Cuducap (Pty) Ltd v De Bruyn (69/2023) [2024] ZASCA 62 (29 April 2024)

The case of Cuducap (Pty) Ltd v De Bruyn concerns a dispute over the ownership and occupation of a residential property in Goodwood, Western Cape, South Africa. Mr. Philippus Johannes de Bruyn, the respondent, experienced financial difficulties and was unable to repay his mortgage loan to Absa Bank Ltd. He was introduced to Cuducap (Pty) Ltd, the appellant, through a business called Mortgage Recovery and its representative, Ms. Yvette Fourie. Cuducap agreed to invest in the property by purchasing it from Mr. de Bruyn for R1.6 million, using a mortgage loan from Standard Bank Ltd. The transaction included an installment sale agreement and a lease agreement, with Mr. de Bruyn renting the property from Cuducap while making payments to repurchase it.

Mr. de Bruyn made irregular monthly payments from June 2013 to July 2016 but then ceased payments, including the final amount due in April 2018. Cuducap also defaulted on its loan repayments to Standard Bank. In August 2018, Cuducap sent a letter of demand to Mr. de Bruyn, followed by a cancellation notice in September 2018, requesting him to vacate the property. Mr. de Bruyn refused, arguing that the agreements were interrelated and constituted a transaction that was contra bonos mores (against good morals) and invalid. He sought to have the property re-transferred to him.

Cuducap initiated eviction proceedings against Mr. de Bruyn in the Western Cape High Court, claiming that he and other unlawful occupiers should be evicted under the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act 19 of 1998 (PIE Act). The High Court granted the eviction order, finding the installment sale and lease agreements 'contrary to public policy' and 'void ab initio' but considering the deed of sale valid. Mr. de Bruyn appealed to the Full Court, which held that the three agreements constituted a single transaction and declared the entire transaction void ab initio, ordering the cancellation of the deed of transfer and the mortgage bond.

However, the Full Court granted relief that was not sought by Mr. de Bruyn and made findings adverse to Standard Bank's interests without joining them as a party. The Supreme Court of Appeal upheld Cuducap's appeal, highlighting the well-settled law on joinder. The court refrained from dealing with matters where a third party with a direct and substantial interest was not joined or where steps were not taken to ensure the judgment would not prejudicially affect their interests. The matter was remitted to the High Court to consider the joinder of Standard Bank and other third parties with a direct and substantial interest in the litigation.

The ratio decidendi of the case Cuducap (Pty) Ltd v De Bruyn is the principle that a court will not deal with matters where a third party with a direct and substantial interest in the litigation is not joined as a party, or where adequate steps are not taken to ensure that the court's judgment will not prejudicially affect the interests of such a third party. This principle underscores the importance of joinder in legal proceedings to protect the interests of all parties involved and ensure a fair and just outcome.

The case law referenced in the judgment of Cuducap (Pty) Ltd v De Bruyn [2024] ZASCA 62 (29 April 2024) pertains to the principle of joinder and the protection of third-party interests. The relevant case law is summarized below:

Matjihabeng Local Municipality v Eskom Holdings Limited and Others; Mkhonto and Others v Compensation Solutions (Pty) Ltd [2017] ZACC 35; 2017 (11) BCLR 1408 (CC); 2018 (1) SA 1 (CC): This case affirmed the principle that a court will not deal with matters where a third party with a direct and substantial interest is not joined or where steps are not taken to ensure the judgment does not prejudice their interests.

Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 (A): This case established the precedent that courts will refrain from dealing with issues that may affect the interests of a third party who is not joined in the suit.

Transvaal Agricultural Union v Minister of Agricultural and Land Affairs and Others [2005] ZASCA 12; 2005 (4) SA 212 (SCA): This case reiterated the principle that a court will not make findings adverse to any person's interests without them first being a party to the proceedings.

Watson NO v Ngonyama and Another [2021] ZASCA 74; [2021] 3 All SA 412 (SCA); 2021 (5) SA 559 (SCA): This case further emphasized the importance of joinder and protecting the interests of third parties who may be affected by the court's judgment.