IN THE HIGH COURT OF SWAZILAND
HELD AT MBABANE CASE NO. 2217/2010
In the matter between:
SOLOMOM MALWANE APPLICANT
TRUE REALITY COMPANY (PTY) LTD 1ST RESPONDENT
MUNICIPAL COUNCIL OF MANZINI 2ND RESPONDENT
REGISTRAR OF DEEDS 3RD RESPONDENT
THE ATTORNEY GENERAL 4TH RESPONDENT
Coram Ota J.
For the Applicant: Mr. J. Rodriques
For the 1st Respondent: Mr. P.M. Shilubane
For the 2nd Respondent: Mr. S.V. Mdladla
In this application the Applicant claims the following reliefs
That the sale in execution of immovable property to wit, Lot 632 situate at Manzini Township Extension 7, in the Manzini District, which was conducted pursuant to warrant of execution immovables under Manzini Magistrate Court Case No. 450/2007 be declared null and void
That the transfer of immovable property to wit lot 632 situate at Manzini Township, Extension 7, in the Manzini District by the 3rd Respondent to 1st Respondent, under Deed of Transfer No. M4/2010, be and is hereby cancelled.
That the 3rd Respondent be and is hereby directed to effect the re-registration of the immovable property to wit, Lot 632 situate in Manzini Township, Extension 7 in the Manzini District, into the name of the Applicant forthwith.
Costs of application
Further and / or alternative relief.
The facts upon which the Applicant contends this application and as can be deciphered from the founding affidavit are as follows:-
That the Applicant was the registered owner of the property which is Lot 632, situate at Manzini Township, Extension 7, held under crown Grant No. 68 of 1980 (hereinafter called the Suitland) as is evidenced by annexure A.
That the Suitland consisted of a three bedroom house and a cottage. That in or about 2004, the applicant fell into arrears in payment of rates for the suitland to the second Respondent, the Municipal Council of Manzini, (hereinafter called the council). That at this material point in time, the Council was represented by Mthembu Mabuza Attorneys, and that the Applicant dealt with this firm of Attorneys regarding the settlement of the rates, and it was agreed that the outstanding rates be settled by monthly installmental payments of E700. Applicant averred that he could not recall the exact amount of his indebtedness at that time. That this arrangement with the said firm of Attorneys persisted until round about 2007, when the Council changed it’s Attorneys to S. V. Mdladla and Associates. That the applicant made similar arrangements with S. V. Mdladla and Associates, and it was agreed that the rates would be settled by monthly installments with them. That pursuant to the instalmental payment arrangements, the Applicant paid a total of E11, 800-00 to Mthembu Mabuza and Attorneys, as well as, the sum of E3,000-00 to Mdladla Attorneys, totaling the sum of E15, 600-00 in settlement of his indebteness to the Council, as is evidenced by annexures B1 to B6 respectively.
That subsequent to the arrangement with Mdladla Attorneys, the Applicant fell gravely ill. He had a stroke and suffered blindness and was hospitalized, thus unable to tend to his affairs. That this state of affairs greatly affected his income, to the extent that he was unable to meet his financial commitments including the rates to the Council.
That on or about the 29th of March 2010, the Applicant received a call from his tenants ka-Zakhali Pre-School, who have been tenants in the suitland since about 1999. The call came from the Administrative Director of the said Pre-School, one Mr Pearson Chunga, who enquired from Applicant whether he sold the suitland. That Mr Pearson Chunga informed the Applicant that he was approached by a certain lady called Sarah, from the first Respondent company, who told him, that 1st Respondent had purchased the property and that the rentals for the suitland was now payable to the 1st Respondent. That Applicant then approached Mdladla Attorneys who confirmed that the suitland was sold at a public auction to 1st Respondent under Case No. 450/2007, in the Manzini Magistrates Court, to settle Applicants arrears rates to the Council and that the suitland was in the process of being transferred to the 1st Respondent.
That pursuant to this development, the Applicant’s Attorney Mr Rodriques, conducted a search at the Manzini Magistrates Court, where it was discovered that Case No. 450/2007, is a matter involving the Council and one Emasime Investments on payment of rates, as is evidenced by annexures C1 to C4 respectively. That a further search at the Manzini Magistrates Courts registry revealed that the Applicant was sued by the Council for rates under Case No. 1233/2007, and that the files involving Case Numbers 1231 to 1238 at the Manzini Magistrates Court, within which group Case No. 1233 falls, had gone missing and could not be traced.
That the applicant’s Attorney Mr Rodriques then commenced proceedings by way of motion to stop the suitland from being transferred into the name of the 1st Respondent, as is evidenced by annexure D. That whilst attempting to effect service of this process on the Registrar of Deeds, Mr Rodriques was informed by one Mr T. C. Hlophe, an employee of the Registry of Deeds, that the suitland was already transferred to 1st Respondent. That Attorney Rodriques was given a copy of the new Deed of Transfer, Rates Clearance Certificate and writ of Execution, all evidencing that the suitland was transferred under Case No. 450/2007 to 1st Respondent, as is shown in annexures E1 to E3 respectively. That as a result of this development, the Applicant did not pursue the said application. Rather in compliance with Section 16 (1) (2) of the Local Government Act of 1969, which requires that the Council be afforded 30 days notice of legal proceedings, Mr Rodriques wrote to the Council and copied the letter to the 1st Respondent, intimating them of the impending litigation. That this fact is clearly borne out of annexure F.
That the Applicant was never served with any Court papers relating to Case No. 450/2007. That though Applicant may have been served with papers under Case No. 1233/2007, that he however did not receive any further Court papers pertaining to judgment, execution of movables or immovable property or any notification in respect thereof. That it is thus possible in the circumstances that judgment may not have been obtained against the Applicant under Case No 1233/2007.
That in the circumstances the sale and transfer of the suitland under Case No 450/2007 to 1st Respondent was unlawful, irregular and unprocedural. Therefore, the said transfer was illegal and ought to be cancelled. That Applicant is prejudiced by the said sale because the suitland with all its improvements has an estimated value of approximately E700, 000-00, whereas it was sold for E250, 000-00. That the suitland is the only life investment of the Applicant who is 67 years old.
It is on record that the 1st Respondent filed an Answering Affidavit to this application, in which it raised points in limine in paragraph 2 thereof, as follows:-
‘‘2.1 In limine, I am advised and accept that the application is totally defective because:-
The non joinder of the sheriff who sold the property and the bond holder of the property in question. A copy of the bond is annexed hereto marked TRC1
The Applicant has not placed sufficient evidence before the Court to enable the Court to cancel registration of the property in the name of the first Respondent in terms of Section 96 of Act No. 37/1968
The matter is not urgent because the Applicant has an adequate alternative remedy namely to sue the second Respondent for damages’’
The 1st Respondent also deposed facts on the merits of the application, to the effect that Applicant is not alleging that he was not indebted to the Council at the time of the auction sale. That before the sale by public auction took place it was advertised in the Government Gazette and the media as required by the Rating Act, 1969, as evidenced by annexures TRC2 and TRC3, copies of the advertisements in the Government Gazette and the Times of Swaziland respectively. That thereafter a writ of execution was issued pursuant to the judgment obtained against the Applicant on 23rd June 2008, as evidenced by annexure ‘‘ TRC 4’’. That 1st Respondent paid the sum of E57, 000-00 (annexure TRC 5) for the property, and that there was nothing illegal in the manner in which it bought the property. That even in the event of any irregularity, that the Applicant has a remedy to claim damages from the Council.
The 2nd Respondent i.e. the Council, also filed an Answering Affidavit to this application, which was sworn to by one Sidumo Mdladla, Attorney of record to the Council. This Affidavit I find it convenient to state at this juncture, was vociferously challenged by Mr Rodriques, on grounds of lack of authority and impropriety of the deponent, Mr Mdladla, who is also Attorney of record to the Council, to depose to said Affidavit. I wish to observe that I see no Law or rule of practice preventing Counsel from deposing to said Affidavit, and none is urged in these proceedings. I must however point out that the more desirable practice is for Counsel to desist from deposing to Affidavits on behalf of their clients. This is to prevent the very awkward and difficult situation created, if such Counsel is then required to tender oral evidence at any subsequent trial of the matter. I must also agree with Counsel for the Respondents, that Mr Mdladla did not require authority to depose to the said Affidavit. This is because it is trite learning that the deponent to an affidavit does not need anybody’s authority to depose to said affidavit. See J. K. Maseko and Company (Pty) Ltd V Lungile Dlamini Bahile Sibandze Case No. 3629/05. On these premises, I deem it expedient to countenance the said Affidavit filed on behalf of the 2nd Respondent.
Now in the said affidavit, the deponent conceded that Applicant entered into payment arrangement with Mdladla and Associates, after receiving a sworn and certified statement in terms of Section 32/2 of Act 4 of 1995. That the Applicant signed an Acknowledgment of Debt, therefore, the Applicant was well aware that this matter went to Court as shown by annexures A and B, contray to the allegation in his founding affidavit. That the Applicant paid the sum of E7, 200-00 and not E3, 000-00 to Mdladla and Associates, but he is not aware of any payments to Mthembu Mabuza Attorneys. The deponent conceded that Case Number 450/2007, was a matter between the Council and Emasime Investments. He however contended that the error of case allocation emanated from the Court and this has no impact on the procedure adopted thereafter. The deponent contended that the Court record under Case Number 1233/2007, has gone missing, under strange circumstances. That the Acknowledgement of debt was made the order of Court. That the wrong case number was inserted in the papers which were served on the Applicant and this is no basis for setting aside a sale which had been transferred to an innocent third party. That a warrant was first issued against the movable property of the Applicant, as is evidenced by the Affidavit of the messenger of Court which forms a part of these proceedings. That the sale was proper and it was advertised. That the Applicant has an alternative remedy which is to sue the Council for damages.
It is worthy of note that the 3rd and 4th Respondents did not participate in these proceedings.
When this matter served before me for argument on the 5th of April 2011, the Applicant was represented by Mr J Rodriques, the 1st Respondent by Mr Shilubane and the 2nd Respondent by Advocate P. Flynn.
I have carefully considered the totality of the Affidavits and heads of argument filed of record, as well as, Counsels oral submissions in Court, and I will be making references to such parts of them as I deem expedient in the course of this judgment. I however find it convenient at this juncture to first address the points in limine raised by the 1st Respondent. I have already demonstrated above that the 1st Respondent raised points in limine to this Application. The point on lack of urgency is overtaken by events. The point raised pursuant to Section 126 Deeds Registry Act will be addressed in dealing with the merits of this application. The only other point raised in limine is that taken on non joinder of Standard Bank Swaziland and the sheriff. I must say that the point taken on non-joinder of Standard Bank of Swaziland cannot vitiate these proceedings. This is because even though Standard Bank is the bond holder over the suitland, and even though there is no doubt that if the Bank had been joined it would have enabled the question of the Mortgage also to be considered in this matter, I however hold the view that it is not necessary to join the bank because the issues before the Court can be conveniently determined without the joinder. The bank played no role in the event that formed the basis of the issue presently before the Court. And in any case, the bank is aware of this matter and if they deemed it expedient should have applied to be joined, but they have failed to utilize the opportunity. My view here is buttressed by the fact that the question of the mortgage can be the subject of another action. Similarly, I hold the view that failure to join the sheriff should not also vitiate this action. There is no doubt that it would have been more desirable to join the sheriff. However, since both the purchaser i.e 1st Respondent and the sheriff are necessary parties to the action I hold the view that the action, can conveniently be determined if initiated by or against any of them I am thus convinced that the absence of the sheriff in this action has not disabled the determination of the issues before Court. I’ll thus dismiss this point of law, and proceed to the merits of this application.
Now, in casu, it is common cause that the suitland was sold to the 1st Respondent under Case No. 450/2007, at the Manzini Magistrates Court and that same has since been registered in the name of 1st Respondent. It is common cause that the said Case No. 450/2007 was a matter between the Council and one Emasime Investments and not against the Applicant. It is common cause that the case involving the Applicant and the Council was styled Case No. 1233/2007, at the Manzini Magistrate Court and that said case file had got missing. Also exhibited to these proceedings is an acknowledgement/settlement of debt signed by the Applicant, under Case No. 1233/2007, proposing terms of settlement of the debt owed the Council and covenanting that the said acknowledgment of debt be made the order of Court in the event of default of payment on the part of the Applicant.
It is by reason of the above facts that learned counsel for the Respondents maintain that the acknowledgement of debt was made an order of Court which led to execution against the suitland. That reference to Case No. 450/2007, instead of Case No. 1233/2007, in the execution processes, was a mistake or a formal defect, which is not sufficient to vitiate the enter sale, more so as registration of the suitland in the name of the 1st Respondent, the purchaser had already completed. That regard must also be had to the fact that the 1st Respondent is an innocent third party, thus is a bonafide purchaser for value without notice. Therefore, the Application should be dismissed and the Applicant should rather pursue his redress by way of damages against the Council, since he did not suffer any injustice by reason of the execution. For support learned counsel urged the provisions of Section 96 of Deeds Registration Act No. 37/1968 as amended, as read, with Section 7 of the said Act, which states as follows:-
‘‘ No act in connection with a registration in the Deeds Office shall be invalidated by a formal defect, whether such defect occurs in a deed passed or registered, or in a document upon the authority of which the deed has been passed or registered or which is required to be produced in connection with the passing or registration of the deed, unless a substantial injustice has by that act been done which in the opinion of the Court cannot be remedied by an order of the Court’’.
The question here is whether the sale in execution pursuant to Case No. 450/2007 is a formal defect? If the sale in execution under the said case number was a formal defect, then did the Applicant suffer any injustice by reason of the sale in execution leading to the registration of the suitland in the name of the 1st Respondent?
Now, there is no evidence whatsoever showing that there was any judgment of the Court pursuant to Case No. 1233/2007, under which the Applicant was sued by the Council, declaring the suitland executable to warrant the sale in execution. Even though advocate Flynn strenuously argued that the acknowledgment of debt amounts to a judgment itself, this line of argument clearly derogates from his earlier stance and that of the Council in it’s answering Affidavit, that the acknowledgment of debt was made an order of Court, following breach of its terms of payment by the Applicant. Besides, it is the practice that such a document acknowledging debt in the event of default on the part of the maker, is produced in Court and formally made an order of Court to give it force of life. There is no evidence that there exists such a judgment or any other form of judicial decree pursuant to Case No. 1233/2007.
Furthermore, even though Advocate Flynn contends that the presence of the Nolla Bona return by the messenger of the Court, regarding the movables of the Applicant under Case No. 1233/2007, is evidence that a judgment did exist in that case, I am however not impressed by this line of argument , in the absence of the said judgment and also in the absence of the warrant of execution against the movables of the Applicant, from which the Nolla Bona return allegedly emanated. Also not loosing sight of the fact that the sale in execution of the suitland finally took place under Case No. 450/2007, as opposed to Case No. 1233/2007, which appears in the alleged Nolla Bona return for the movables. All these facts to my mind make it imperative that a judgment or a judicial decree, declaring the suitland executable, pursuant to Case No. 1233/2007 be produced in these proceedings.
It is worthy of note that later in argument, Advocate Flynn in another attempt to show that a judgment did exist under Case No. 1233/2007, made a wild proposition, to the effect that annexure A, which appears on page 110 of the book of pleadings is a judgment under The Rating Act, against the Applicant with respect to the arrears rates owing to the Council.
Let me say straight away here, but with respect, that I cannot countenance this proposition. I say this because all that annexure A constitutes is a summons by the Council against the Applicant, issued under the hand of the Clerk of the Council, regarding the arrears rates owed by the Applicant. There is no fact showing that pursuant to annexure A, that judgment was entered by the Clerk of Court in the record of the Court in favour of the Council against the Applicant, as is required by Section 32 (2) of the Rating Act 1885, which sets forth the proceedings for the recovery of rates, in the following words:-
‘‘The proceedings for the recovery of the rates shall be in accordance with the following provisions:-
The local authority file with the Clerk of Court a statement certified by the City Treasurer, on oath setting forth the amount of rates payable by the owner.
A copy of that statement shall be posted by the City Treasurer to the owner on the same day as the statement is filed with the Clerk of Court.
The statement referred to in paragraph (a) and (b) shall contain a copy of the provision of this subsection and Section 29, 30 and 31.
Upon receipt of the statement the Clerk of Court shall enter judgment in the record of Court in favour of the local authority against the owner’’.
It is incontrovertible that annexure A is tantamount to the certified statement referred to in (a) above, and I so hold.
It is obvious from the facts stated that there is no judgment or judicial decree under Case No. 1233/2007, declaring the suitland executable evident in these proceedings, Mr Rodriques mounted a search for such at the Manzini Magistrate Court but found none. Case file No. 1233/2007 under which the Respondents allege the judgment was entered has gone missing. The Council itself failed to produce any judicial decree to this effect.
Since there is no judgment or judicial decree under Case No. 1233/2007, declaring the suitland executable, tendered in these proceedings, the entreaties of the Respondents for the Court to hold that such a judgment existed in the circumstances of this case, to my mind, tantamounts to an invitation to the Court to embark on a voyage into the realm of speculation. I refuse to be enticed into such an adventure.
As the case lies, there may have been a sale in this case, which sale in my view was illegal and invalid because it was conducted on the basis of no judgment. This is because the judgment in respect of which the sale was carried out, which is a judgment under Case Number 450/2007, is in respect of another judgment debtor, Emasime Investments. This judgment appears on page 40 of the book of pleadings. The trite principle of law, one of hallowed and universal application, is that the sale of a property in execution of the judgment of the Court must be in respect of the property of the judgment debtor. If the sale is later found not to be in respect of the property of the judgment debtor it will be set aside. There is no doubt that the law also dictates that movables sold by judicial decree (ex decreto indicis) cannot be vindicated, nor can immovables sold in the same way, after transfer has been passed, except the purchaser was malafide. The circumstances of this case are however completely different from that anticipated by law, in that the suitland was not sold by judicial decree as I have hereinbefore demonstrated. The suitland was not the subject matter of Case No. 450/2007 under which it was sold. This fact is not a mere defect as the Respondents want the Court to find, but rather goes to the root of the entire sale. I am bound also to point out here that the fact that the sale was advertised both in the Government Gazette and the Times of Swaziland, as is urged by the Respondents, does not vindicate the illegality of the said sale, nor does the mere fact that no irregularity existed in the process of Registration of the suitland in the name of the 1st Respondent, validate the said Registration which was founded on an invalid sale.
I finally come to the contention by the Respondents that the 1st Respondent is an innocent third party, thus a bonafide purchaser without notice. I hold the view that this principle is inapplicable to the situation of the 1st Respondent in the circumstances, because the sale itself was illegal. It is only a third party who bought from the purchaser that can raise such an issue. In any event, the principle of bonafide purchaser without notice, will to my mind only apply where the seller had title or in the case of voidable sales, where there existed some formal defects and irregularities. In the circumstances of this case where the sale was null and void
ab initio,I do not see how that principle can apply. On these premises, I hold that the sale in execution of the suitland is thus invalid, and ought to be set aside.
In the same vien, the Registration of the suitland in the name of the 1st Respondent, which was predicated upon the said void sale is also void and invalid, and ought to be set aside. As Lord Denning MR declared in the case of Macfoy V UAC (1961) 3 ALL ER 1169
‘‘ If an act is void then it is in law a nullily. It is not only bad but incurably bad. There is no need for an order of the Court to set it aside. It is automatically null and void without more ado, though it is sometimes convenient to have the Court declare it to be so. And every proceeding which is founded on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse’’.
In the light of the totality of the foregoing, judgment is hereby, entered for the Applicant against the Respondents as follows:-
The sale in execution of immovable property to wit, lot 632 situate at Manzini Township Extension 7 in the Manzini District, be and is hereby declared null and void and accordingly set aside.
The transfer of immovable property to wit, lot 632 situate at Manzini Township Extension 7 by the 3rd Respondent to 1st Respondent under Deed of Transfer No. M4/2010 be and is hereby cancelled.
The 3rd Respondent be and is hereby directed to effect the re-registration of the immovable property to wit, lot 632 situate in Manzini Township Extension 7 in the Manzini District into the name of the Applicant, forthwith.
Costs is awarded against the 1st and 2nd Respondents respectively.
DELIVERED IN OPEN COURT IN MBABANE ON THIS
THE …………………………. DAY OF …………………2011
JUDGE OF THE HIGH COURT