Johannesburg High Court Acting Judge Tebogo Thupaatlase has recently reversed an “unlawful” sale of property that occurred 20 years ago. Originally the house had been financed by the original owners, Agnes Malinga and Joseph Njoko, through the now non-existent NBS Bank during 1990.

When the NBS Bank underwent a series of several mergers in 2005 most of its assets and liabilities were transferred to Nedbank. During the course of this transition, BOE (now Nedbank), acquired the property as it underwent foreclosure and a sale in execution in 2001. Acting Judge Thupaatlase has ruled that the original sale in execution which occurred in 2001 had been done without judicial oversight or authority, which was deemed to be “unlawful sales of property”.

The Bank bought the property for R100 (One Hundred Rand), it then on-sold this property. The property was consequently sold to three entities, namely Meadowstar Investments 87 (Pty) Ltd, who then sold it to Company Unique Finance (Pty) Ltd, who then sold it to CUF Properties (Pty) Ltd (“CUF”). The final sale occurred in 2014, between CUF and Mr Tobeka Mahamba. The original owners, Agnes and Joseph, were never notified to whom to pay their instalments and eventually fell into arrears.

The first time the original occupiers discovered that their home had been sold previously for the past 20 years, was when Mr Mahamba applied to the Sebokeng Magistrates Court to evict them.

High Court judgement unscrambles an egg

Fast-forward to the High Court Application instituted by the original owners whereby Acting Judge Thupaatlase, in the application before him, had to determine the legality of the transactions over the years. The idea that “the Court is called upon to unscramble an egg, which was scrambled some two decades ago, is not far-fetched”. Furthermore, it was stated that “this case is about the rights of an owner of property that was sold without his or her knowledge and without due legal process. As well as implicating the rights of the bona fide (genuine) purchaser”.

The original owners had paid rent, which allowed them to stay in the property, however, there exists no proof of a rental agreement nor evidence to the fact that they were aware of the true state of affairs. The original owners attached proof of payment, which showed that in 2003 all necessary payments had been made.

The absence of legal process

Due to the absence of any legal process being followed, all sales were tainted by illegality and subsequent sales were also tainted due to this as supported by the case of Gundwana v Steko Development 2011 (3) SA 608 (CC). Acting Judge Thupaatlase declared the repossession of the property by the Bank to be unlawful and invalid and all subsequent sales thereto were deemed null and void. Furthermore, the Registrar of Deeds was ordered to cancel all transfers and register the property in the names of the Applicants within 60 days.

In this case, the acquisition of property by BOE Bank was not in accordance with the law. It is not denied that the bank held a mortgage bond over the property, however there is strict procedure regarding the exercise of those rights when it pertains to deprivation of residential property. In the case of Campbell v Botha and Another 2009 (1) SA 238 (SCA), the court held that there can be no sale in execution without a judgement and attachment in execution of that judgement.

The arbitrary deprivation of property is contrary to the law

In South Africa, the Constitution is supreme law and all conduct and actions must be measured against the principles enshrined herein. If the conduct is proven to be contrary to the law, then it must be deemed void ab initio and as such, unenforceable, especially in instances concerning arbitrary deprivation of property.

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