respondent and the applicant.

[8] It is also common cause that during 2005 and 2006, notwithstanding the divorce order, the fifth respondent registered four further bonds over the property as security for a series of loans made to the fourth respondent totalling approximately R800 000.

[10] During 2006 the applicant made enquiries with the fifth respondent regarding the bonds registered over the property, advising them that she had consented to neither the 2002 bond nor the subsequent bonds.

[11] On 25 June 2008 the fifth respondent took default judgment granted by the Registrar of this Court against the fourth respondent in the amount of R984 000 and at the same time an order was made declaring the property specially executable.

[12] Some two and a half months prior to default judgment being taken an advocate acting on behalf of the applicant wrote to the fifth respondent's attorneys advising them that the applicant and fourth respondent had been married in community of property, that she remained co-owner of the property and that she had not consented to mortgage bonds being registered over the property. Some two months after default judgment was granted the applicant engaged attorneys who wrote to the fifth respondent care of their legal representatives advising them that she had been made aware that steps were being taken to sell the property, giving details of her interest in the property and seeking certain information from the fifth respondent.

[13] Notwithstanding these efforts on the part of the applicant the sale in execution went ahead on 27 January 2009. On 17 March 2009 the applicant launched an urgent application to interdict the passing of transfer of the property to the Wizard investment Trust and an order was made on 17 April 2009 interdicting the passing of transfer pending the outcome of the present application for rescission of judgment and further relief.

The applicant seeks, in the first place, rescission of the order made by the Registrar of this Court declaring the property specially executable. She relies on the provisions of Rule 42(1) which provide for rescission where an order or judgment is erroneously sought or erroneously granted in the absence of any party affected thereby.

[15] The applicant's case is that as the owner of the property, either as the owner of an undivided half share or as full owner thereof, albeit not the registered owner, and a long-time occupant of the property which had been her home for years, she was entitled to be heard before an order of special executability was made.

[17] There can be little doubt that had a court, or in the present case the Registrar, been aware that the beneficial owner of the property in question was the applicant, that the fourth respondent was in breach of the terms of the divorce order in failing to maintain payments in respect of the original mortgage bond, that the bulk of the mortgage bonds registered over the property had been registered pursuant to loans concluded by the fourth respondent at a time when he was no longer the owner of the property (notwithstanding that the title deeds continued to reflect him as sole owner) and that the property was the home of the applicant and her children, the order for special executability wouid, in all probability, not have been granted.

[18] It was contended on behalf of the first to third respondents that, in the exercise of its discretion, the Court should refuse to grant rescission because of the applicant's inordinate delay in bringing the application.

The first tranche of the consequential relief sought by the applicant pursuant to the rescission of the order of special executability is the setting aside of the warrant of execution issued in respect of the property as well as the sale in execution of the property to first to third respondents.

The applicant initially sought all the relief claimed in the notice of motion. This entailed a challenge to the validity of the mortgage bonds registered over the property both before and after the parties were divorced. The rationale behind the challenge to the pre-divorce mortgage bond was that the applicant, as an owner of a undivided half share of the property by virtue of her marriage in community of property, had not consented to the encumbering of the property through the registration of that bond and, in terms of s15(9)(a) of the Matrimonial Property Act, 88 of 1984, could be not deemed to have consented thereto.

[27] The difficulty which the applicant encountered in challenging the validity of the pre-divorce bond was that the terms of the divorce order itself make it clear that the applicant had, by then at ieast, become aware of the fact that the property was encumbered by a mortgage bond. The divorce order provided that she would only be entitled to take transfer of the property once the debt underlying the mortgage bond had been discharged by the fourth respondent. It was common cause that the fourth respondent has not discharged the indebtedness under that particular bond, the outstanding balance being somewhere in excess of R200 000. it was put to counsel that the applicant could not logically lay claim to the property unencumbered by any mortgage bond where, through the divorce order and in effect by agreement, she had acquired dominium over the property but subject to any mortgage bond then in existence. Faced with this difficulty, applicant's counsel abandoned the relief sought impugning the validity of the pre-divorce bond and, as a consequence thereof, any claim to immediate transfer of the immovable property into her name or ancillary relief. Accordingly the applicant ultimately did not proceed with the relief claimed under prayers 6, 7, 11, 12 and 13.

Under prayers 4 and 5 the applicant seeks a declaration that she has been the sole owner of the immovable property since 14 May 2003 and directing the sixth respondent to endorse the title deeds accordingly.

[29] It is common cause that the effect of the marriage in community of property between the applicant and fourth respondent was to vest an interest in a half share in the property in favour of the applicant. The terms of the divorce order were that a division of the joint estate was ordered and in particular it was stipulated that the applicant would become the sole owner of the property albeit subject to transfer only being effected to her once the property was free of the existing encumbrance viz the mortgage bond registered over the property by the fourth respondent in 2002.

authorities, both the proprietary consequences of a marriage in community of
property and the dissolution of such a marriage. The following passage from
Wiggill's case is instructive:

[33] On behalf of the fifth respondent Mr Roos submitted that the divorce order relating to the parties is evidence of nothing more than the applicant having a personal right or claim against the fourth respondent in respect of acquiring ownership of the property or, more specifically, for payment by him of the bond obligations whereupon she could then claim registration of transfer of the property into her name.

[36] A declaration that the bonds are not binding on the applicant as sought under prayer 8 is, strictly speaking, misplaced relief since bonds are registered against immovable property alone. Should the applicant be granted the relief sought in prayers 9 and 10, namely, the cancellation of the bonds registered against the immovable property together with an order directing the sixth respondent to cancel the bonds, she will in effect gain the relief which she seeks.

[37] The applicant's case in this regard is straightforward, namely, that upon her divorce on 14 May 2003 she acquired dominium over the property, in those circumstances the fourth respondent thereafter had no authority to encumber the property. Accordingly, the fifth respondent has no secured claim in respect of the property pursuant to the new bonds registered over it and the applicant is entitled to their cancellation.

[39] Adopting this interpretation, and no different meaning was contended for by any party, it is clear that post-divorce, the fourth respondent had no dominium over the property and was principally obliged to service the bond and settle the outstanding indebtedness thereon. Although the title deeds reflected the fourth respondent as the owner of the property this was incorrect and misleading and he had no authority to further encumber the property.

[40] In arguing for the validity of the post-divorce bonds it was contended on behalf of the fifth respondent that, based on the title deeds and fifth respondents acceptance at face value of the fourth respondent's statement that he was the owner of the property and that he was married only by muslim rights, the further loans advanced and secured by the additional four mortgage bonds were incurred in good faith and without any negligence on its part. It was further argued that the fifth respondent did not know until at least 2008 that the applicant laid claim to ownership in the property and she was negligent in not effecting an appropriate endorsement to the title deeds, thereby notifying the public at large in that she had an interest in the property.

[41] in this regard it must be noted that in terms of s45 bis of the Act where an immovable property formed an asset in the joint estate of spouses who have been divorced and one of them has lawfully acquired the share of his or her former spouse in the property, the Registrar of Deeds may on written application by the spouse concerned endorse on the title deed of the property that such spouse is entitled to deal with such property. Thereupon such spouse shall be entitled to deal with such property as if he or she has taken formal transfer into his or her name of the share of former spouse in the property.

[44] It was contended on behalf of the first to third respondents that the applicant was estopped from reiving on her ownership of the property and her ignorance of

[46]   Although an estoppel may be created by negligence it would appear that the

[47] Referring to the circumstances of the case before him the learned Chief Justice proceeded:

[48] Similar considerations are at play in the present matter. That the fourth respondent loaned large sums of money on the strength of the security offered by the property is primarily attributable to a misrepresentation by the fourth respondent. He represented that he was the true and exclusive owner of the property and entitled to encumber it with further mortgage bonds when in truth he knew that this was not the case and at the very least he required the applicant's consent to any such step. It is so that the fifth respondent was presumably encouraged or strengthened in its view by reason of the titie deeds to the property indicating that the fourth respondent was its sole owner. However, in my view, the primary representation was not the applicant's failure to have her interest endorsed on the title deeds but the fourth respondents fraudulent misrepresentation that he was the sole owner of the property and entitled to encumber same.

[50] In the circumstances I hold that the defence of estoppel put up by the respondents cannot succeed and that the applicant is entitled to the relief sought in prayers 9 and 10 (prayer 8 being superfluous), namely, a declaration that the post-divorce bonds are cancelled and directing the sixth respondent to cancel the bonds as registered against the title deeds to the property.

COSTS
[51] The applicant seeks the costs of this application as well as the costs of the anterior urgent application which interdicted the transfer of the property following the sale in execution. Those costs were reserved for the determination of the trial court in this application. The applicant sought all costs on an attorney/client basis but I can see no warrant for a punitive costs order not least because the various respondents who actively opposed this application were fully entitled to do so.
[52]   In the result the following order is made:

2. Setting aside the warrant of execution issued in respect of the immovabie property under case number 12689/07;
3. Setting aside the sale in execution of the immovable property to the Wizard Investment Trust on 27 January 2009;
4. Declaring applicant to have been the sole owner of the immovabie property since 14 May 2003;
5. Directing sixth respondent to endorse the title deeds of the immovabie property to reflect the fact that applicant is the sole owner of the immovabie property and has been the sole owner thereof since 14 May 2003;
6. Directing the sixth respondent (the Registrar of Deeds) to cancel the bonds numbered B48673/2005; B110763/2005; B23862/2006 and B87088/2006 as registered against the title deeds to the immovabie property;
7. Directing the first to fifth respondents to pay the applicant's costs in the application, which costs shall include the costs incurred in respect of the interlocutory application brought under case number 5419/09, jointly and severally, the one paying the others to be absolved.

BOZALEK, J
JUDGE OF THE HIGH COURT