DUBE
J:
This
dispute came before me as a trial matter. The parties agreed to
dispense with the need to call oral evidence there being no disputes
of fact arising from the facts. Thereafter the parties filed heads of
argument and a statement of agreed facts. After argument, the court
granted the following order;
“IT
IS ORDERED THAT:
1.
The defendant shall give vacant possession of No.7 St. Michaels Lane,
Borrowdale otherwise known as the remaining extent of Stand 10
Reitfontein Township of Lot 1AB Reitfontein measuring 4714 square
meters within (7) seven days from the date on which the order is
served on the defendant.
2.
If the respondent or any person occupying the property through him
remains on the property after that date, the Sheriff is authorised to
remove them and their possessions from the property.
3.
Payment of holding over damages in the sum of US$2,000-00 dollars per
month from the 7th
of February 2013 to the date of ejectment.
4.
Costs of suit.”
Brief
reasons for the order were given. The court has now been requested
for detailed reasons for its order.
The
salient facts of this dispute are common cause.
On
12 July 2013 the plaintiff issued summons claiming the ejectment of
the defendant and all persons claiming occupation through him from
No.7 St Michael's Lane, Borrowdale, Harare and holding over damages
at $3,000-00 per month from January 2013 to the date the defendant
vacates the property.
The
plaintiff is the registered owner of the property in dispute having
bought it at a sale in execution and subsequently transferred it into
its name. The defendant who is in occupation of the property with his
family has refused to vacate the property.
The
brief background of this case is aptly summarised in the statement of
agreed facts as follows;
“1.
A judgment by default for the payment of an amount of US$415,951-91,
under case number HC5917/10, was obtained by Kingdom Bank against the
defendant, Dreibond Investments (Private) Limited (“Dreibond”)
and 9 other defendants on the 14th
of February 2011.
2.
The judgment also provided that a certain piece of immovable property
known as certain piece of land situate in the District of Salisbury
called the Remaining Extent of Stand 10 Rietfontein Township of Lot
1AB Reitfontein measuring 4714 square meters (“the Property”)
be declared executable.
3.
The Property
was registered in the name of Dreibond.
Dreibond is
not a trading company.
4.
The defendant holds all the issued shares in Dreibond.
5.
The directors of Dreibond
as per the Company Office records are Louise Nielson-Doran and the
defendant.
6.
A writ of execution against immovable property was issued in matter
HC5917 on the 15th
of April 2011.
7.
The Property
was attached into execution and duly advertised for sale by public
auction on the 19th
of October 2012.
8.
The Plaintiff represented by Tsitsi and Prince Zireva bid for the
Property
and
the Sheriff for Zimbabwe on the 7th
of November 2012 duly declared the Plaintiff the highest bidder and
purchaser of the Property
at a purchase price of US$284,000-00.
9.
The Property
was
transferred to and registered in the name of the Plaintiff on the 5th
of February 2013.
10.
On the 7th
of February 2013 the Plaintiff demanded that the Defendant vacates
the Property.
11.
The Defendant has refused to vacate the Property
and contends that he has the right to remain in occupation in terms
of a lease agreement allegedly executed between Dreibond
and
his wife, Louise Nielsen Doran, on the 28th
of September 2012. A copy of the alleged lease agreement is attached
hereto marked Annexure
“A”.
The alleged lease agreement provides for the payment of rentals at
the rate of US$1,500-00 per month.
12.
The Defendant and/or his wife have not paid any rentals whatsoever to
the Plaintiff. The Defendant tendered rent to the Plaintiff on the
24th
of July201.
13.
The Defendant and the other 10 defendants applied for the rescission
of the default judgment of the 14th
of February 2011 under case number HC9634/11. The application was
dismissed on the 17th
of October 2013. Judgment HH 363/13 refers.
14.
On the 19th
of March 2013 the Plaintiff obtained a report from Clipcrunt Real
Estate which put market rentals for the property at US$3,000-00 per
month. A copy of the report is attached hereto marked Annexure
“B”.
15.
Defendant obtained two (2) independent evaluation reports from Estate
Agents which put the rentals for the
Property at
US$1,500-00. Copies are attached marked as Annexure
“C” and
“D”.
16.
The Parties have agreed that a fair market rental for the
Property
is in the amount of $2,000-00 per month.”
At
the hearing of this matter, the defendant raised preliminary points
which I will deal with in seriatim.
The
defendant submitted that the plaintiff was required to cite the
Registrar of Deeds in compliance with Rule 250 of the High Court
Rules. Further that the Sherriff of the High Court should have been
cited as the application makes reference to a sale in execution. That
the failure to cite the two parties is fatal to the proceedings.
Order
32 Rule 250 reads as follows:-
“In
any case of any application in connection with the performance of any
act in the Deeds Registry, a copy of the application shall be served
on the Registrar of Deeds concerned not less than ten days before the
date of set down for his consideration, and for a report by him if he
considers it necessary or the court requires such a report”.
The
ownership of property in this dispute has already been transferred to
the new owner.
In
a related case of
Jamila Omar v
Shabir Omar HH344/13,
the same preliminary points were raised. I had occasion to deal with
these points and ruled as follows;
“The
relief sought is for eviction and does not require that the Registrar
of Deeds to perform any act in 'connection with the performance of
any act in the Deeds Registry' as the property has already been
transferred.
The
applicant is not seeking registration or revocation of registration
which would require the registrar to perform any act in Deeds
Registry.
There
was no legal basis to cite the Registrar as an order for eviction
does not affect the title of the property and does not concern the
Registrar of Deeds. The Registrar will not be affected by the
decision of the court nor is he required to do anything resulting
from the outcome of this application.
There
was no need to cite the Deputy Sherriff because the order sought does
not require him to perform any act in relation to it. The sale the
respondent challenges was not conducted by the Deputy Sheriff but the
Sheriff. No basis has been shown for the citation of both the
Registrar of Deeds and the Deputy Sheriff. The point in
limine
does not find favour with the court and must fail.”
I
have not been swayed to shift my position with regards these points
and my position remains the same.
The
Sheriff of the High Court has no interest in this case. He has
conducted the sale in execution and has no further interest in the
property. The need to cite the Sheriff would only arise if this was
an application to set aside the sale.
That
point fails.
The
defendant submitted that the plaintiff does not have the requisite
locus
standi
to bring this application on the basis that it does not own the
property which is subject of the dispute. The parties agree in their
statement of agreed facts that the plaintiff bought the property and
registered it in its name.
This
point was not pursued.
The
defendant further submitted that the defendant has the lawful right
to remain in occupation of the premises through his wife Louise
Nielsen who has a legal and binding lease with the former owners of
the property thus, Dreibond Investment (Private) Limited.
The
defendant submitted that the new owner, the plaintiff is bound to
observe and adhere to that lease agreement on the basis of the huur
gaat voor
koop
concept.
Further
that the defendant's wife ought to have been joined to these
proceedings on the basis that she is the holder of that lease.
I
propose to deal with this point when I deal with the merits of this
case as this point is intrinsically intertwined with the merits of
this matter.
The
defendant requested the court to stay these proceedings for the
reason that the main matter is still pending under HC9634/11.
The
proceedings under that file relate to an application for rescission
of a default order granted at a Pre-trial Conference stage which led
to the sale of the property which is subject of this trial.
The
defendant submitted further that the defendant has objected to the
sale of the property and applied to set aside the sale in terms of
Rule 359 and that it is premature for the plaintiff to seek eviction
at this stage.
The
application for rescission of the default order under HC9634/11 was
subsequently dismissed. The defendant lost the application. The
application to set aside the sale, if it has been filed, does not
affect the plaintiff's rights over the property as the plaintiff
has already transferred the property into his name. It has vested
rights in the property and is entitled to vindicate its rights in the
property.
In
any case where a party buys a property and that includes property
bought at a sale in execution, and later registers the property in
his name, he acquires real rights over the property. His registration
of the property in his name in the Deeds Registries Office is an
announcement to the whole world that he is the owner of the property.
Such owner has the right to vindicate his property from any
unauthorised person who may be in occupation or possession of the
property.
That
point fails.
I
now come to the merits of this matter.
I
will deal first with issues related to the making of the lease
agreement and the correctness of the parties before the court.
The
ownership structure of the company reveals the following:
(i)
The defendant is the sole shareholder of Dreibond Investments (Pvt)
Ltd, the former owner of the property which is subject of this
dispute.
(ii)
The company is not a trading company.
(iii)
The defendant and his wife are the only directors of that company.
(iv)
The property was registered under the defendant's company and was
sold in order to settle the defendant and his company's
indebtedness to Zimbank Bank.
The
cardinal principle is that a company is a separate entity which has a
separate and distinct legal existence from that of its members. See
Salomon
v
Salomon (1897)
AC 22 (HL). There are exceptions to this rule and these are grounded
on policy considerations.
In
US
v
Milwaukee
Refrigerator Transit Company (1905)
42 Fed 247 at 255 the court said of exceptions to the rule;
“When
the notion of a legal entity is used to defect public convenience,
justify wrong, protect fraud or defend crime, the law will regard the
corporation as an association.”
In
such cases the courts will lift the corporate veil and investigate
the activities of the company.
In
Cape
Pacific Ltd
v Lubner
Controlling Investment (Pty) Ltd
and
Others
1993 (2) SA 784 (C) the court held as follows;
“The
general principle underlying this aspect of the law of lifting the
veil is that, when the corporation is the mere ego or business
conduit of a person, it may be disregarded. This rule has been
adopted by the courts in those cases where the idea of the corporate
entity has been used as a subterfuge
and
to observe it would work an injustice.”
In
Waltersteiner
v
Moir;
Moir v
Waltersteiner
and Others
(1974) 3 ALL ER 217 (CA) Denning MR was prepared to treat various
companies through which the appellant Dr Waltersteiner had operated
as if they were “just Puppets of Dr Waltersteiner.” At 1013 of
the judgment Lord Denning held as follows;
“He
controlled their every movement. Each danced to his biding. He pelted
the strings. No one else got within reach of them. Transformed into
legal language, they were his agents to do as he commanded. He was
the principal behind them. I am of the opinion that the court should
pull aside the corporate veil and treat these concerns as being his
creatures for whose doings he should be and is responsible.”
The
evidence that emerged during the trial shows that the defendant and
his wife have always been in occupation of the house. They then
devised a scheme to save the property from the sale that was
imminent. They entered into a lease agreement between themselves on
the eve of a sale in execution of the house.
It
is necessary to unwrap the lease agreement and reveal its true
nature.
On
14 February 2011 Kingdom Bank obtained a default order against the
defendant's company. A writ of execution against the property was
issued on 15 April 2011 resulting in the property being attached. The
property was advertised for sale by the Sheriff on 19 August 2011.
The defendant tried to stop the sale by filing an urgent chamber
application, under HC12308. That application was not to yield any
fruit.
The
defendant's company states that he only got to know of the default
judgment on 19 August 2011 when adverts appeared in the Herald
Newspaper advertising
the sale in execution. The property was going to be sold on 2
September 2011. The property was sold soon after the urgent chamber
application on 7 November 2012.
On
28 September 2011 the defendant's company entered into an agreement
of lease over the property. The defendant signed the agreement on
behalf of his company. The defendant and his wife continued in
occupation of the property.
The
lease agreement was entered into after the Sheriff had indicated that
the property was going to be sold.
The
defendant and his wife were aware from as far back as April 2011 when
judgment was entered against them that this property was going to be
sold. The defendant's company and his wife entered into a lease
agreement solely for purposes of defeating the sale in execution that
was imminent and so that they could remain in occupation of the
property after the sale. The circumstances of the making of this
lease agreement call for the court to pierce the corporate veil and
investigate the activities taking place thereunder.
This
case is akin to the Cattle
Breeders Farm (Pvt) Ltd v
Veldman
(2)
1973 (2) RLR 261 case. This case involved a husband who used his
company to try and evict his wife. The court ruled that the husband
could not hide behind the company to seek eviction of his wife.
The
defendant has tried to hide behind his wife and the company by
leasing the property in issue to her and to escape eviction.
The
lease agreement was deliberately offered to the wife even though
there is no actual distinction between the wife, defendant and the
company.
Our
courts have held that a husband and wife hold a uniquely special
relationship and that they normally have a common interest and
household. See Warren
Park Trust v
Antony
Ernest Pahwaringira and Others HH39/2009
and Masiyiwa
Cleopas Gonye
v Stella
Mavis Gonye
SC15/09.
The
facts of the case involved a company formed by appellant which he,
his wife and sons were shareholders. The court held that the company
was part of the matrimonial estate. The court held as follows:
“Stripped
of the corporate veil, the proceeds of the farming operations
belonged to the appellant. The company was nothing more that the
applicant's alter ego. It had no greater rights to the money than
he possessed.”
When
one considers the defendant's position in the company and that of
his wife, one cannot avoid the conclusion that the property was,
before the sale, part of the matrimonial estate of the defendant and
his wife.
The
transaction entered into is a simulated and dishonest transaction.
The
court is not deceived by its form but is concerned about its
substance. It appears to me that this is a mere paper agreement. It
cannot become a real agreement.
In
Kilburn
v Estate Kilburn 1931 AD 501
the court held that;
“---
a court of law will not be deceived by the form of a transaction; it
will rend aside the veil in which the transaction is wrapped and
examine its true nature and substance.”
In
Boots
Company (Pvt) Ltd v
Somerset
West Municipality
1990 (3) SA 216 (C) at 219 the court set out the law on simulated
contracts as follows:
“I
take the law on this question from the case of Skjelbreds Rederi A/S
and Others v Hartless (Pvt) Ltd 1982 (2) SA 710 (A) in particular, I
cite the following passage from the (as he then was), reading from
p732:
'The
law relating to the question of simulated, or disguised, agreements
is summed up in the well-known Roamanism, plus valet quod I
agituraquam quod simulate concipitur. In Justiniaris Codex 4.22.1 the
rule is briefly stated in the following terms: In Contractibusrei
veritas debet, i.e. in contract the truth of the matter, rather than
the writing, must be looked at.'”
In
Zandberg
v Van
Zyl
1910 AD 302 INNES JA dealt with this subject and held that in a
simulated contract, parties enter into such a contract in order to
secure some advantage which otherwise the law would not give or
escape some disability which the law would otherwise impose. He says
at 309 that such parties;
“Endeavour
to conceal its (transaction) real character. They call it by a name,
give it a shape intended not to express but to disguise its nature
and when a court is asked to decide any rights under such agreement.
It can only do so by giving effect to what the transaction really is
and not what it in form purports to be.”
It
is easy to detect this simulation.
This
is be done by considering the facts leading up to the contract and
circumstances under which it was made.
It
is apparent that the transaction or agreement was entered into simply
to retain the property. The defendant company and defendant's wife
entered into the lease agreement in order to thwart the sale of the
house. They devised a plan, wherein they would remain in occupation
of the property despite the sale and defeating the sale in execution
that was in progress. The agreement was entered into after the writ
of execution had been issued and after the property had been placed
under judicial management. They wanted to defeat the sale at all
costs. They devised a strategy to defeat the sale.
The
defence of
huur gaat voor koop
is being raised to frustrate the plaintiff's rights.
The
defendant now resists the eviction on the basis of this lease
agreement. He seeks to hide behind his wife. His partner in crime. It
is clear that the lease agreement was made simply to save the
property. The parties to the lease agreement were not bona
fide
when they entered into the lease agreement.
The
court has considered, in coming up with this position, that the
defendant is a sole shareholder and owner of the company. He is in
effect the sole owner of the company. His company represented by
himself entered this contract with his own wife, a director of the
company. The defendant signed the lease agreement in the face of a
pending execution. The defendant benefits from the existence of the
lease. He is actually in occupation of the property with his wife. He
was well aware that he would benefit from the agreement he was
signing it. The parties were in occupation of the property without a
lease agreement prior to the sale.
One
wonders why there was now a need for a lease agreement.
The
defendant clearly sought to protect his property. Any threat to the
property was a threat to him. This cannot be a genuine lease
agreement. There is no doubt in my mind that the lease agreement was
simulated.
The
evidence reveals that the defendant entered into the lease agreement
to evade a creditor who was pursuing his company and property. The
lease agreement was fraudulently entered into.
This
is a proper case in which to lift the corporate veil and investigate
the activities of the company.
The
defendant is the alter
ego
of the company. The defendant controlled the company as he was the
sole shareholder. He and his wife were the only two directors of the
company. The company is a one man company. He is the company. The
defendant's company is his. There is no separation between the
defendant and his company. The company is simply a tool through which
the defendant owned the property. He cannot be separated from the
company. The defendant has involved in activities through the company
which are irregular and fraudulent. The defendant used his company to
justify wrong and protect fraud.
This
lease agreement is irregular.
This
agreement cannot stand in the way of the plaintiff's claim. The
lease agreement is a nullity and no rights flow from it.
The
plaintiff is, on the basis of this reason alone entitled to evict the
defendant, his company and his family from the house in issue.
The
defendant contends that he has the right to remain in occupation of
the property on the basis of a lease agreement executed between his
company and his wife on 28 September 2012. This submission is
premised on the argument that the plaintiff inherited an obligation
to allow the defendant and his wife to continue in occupation of the
property.
He
relies on the concept of huur
gaat voor koop.
The
defendant contends that it is only his wife who can effectively
respond to the issue regarding the terms and conditions of the lease
agreement.
The
defendant and his wife have always been aware of the plaintiff's
title and claim in the property. The two are partners in the
defendant's company and are in matrimony. The wife is presumed to
be aware of this action.
The
defendant pleaded that there has been a non-joinder of his wife as a
party. No effort was made either at pre-trial stage or any other
subsequent stage to join her as a party.
The
defendant and his wife seem to be playing a hide and seek game with
the plaintiff. No explanation was given regarding the defendant's
failure to apply for joinder to this action. The defendant and his
wife seemed bent to frustrate the plaintiff's claim by not joining
the wife to this claim. This is totally unacceptable. Misjoinder does
not operate as a defence. The rules of this court provide in Rule 87
as follows:
“87.
Misjoinder or nonjoinder of parties
(1)
No cause or matter shall be defeated by reason of the misjoinder or
non joinder of any party and the court may in any cause or matter
determine the issues or questions in dispute so far as they affect
the rights and interests of the persons who are parties to the cause
or matter.”
In
any case where there has been a non joinder, the court may in terms
of Rule 87 determine the issues and questions in dispute in so far as
they affect the rights and interests of the persons before it.
The
defendant and his wife and family were in occupation of the property
before the sale. What this essentially means is that the company, its
shareholders as well as its directors are still in occupation of the
house and have not moved an inch since the sale of the property. The
defendant entered into a fraudulent lease agreement so that he would
remain in the house.
Once
it is accepted that the defendant is the alter
ego
of the company and controlled all its activities, he should be
responsible for its entire doings.
He
and the company are still in occupation of the property and there
seems to be sense in citing the defendant as a party to these
proceedings.
The
court has found that the lease agreement is simulated and a nullity
and therefore anyone in the premises may be cited for ejectment.
I
cannot find fault with the plaintiff's citation of the defendant as
a party to this action.
The court will proceed and determine the dispute in so far as it
affects the rights and interests of the persons before it.
Even
assuming I am wrong in my approach, the rule of huur
gaat voor koop does
not assist the defendant's case or that of his wife.
The
concept of
huur gaat voor koop
is found under Roman Dutch Law and simply means that hire takes
precedence over sale. The doctrine was defined in Genna-Wae
Properties (Pty) Ltd v
MedioTromics (Natal) (Pty) (supra)
as
follows;
“I
hold that in terms of our law the alternation of leased property
consisting of land or buildings, in pursuance of a contract of sale
does not bring the lease to an end. The purchaser (now owner) is
substituted ex
lege for
the original lesser and the latter falls out of the picture. On being
so substituted the new owner acquires by operation of law all the
rights of the original lesser under the lease. At the same time the
new owner is obliged to recognise the lessee and to permit him to
continue to occupy the leased premises in terms of the lease provided
that he (the lessee) continues to pay the rent and otherwise to
observe the obligations under the lease. The lessee in turn is also
bound by the lease and provided the new owner recognises his rights,
does not have any option, a right of election, to resile from the
contract.”
What
the concept entails is that a tenant who entered into a lease
agreement prior to the sale is protected from eviction where the
property is sold to a third party. He is entitled to remain in
occupation of the property until his lease expires. He must abide by
the terms of the lease agreement. See, One
Naught Three Craighall Park (Pty) Ltd 1940
TPD 299,
where
the court
held that a lessee of property transferred from the previous lesser
is required to recognise and observe the terms of the lease after
transfer.
For
a tenant to benefit from the lease, the lease should not have been
fraudulently entered into or entered into in bad faith.
In
Genna
Wae Properties (Pty) Ltd v Medio Tronics (Natal) (Pty) Ltd
(supra),
CORBETT J quotes from a passage from Voet
19.2.17
which
states as follows;
“...sive
private venditio interveniat,sive publica, aut ex decreto magistratus
adhibitis hastoe solennibus ad creditorum pettitionem;sic ut et jus
retentionis conductor competat, si remanere in conductutione malit,
quam post eeexpilsionem intempestivam ad id quod interest judio
experiri, si modo bona fide, non in fraudem creditorum (pendent forte
subhastationionis judicio ,aut lite jam mota), location facta sit.”
The
Beinart and Ormonde's translation of that passage reads as follows;
“.......
whether it be a private sale or a public one, or a formal judicial
sale following on a decree of a magistrate at a petition of
creditors; the result is that the lessee has a right of retention, if
he wishes to remain in possession rather than bring an action for
damages after he had been ejected with prejudice to himself, provided
that the lease had been made in good faith and not in fraud of
creditors (for instance,where process for judicial sale was pending,
or the suit had already been brought)”(
the underlining is mine for emphasis)
The
underlined part emphasizes the need for the tenant to be bona
fide
and the requirement that the lessee should not enter the contract of
lease fraudulently and with a mind to evade creditors especially
where a sale in execution was pending.
A
tenant wishing to rely on the concept should show that he entered
into the lease agreement with the previous owner before the sale. He
should show that he is bona
fide
and did not enter into a lease agreement fraudulently in order to
avoid an imminent sale or a claim by creditors. He must also show
that the new owner was aware of the lease agreement and bought the
property with the knowledge of the lease agreement.
It
is a requirement that the tenant should abide by all terms of the
contact and continue to pay his rentals to the new owner. Failure to
do so amounts to breach.
The
new owner only has an obligation to adhere to the lease agreement if
the tenant is willing to pay rentals and does pay the rentals.
Where
the tenant fails to pay rentals agreed to with the previous owner, he
commits a breach and he is liable to the new owner. See the Genna
Wae case for
this proposition.
There
are two schools of thought regarding whether this concept applies to
sales is execution.
In
the Liquidators
Union & D Rhodesia Wholesalers Ltd v
Brown & Co 1922
AD 549 at 558-9 by Kotze JA made the following remarks;
“While
an ordinary arrest of property under the Roman-Dutch law gives no
preference, an arrest effected on property in execution of a judgment
creates a pignus
praetorium or
to speak more correctly a pignus
judiciale,
over such property. The effect of such a judicial arrest is that the
goods attached are thereby placed in the lands or custody of the
officer of the court. They pass out of the estate of the judgment
debtor so that in the event of the debtor's insolvency the curator of
the latter's estate cannot claim to have the property attached
delivered up to him to be dealt with in the distribution of the
insolvent's estate.”
A
similar approach was adopted in Maphosa
and Anor v
Cock and Others 1997
(2) ZLR 314 (HC) where the court following on the Liquidators
Union case
the court held that in such an instance, the property could not be
dealt with by the company as if it had not been attached. See also
Simpson v
Klein NO and Others 1987
(1) SA 405 (W).
In
Herbstein and Van Winsen Civil
Practice of the Superior Courts in South Africa
3ed state at p597G;
“A
judgment creditor is entitled to attach and have sold in execution
the property of his debtor notwithstanding that a third party has a
personal right against such a debtor to the ownership or possession
of such property which right arose prior to the attachment or even
the judgment creditor's cause of action and of which the judgment
creditor had notice when the attachment was made. An attachment in
execution creates a judicial mortgage or pignus
judici
here are exceptions to this rule.”
In
Graham
v
Local Overseas Investments (Pvt) Ltd 1942
AD 95 the court suggests that the concept is not available if
insolvency is involved.
In
Genna-Wae
Properties (Pty) Ltd v
MedloTronics
(Natal) (Pvt) Ltd (435/13)
(1995) ZA SCA 42 1995 (2) SA 926 AD, 1995 (2) ALL SA 410,
the
court took the view that the concept of huur
gaat voor koop applies
to judicial sales in execution. The court in that case remarked as
follows;
“Whether
the sale takes place privately or publicly or by order of a
magistrate a petition of creditor is irrelevant.”
I
am persuaded to follow the approach followed in Liquidators
case. This
is a decision of our own Appellate Division.
The
concept of huur
gaat voor koop
does not apply to sales in execution.
In
any case where a property has been placed under judicial arrest, it
falls into the hands and control of the Sheriff. It ceases to be part
of the debtors' estate. It cannot be dealt with in any manner not
sanctioned by the Sheriff. The previous owner and debtor are not at
liberty to deal with the property as if it has not been attached. The
debtor at that moment ceases to have any right to deal with the
property in any manner not sanctioned or directed by the Sheriff. The
debtor cannot deal with the property at his whims. To do so would be
to defeat the judicial process underway.
The
defendant company, defendant and his wife ought not to have dealt
with the property as if it was still in under their control.
The
defendant is a schemer. His game plan is as plain as the nose on his
face. His imagination ran riot when he and his company being aware of
this development proceeded and entered into a lease agreement with
his wife, a director of the same company and unauthorised by the
Sheriff. The defendant's company and its directors dealt with the
property as if unaware that it had been attached.
It
should not matter that the sale of the property had not actually gone
through.
There
is no doubt that the idea behind the principle of huur
voor gaat koop
was to protect litigants who prior to the attachment and sale of the
property had entered into a lease agreement for the lease of the
property.
A
judgment creditor who leases his property which is subject of an
attachment in the hope that he can later rely on the lease agreement
and remain in occupation of the property to frustrate the new buyer
can only fantasize.
They
were waiting to pull the carpet from under their feet.
The
courts have no interest in aiding and abetting unscrupulous
litigants.
The
lease agreement is for this reason also irregular.
The
defendant and his wife did not advise the Sheriff and the purchaser
of the lease agreement. The Sheriff dealt with the sale as if it was
free of a lease. The purchaser did not have knowledge of the lease.
This was part of the game. The defendant cannot benefit from the
lease agreement.
The
defendant and his wife never treated the lease agreement as such. It
does not appear that they ever paid any rentals in lieu of the lease
agreement. Although being aware that the plaintiff had bought the
property and his interest in it, the defendant and his wife never
paid any rentals for it. The defendant and his wife have deliberately
not been paying rentals for the leased property to the new owner, the
plaintiff.
They
are in breach of the lease agreement.
No
evidence was led to show that the defendant and his wife tried to pay
rentals to plaintiff or that the plaintiff refused to accept such
rentals as alleged.
Even
assuming that the lease was valid, the defence of huur
gaat voor koop can
only avail a tenant who pays his rentals and on time.
The
plaintiff is entitled to eject the defendant from its property.
The
payment plan and rentals payable and due was only discussed and
agreed to at the hearing. The parties agreed that a reasonable and
fair rental for the premises is $2,000-00. The plaintiff became
entitled to rentals the moment the property was transferred into its
name.
The
plaintiff is entitled to vindicate its property from whoever may be
in occupation or possession of the property. The defendant and his
company are in occupation of the property. They have not shown an
entitlement to remain in the property. The plaintiff is entitled to
the order sought.
It
is for these reasons that I granted the order sought.
Wintertons,
plaintiff's legal practitioners
Dzvetero
& Antonio Legal Practitioners,
defendant's legal practitioners
