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[2018] ZAWCHC 102
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Jiyana and Another v Absa Bank Limited and Others (A18/2018) [2018] ZAWCHC 102 (21 August 2018)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
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Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No.: A18/2018
In
the matter between:
THEMBINKOSI
KHULEKANI RUDOLPH
JIYANA
First
Appellant
NOMVO
JIYANA
Second
Appellant
and
ABSA
BANK
LIMITED
First
Respondent
CAPE
TOWN NORTH
SHERIFF
Second
Respondent
GARY
NIGEL
HARDISTY
Third
Respondent
JENNIFER
JANINE DOROTHY
HARDISTY
Fourth
Respondent
REGISTRAR
OF DEEDS, WESTERN
CAPE
Fifth
Respondent
Coram:
Allie, Samela et Boqwana, JJ
JUDGMENT
BOQWANA,
J
Introduction
[1]
This is an appeal against a judgment by
Meer J, granted on 29 June 2017, in which she found in favour of the
first respondent on
the basis that the issue brought before her by
the appellants could not succeed due to the applicability of the
doctrine of
res judicata
.
[2]
The appellants had brought an
application before the Court
a quo
seeking the following declaratory orders: (a) that the credit
agreement between the appellants and the first respondent was
lawfully
reinstated in terms of s129 (3) of the National Credit Act
34 of 2005 (“the NCA”); (b) that the default judgment
granted
on 14 April 2014 by the late Justice Blignault, in the
appellants’ absence, and the subsequent execution against the
appellants’
home and primary residence, known as Erf […],
Parklands, situate in the City of Cape Town (“the property”)
had
no legal force and should be set aside; and (c) that the public
auction of the property, as well as its transfer to the third and
fourth respondents, had no legal effect and should also be set aside.
Factual
background
[3]
The appellants are husband and wife, and
have been residing in the property for a period of 12 years, having
bought it in January
2004. A mortgage bond in favour of the
first respondent was registered over the property, pursuant to a loan
agreement the
appellants had with the first respondent.
[4]
The parties have over the years
litigated against each other in respect of the bond account’s
accumulated arrears. The
history relating to this particular
matter began with the lodging of summons, by the first respondent, on
06 November 2006 under
case number 12109/2006 for, inter alia,
payment of a claim in the amount of R491 292.32 and for an order
declaring the property
executable. On 24 June 2008, the
Registrar granted default judgment and a warrant of execution was
issued. Pursuant
thereto the appellants applied for a stay of
execution and rescission of the default judgment under different case
numbers.
[5]
On 13 October 2008 the parties took an
order by agreement before Thring J, in terms of which they agreed
that the default judgment
could be rescinded unopposed. Indeed
the judgment was so rescinded by Le Grange J, on 3 November 2008
[6]
The parties also agreed that the
appellants would be allowed to settle the arrears by instalments,
upon certain conditions. The
appellants would:
“
1.
…repay
the arrears
on their home loan account in the sum of approximately
R58 059.04
by making the following payments to the Respondent by way of direct
deposits into the Applicants’ [Appellants] mortgage bond
account number ….
1.1
R 58 059.04 on or before 7 November
2008;
1.2
Applicants [Appellants] shall pay the
normal bond instalments as determined by the Mortgage Bond and the
standard terms and conditions
pertaining thereto. The current monthly
instalment amount is R 7059.42 and the next bond instalment in due on
20 October 2008
2.
Should the Applicants [Appellants] fail to make the aforesaid
payments on or before the due dates thereof and/or comply with
any of
the terms of this order on or before the due dates, the full
outstanding balance in terms of the Mortgage Bond shall become
immediately due and payable.
…
.
4.
The remaining terms and conditions of the Mortgage Bond shall remain
in full force and effect.
…
.
7.
In the event of the Applicants [Appellants] not complying with the
terms of this order, the Respondent [First Respondent] shall
be
entitled, on 5 (five) days’ notice to Applicants [Appellants],
to apply for Judgment for the then outstanding balance
under the
Mortgage Bond, together with interest and legal costs, as well as an
order declaring Erf […] Parklands, situate
in the City of Cape
Town, commonly known as […], Parklands, in extent 325m²
executable forthwith.”
[7]
The appellants allege that they made
payment of the sum of R58 094.04, which was the arrear amount,
in accordance with Thring
J’s order. They further allege
that no legal costs or other charges were payable in terms of this
Order and this effectively
reinstated the credit agreement in terms
of s129 (3) of the NCA. In their view, the first respondent
would have had to send
a s129 (1) notice before it obtained a
judgment upon any default subsequent to the reinstatement of the
agreement.
[8]
According to the first respondent, the
appellants failed to make further payments as agreed in Thring J’s
order, resulting
in them falling into arrears again. In March
2014 the first respondent proceeded with an application for payment
in the amount
of R391 797.06 together with an order to declare
the property specially executable. This application was
unopposed and
served before the late Blignault J, who granted
judgment by default in favour of the first respondent, against the
appellants,
on 15 April 2014.
[9]
On 14 June 2014, the appellants applied
for the rescission of the default judgment granted by Blignault J.
The rescission
application was heard by Rosenberg AJ and
dismissed on 6 November 2014. Pursuant thereto a warrant of
execution was issued
and the sheriff attached the property.
[10]
The appellants applied for leave to
appeal, which was dismissed by Rosenberg AJ on 10 December 2014. The
appellants thereafter
petitioned the Supreme Court of Appeal (“SCA”)
resulting in a stay of sale in execution, which had been scheduled by
the first respondent to take place on 3 February 2015. The SCA
dismissed the petition for leave to appeal on 26 March 2015.
[11]
On 4 June 2015 the appellants approached
the Constitutional Court for leave to appeal and their application
was dismissed by the
Constitution Court on 27 July 2015.
[12]
During August 2015, the parties once
again entered into another deed of settlement. The appellants
allegedly failed to comply
with this settlement agreement, which led
to the first respondent arranging a further sale in execution of the
property on 5 April
2016.
[13]
A dispute arose as to the amount owed,
as well as the legal costs. The appellants brought a review of the
taxed bill of costs on
29 March 2016, which was dismissed on 21
October 2016.
[14]
On 30 March 2016, 7 days before the
scheduled sale in execution, the appellants lodged an urgent
application to stay the sale in
execution before Veldhuizen J, which
was dismissed. An application for leave to appeal which
followed thereafter was also
dismissed. The appellants
petitioned the SCA in this respect too. It is not clear what
the outcome of that application
was, as it was pending when papers in
respect of this matter were filed before the Court
a
quo
.
[15]
There are apparently opposed eviction
proceedings currently pending, brought by the third and fourth
respondents against the appellants.
Issue
on appeal
[16]
The appellants’ case, in a
nutshell, is that Blignault J, in violation of s130 (3) of the NCA
determined the first respondent’s
application and granted an
order enforcing a credit agreement between the appellants and the
first respondent, without satisfying
himself that the requirements of
s129 (1) had been complied with. This follows from the findings
of Rogers J in
Nkata v Firstrand Bank
Ltd and Others
2014 (2) SA 412
(WCC)
(“
Nkata HC”
)
and particularly at para 34 of that judgment.
[17]
This effectively amounted to a
constitutionally reviewable failure of justice; a breach of the rule
of law requirements stipulated
in s1 (c) of the Constitution; and a
violation of the appellants’ protected rights entrenched in
terms of ss34, 25 (1) and
25 (3) of the Constitution.
[18]
Mr Donen SC, who appeared for the
appellants, argued pointedly that clause 7 of the order by Thring J
was in breach of the NCA,
in that reliance on that clause by the
first respondent, and consequently its failure to issue the s129 (1)
notice and ultimately
the Court’s granting of the order
(without such compliance), resulted in a miscarriage of justice.
According to Mr Donen
SC, this failure rendered the orders, not only
of Blignault J, but that of Thring J too, void
ab
initio.
[19]
He referred to the decisions of
S
v Moodie
1961 (4) SA 752
(A) at 759 A-D,
and
Oliver & Another v
Attorney-General, Cape Provincial Division, and Others
1995 (1) SA
455
(C) at 460 – G to 462 J
,
to contend that Blignault J’s order should be viewed as one of
those orders which amounted to a failure of justice
per
se
. In his view, this is more
so when placed in a constitutional context, which underlines
compliance with property related
requirements and imposes a duty upon
the Court to ensure that those are observed prior to any order
relating to property being
granted.
[20]
He contends further that these issues
were raised by the appellants for the first time before Meer J in the
Court
a quo;
they had never been raised and determined by any court of law in
South Africa. In other words, they are new and therefore
the
res judicata
principle is not applicable. The Court
a
quo
misdirected itself when it found
otherwise.
[21]
The first respondent, on the other hand,
holds the view that the real issue between the parties, which
occupied the Courts from
the time the rescission application was
brought before Rosenberg AJ, is Blignault J’s judgment. In
this connection
it submits that the failures contended for by the
first respondent do not, in any event, render Blignault J’s
order null
and void. At best they amount to an irregularity
which can be rescinded or set aside.
[22]
Mr Van Riet SC, who appeared together
with Mr Jonker for the first respondent, submitted that failure to
comply with s129 (1) has
never been held by the Courts to render a
default judgment null and void. He referred to various
judgments, including that
of
Nkata HC
which was later confirmed in
Nkata v
Firstrand Bank Ltd
2016 (4) SA 257
(CC)
(“
Nkata CC
”)
by the Constitutional Court. In both instances the Courts
accepted that there was non-compliance with s129 (1), but
yet found
that the default judgment stood. If the default judgment was
not void
ab initio
,
the issues brought before the Court
a
quo
were
res
judicata
. According to the
first respondent, the appellants were advancing a case already
determined by Rosenberg AJ and dismissed
up to the Constitutional
Court. They could therefore not launch an application based on
the same facts.
Meer
J’s judgment
[23]
The Court
a
quo
considered various judgments
relating to the doctrine of
res
judicata,
including the principle
expressed in
Henderson v Henderson
[1843] EngR 917
;
1843 (3) Hare 100
(67 ER 313)
at 115 (Hare)
(“the
Henderson principle”) which states that when a given matter
becomes a subject of litigation, “
the
Court requires the parties to that litigation to bring forward their
whole case, and will not (except under special circumstances)
permit
the same parties to open the same subject of litigation in respect of
matter which might have been brought forward as part
of the subject
in contest, but which was not brought forward, only because they
have, from negligence, inadvertence, or even accident,
omitted part
of their case
.”
[24]
Rejecting the appellants’
contention, that the cause of action they were raising before her had
neither been raised, nor litigated,
between the parties and
accordingly
res judicata
did
not apply, Meer J stated the following:
“
[41] I am unable
to agree. The cause of action and factual basis that gave rise
to the rescission application was the default
judgment of Blignault J
on 15 April 2014. The rescission application sought to set
aside that judgment. The subsequent
three applications for
leave to appeal all the way to the Constitution Court, likewise
concerned that cause of action. The
cause of action in the
application before me is based on the same facts as these prior
applications, and whilst the application
before me is described as a
constitutional review of the default judgment granted by Justice
Blignault, it similarly seeks to set
aside Blignault J’s
judgment. The notice of motion, in doing so, seeks a
declaration that the credit agreement was
reinstated, and accordingly
Blignault J’s judgment has no real force.
[42] I note also that the
judgment of Rosenberg AJ dated 6 November 2014 in the rescission
application, as aforementioned, indicates
that the Applicant raised
the fact that no notice had been given by the First Respondent to the
Applicants in terms of section
129(1) of the NCA and in the result
the First Respondent was precluded from approaching the Court for the
order it obtained.
In this application before me the basis upon
which the relief is sought, similarly, is that the First Respondent
was obliged to
first send a notice in terms of section 129(1) of the
NCA before approaching the Court to seek judgment, and the failure so
to
do resulted in the default judgment of Blignault J being a
nullity. The fact that this argument might not have been raised
in precisely the same manner as it is now being raised before me,
does not detract from the fact that in essence the cause of action
before me, before Rosenberg AJ, the SCA and the Constitutional Court,
pertained to the setting aside of the judgment of Blignault
J on the
same facts. The fact that non-compliance with the NCA was not
raised in the pleadings before Rosenberg AJ and therefore
not
adjudicated upon by him does not detract from this.
[43] Nor does the fact
that the Applicant did not fully argue non-compliance with section
129(1) and section 130(1) of the NCA,
or the reinstatement of the
credit agreement, exclude the doctrine of
res judicata.
For, as is specified in the Henderson principle referred to above,
parties to litigation are required to bring forward their
whole case
and a court will not, except under special circumstances, allow the
same parties to open the same subject of litigation
in respect of the
matter which might have been brought forward but was not, only
because they have, from negligence, inadvertence
or even accident,
omitted part of their case.
Res judicata,
as
aforementioned, applies to every point which properly belongs to the
subject of litigation and which the parties, exercising
reasonable
diligence, might have brought forward at the time.
[44] The evidence makes
clear that the Applicant, an attorney, ably and relentlessly pursued
this matter, raised the non-compliance
with a section 129(1) notice,
was aware of it but failed for whatever reason to formulate it in the
pleadings and pursue it.
Even had he not been aware of this
aspect in the previous litigation, the Henderson principle does not
excuse him, requiring as
it does a litigant like him to put forward
every point which properly belongs to the subject of litigation,
exercising reasonable
diligence. The Applicant failed to do so.
The first
Nkata
judgment of Rogers J, which was
established law almost seven months prior to the application for
rescission on 6 June 2014 before
Rosenberg AJ, as aforementioned, was
not referred to. The fact that the first
Nkata
judgment
was the subject of an appeal at the time does not detract from the
fact that it was established law and binding in this
Division.
[45] The Applicants'
contention that they did not appreciate the true nature of their
cause of action until after the Constitutional
Court judgment in
Nkata,
on 19 November 2015, and consequently now have the
right to have their real dispute resolved by application of the law
which they
presently raise in their application, goes squarely
against the principal of finality of judgments referred to in
Molaudzi supra.
There would be no end to litigation if
parties were, after the conclusion of their cases, permitted to come
back to court
on a reformulation of their cause of action informed by
a later appreciation of the true nature thereof, as the Applicants
now
seek to do. There would be no finality to judgments if
parties could argue other points on the basis of subsequent legal
findings by our Courts. It is incumbent upon parties to
understand the true nature of their cause of action and litigate
their whole case to finality. The Applicants did not do so and
it is not open to them to traverse the same ground based on
a true
appreciation of their cause of action derived from the Constitutional
Court ruling.”
Evaluation
[25]
Against that background, the central
issue before this Court is whether Meer J, being a single judge,
could “review”
the judgment of Blignault J, on the basis
that it was void
ab initio
on constitutional grounds, as contended by the appellants.
[26]
It seems to me, the first question to
ask is whether Blignault J’s order was void, because if the
appellants cannot come home
on that, then the only basis upon which
Blignault J’s order could be challenged before another judge
would be by way of a
rescission.
[27]
It is not disputed by the first
respondent that, as clarified by the
Nkata
judgments, the credit agreement was
reinstated in terms of s129 (3), once the appellants made payment of
the amount of R58 059.04,
pursuant to Thring J’s order.
Accordingly, as Rogers J postulated at para 34 of Nkata HC, a
“new” s129
(1) notice would arguably had to have been
issued and Blignault J ought to have been satisfied that that was
done prior to determining
the matter and granting a judgment in
favour of the first respondent.
[28]
Section 129 (1) provides that:
“
(1)
If the consumer is in default under a credit agreement, the credit
provider-
(a)
may draw the default to the notice of
the consumer in writing and propose that the consumer refer the
credit agreement to a debt
counsellor, alternative dispute resolution
agents, consumer court or ombud with jurisdiction, with the intent
that the parties
resolve any dispute under the agreement or develop
and agree on a plan to bring the payments under the agreement up to
date; and
(b)
subject to section 130 (2), may not
commence any legal proceedings to enforce the agreement before-
(i)
first providing notice to the consumer,
as contemplated in paragraph (a), or in section 86 (10), as the case
may be; and
(ii)
meeting any further requirements set out
in section 130.”
[29]
Section 130 (1) states:
“
(1)
Subject to subsection (2), a credit
provider may approach the court for an order to enforce a credit
agreement only if, at that
time, the consumer is in default and has
been in default under that credit agreement for at least 20 business
days and –
(a)
at
least 10 business days have elapsed since the credit provider
delivered a notice to the consumer as contemplated in
section 86 (10),
or section 129 (1)
,
as the case may be;
(b)
in the case of a notice contemplated in
section 129 (1), the consumer has –
(i)
not responded to that notice; or
(ii)
responded to the notice by rejecting the
credit provider’s proposals; and
(c)
in the case of an instalment agreement,
secured loan, or lease, the consumer has not surrendered the relevant
property to the credit
provider as contemplated in section 127.
[30]
Whilst section 130 (3) stipulates that:
“
(3)
Despite any provision of law or contract to the contrary
, in
any proceedings commenced in a court in respect of a credit agreement
to which this Act applies,
the court may determine the matter only
if the court is satisfied that
-
(a)
in the case of proceedings to which
sections 127, 129 or 131 apply, the procedures required by those
sections have been complied
with
;
(b)
there is no matter arising under that
credit agreement, and pending before the Tribunal, that could result
in an order affecting
the issues to be determined by the court; and
(c)
that the credit provider has not
approached the court-
(i)
during the time that the matter was
before a debt counsellor, alternative dispute resolution agent,
consumer court or the ombud
with jurisdiction; or
(ii)
despite the consumer having-
(aa)
surrendered property to the credit provider, and before that property
has been sold;
(bb)
agreed to a proposal made in terms of section 129 (1) (a) and acted
in good faith in fulfilment of that agreement;
(cc)
complied with an agreed plan as contemplated in section 129 (1) (a);
or
(dd)
brought the payments under the credit agreement up to date, as
contemplated in section 129 (1) (a).”
(Own
emphasis)
[31]
Compliance with section 129 (1) is
therefore crucial prior to the court determining any matter involving
a credit agreement, despite
the contrary in any agreement. The
question is whether Blignault J’s alleged failure to satisfy
himself in regard to
that compliance, rendered his order a nullity.
In
The Master of the High Court
(Northern Gauteng High Court, Pretoria) v Motala NO & Others
2012
(3) SA 325
(SCA),
at paras 11 to 12,
Ponnan JA referred to a line of authorities which indicated that, as
a general rule a judgment was ineffectual
and a nullity when it was
given without jurisdiction in the judge pronouncing it, or where it
was given against a party not cited
to appear. In this regard
it was held that those kinds of judgments were null and void and
could be disregarded.
[32]
In
Motala
NO,
Kruger AJ had appointed
provisional judicial managers of a company thereby usurping a power
expressly reserved by statutory enactment
to the Master of the High
Court. Ponnan JA found that Kruger AJ’s order was a
nullity and “…
a
pronouncement to that effect was unnecessary. Nor did it first
have to be set aside by a court of equal standing…
”
(at para 14). In
MEC for
Health, Eastern Cape and Another v Kirland Investments (Pty) Ltd t/a
Eye & Lazer Institute
2014 (3)
SA 481
(CC)
,
Cameron
JA, however, while endorsing the findings in
Motala
NO
, took a view that “
The
courts alone,…, are the arbiters of legality
.”
This is to guard against the risk of disorder or self-help, by
for example public officials who would ignore irregular
administrative actions on the basis that they are a nullity (para 103
and footnote 78).
[33]
These principles have been followed in
various judgments including
Tödt v Ipser
1993 (3)
SA 577
(A) at 589 B-C, where the Court held that “…
in
our law the tendency is against holding that judgments are void
”
except in the already stated situations. See also Minister
of
Agricultural Economics and Marketing v Virginia Cheese and Food Co
(1941) (Pty) Ltd
1961 (4) SA 415
(T) at 422F – 423A;
Van
Rensburg NO v Naidoo NO 2012 JDR 2480 (ECP) at para 13; Trade Fairs
and Promotions (Pty) Ltd v Thomson and Another
1984 (4) SA 177
(W) at 183 D – E, There are numerous other judgments that
endorse this view.
[34]
In
Nkata
HC ,
Rogers J at para 21 held:
“
The
non-compliance with s 129 (1) of the Act afforded Nkata with a
bona fide defence to FRB’s action
. Whether in the
event that defence would have been merely dilatory would have
depended on Nkata’s reaction after FRB
gave due notice pursuant
to a direction of the court in terms of s 130(4) (b) of the Act.
A bona fide defence is an important component of showing
good cause for rescission as contemplated in rule 31(2) (b). The
non-compliance with s 129(1) also leads to the conclusion, in my
opinion, that default judgment was ‘erroneously’
sought
and granted within the meaning of rule 42(1)(a
) (see
Buys v
Changing Tides 17 (Pty) Ltd NO
[2013] ZAWCHC 150).
Compliance
with s 129(1) is a substantive legal prerequisite for the valid
institution of legal proceedings on a credit
transaction to which the
Act applies. The notice annexed to the summons (the notice
addressed to c/o 4 Devonshire Hill, Rondebosch)
did not, ex facie the
summons, constitute a valid notice in respect of the first mortgage
loan agreement and bond on which FRB
was suing. (The summons
alleged that Nkata’s chosen domicilium was […] V Street,
and this was also the chosen
address appearing in the first mortgage
bond annexed to the summons. The summons contained no
allegation that Nkata had selected
the Rondebosch address for
purposes of receiving all notices under the Act.)” (Own
emphasis)
[35]
At para 28, he goes on to say that:
“
Nkata
has not in the present case satisfactorily explained the lengthy
delay in seeking rescission. The absence of a satisfactory
explanation appears sufficiently, I think, from my summary of the
facts. Even when she learnt in March 2013 of the sale in
execution scheduled for 24 April 2013, she took until 13 May 2013 to
launch the present application. By then the property
had been
sold in execution to Kraaifontein Properties and the latter had
on-sold the property to a third party.
Clearly there will be
prejudice to third parties if the default judgment were to be
rescinded
.” (Own emphasis)
[36]
The Constitutional Court, in
Nkata
CC,
also found that there was
non-compliance with s129 (1). It recognised that the bank had
not given notice in terms of s129
(1) of the NCA to Nkata before
issuing summons. It then acknowledged that Rogers J had refused to
set the default judgment aside.
The Court rejected Nkata’s
continued attempt to reopen the issue by rescission, as being
inconsistent with her conduct of
agreeing to settlement, in the same
manner as Rogers J did and found. It maintained that the
default judgment stood.
[37]
Perhaps the question of whether non-compliance with ss129 and
130 of the NCA rendered the process void was best explained by
Cameron
J in
Sebola and Another v Standard Bank of South Africa
Ltd and Another
2012 (5) SA 142
(CC),
at paras 52 and 53, where
he said the following:
“
In my view the
notice requirement in s129 cannot be understood in isolation from
s130. This emerges from three considerations.
First, it is impossible
to establish what a credit provider is obliged and permitted to do
without reading both provisions.
Thus, while s 129 (1) (b)
appears to prohibit the commencement of legal proceedings altogether
(‘may not commence’),
s 130 makes it clear that where
action is instituted without prior notice, the action is not void.
Far from it.
The proceedings have life, but a court
‘must’ adjourn the matter, and make an appropriate order
requiring the credit
provider to complete specified steps before
resuming the matter.
The bar on proceedings is thus not
absolute, but only dilatory.
The absence of notice leads to
a pause, not to nullity
.” (Own emphasis, footnote
omitted)
[38]
This position was restated by the SCA in
Investec Bank Ltd
t/a Investec Private Bank v Ramurunzi
2014 (4) SA 394
(SCA),
where it is stated (at para 23) that “…
the
proceedings have a life, as Cameron J has said, and are not void,
despite the absence of a s129 notice. The very fact
that a
court must make an order as to how the proceedings are to be
continued indicates the validity of the summons rather than
its
nullity
.”
[39]
I accept that in this case we are not concerned with the
validity of summons, but with whether the judgment of the court, in
the
absence of a s129 (1) notice, was
void ab initio.
The
Court is precluded by s130 (3) from determining the matter until it
has been satisfied that there had been compliance with s129.
However, as illustrated by the judgments I have referred to,
non-compliance with s129 has not been held to render a default
judgment a nullity.
[40]
In my view, the fact that the order taken by agreement (Thring
J’s order) had a clause which permitted the first respondent
to
approach the Court for judgment upon default on five days’
notice to the appellants, without requiring it to first comply
with
s129 (1), in an instance where the arrears had been paid up, does not
render the default judgment void. This is because
the duty,
statutorily, is placed upon the Court to satisfy itself that,
“
[d]espite
any provision of law or
contract to the contrary…
”, there was compliance
with s129, before it can determine the matter. In other words,
whether or not there is a contract
contrary to the provisions of s
130 (3), the duty is placed on the court to satisfy itself that there
was compliance. Therefore
the existence of the contract makes no
difference to the duty imposed on the Court by s130 (3). The
Court’s error in
this regard would be susceptible to a
rescission, or, if a misapplication of the law, perhaps an appeal.
[41]
Even in the case of
Gundwana v Steko Development and Others
2011 (3) SA 608
(CC), where a Uniform Rule of Court empowering
Registrars to grant orders declaring immovable property executable,
was found to
be constitutionally invalid, the Constitutional Court,
at para 58, held that: “…
the mere constitutional
invalidity of the rule, under which the property was declared
executable, is not sufficient to undo everything
that followed.
In order to do so the debtors will have to explain the reason for not
bringing a rescission application earlier,
and they will have to set
out a defence to the claim for judgment against them. It may be
that in many cases those aggrieved
may find these requirements
difficult to fulfil.” (Footnotes omitted.)
[42]
Therefore, on a point as fundamental as constitutional
invalidity, the Court did not find a default judgment issued in terms
of
that rule to be ineffectual and null. Aggrieved parties
would still need to raise those defences, in the normal course, and
fulfil the requirements for a rescission of a judgment.
[43]
Same can be said in this case too, which involves a court
granting an order in a situation where there was arguably
non-compliance
with s129, despite the requirements of the NCA.
[44]
Therefore, having examined the cases as
to which matters will nullify a Court order, I am not persuaded that
Blignault J’s
order can be described as one falling within that
category. It is so that s130 (3) enjoined him to satisfy
himself that s129
(1) was complied with before granting an order.
His failure to do so amounted to no more than an irregularity, which
irregularity
has not been held by the Courts to nullify a judgment.
It is an irregular step that could be set aside by a Court of a
same
standing in rescission proceedings.
[45]
It is also telling that in the deed of
settlement entered into between the parties on 10 August 2015, the
appellants confirmed in
clause 1 of that agreement “
that
the judgment against them stands and accept liability to Plaintiff
jointly and severally, if the one pays the other will be
absolved
…”
Meer J noted this and referred to the principle of peremption raised
in
Nkata HC
at 421 A-C that “‘
no
person can be allowed to take up two positions inconsistent with one
another, or as is commonly expressed to blow hot and cold,
to
approbate and reprobate.’ In order to show that a person has
acquiesced in a judgment, the Court must be satisfied upon
the
evidence ‘that he has done an act which is necessarily
inconsistent with his continued intention to have the case re-opened
or to appeal
.’”
The appellants’ conduct by acquiescing that the judgment stood,
in the deed of settlement, signed after
the rescission was argued and
refused by Rosenberg AJ, is clearly inconsistent with their latest
nullity argument.
[46]
As an aside, although we do not have the benefit of reasons,
it is possible that Blignault J was not alive to the fact that the
appellants had brought their arrears up to date, at a certain point
after Thring J’s order. This possibly was not shared
with
him. Therefore when the Court made the order, it might not have
had crucial information before it, which would mean
the judgment was
erroneously made (which fits in perfectly with the requirements of
bringing a rescission application in terms
of Rule 42). In that
regard the Court could not be blamed for having acted contrary to the
law, because until such time as
it was aware that the arrears had
been paid up at some point, s 129 (1) would not have arisen.
[47]
The appellants would, in rescission proceedings, place before
the Court facts the Court was not aware of when granting the default
judgment, including the fact that they had paid the arrears in full
after Thring J’s order, which facts may
inter alia
result in the order being rescinded.
[48]
I also find the circumstances of this case distinguishable
from
Nkata,
in that in
Nkata
the default judgment was
issued in September 2010, after which
Nkata
made payments in
March 2011 and March 2012, which wiped out her arrears. Payment
of arrears there was made after the default
judgment was granted.
The Court accordingly found that the credit agreement was reinstated
as a matter of law, as Nkata had
made payments as contemplated in
s129 (3) (
Nkata HC
at para 45). As a result Rogers J
declared that the default judgment (granted in September 2010), and
the writ that followed
therefrom, ceased by operation of law to have
any force or effect from 8 March 2011. It is key to note that
the default judgment
had force up until 8 March 2011(despite the fact
that there had been non-compliance with s129 (1)).
[49]
In this case, however, the agreement would have been
reinstated before the default judgment was granted. The
significance
of this is that in
Nkata
the issue of a s129 (3)
arose as a factor separate from the rescission point because payment
of arrears was made after the default
judgment, rendering the
judgment of no force and effect, from the period that the arrears had
been paid in full. The non-compliance
with s 129 (1) in that
matter was argued as part of the rescission.
[50]
In this case, however, the picture is different; the agreement
was reinstated before the default judgment was issued. The
effect of the reinstatement in this case would have been that “fresh”
compliance with s129 (1) was required, along the
lines proposed by
Rogers J in para 34 of
Nkata HC
, before the Court could
determine the matter, as required by s130 (3).
[51]
This is a very important difference because in
Nkata
the default judgment could not be enforced after 8 March 2011
(payment of arrears), whereas in this case, the default judgment
stood until it could be set aside, because the complaint is not the
fact that there has been payment of arrears, but that a “fresh”
notice s129 (1) was not sent prior to the granting of the order by
the Court, and that complaint would have to be considered by
the
Court hearing the rescission.
[52]
If that approach is correct, which in my view it is, the
appellants are then faced with the hurdle of
res judicata
,
which incorporates the Henderson principle. They have to show
that the issue they are raising is not the same as that which
occupied the rescission.
[53]
In my view, the rescission proceedings were the appropriate
proceedings for determination of Blignault J’s failure to
comply
with ss129 and 130. That being the case, all matters
pertaining to the rescission of an order, including explanation for
default and any other errors that Blignault J would have made in
granting the default judgment, should have been raised with and
determined by Rosenberg AJ in the rescission application.
[54]
Upon examining Rosenberg AJ’s judgment, it is clear that
the issue of non-compliance with s129 (1) was raised by the
appellants
in argument. Rosenberg AJ found that this issue was
not raised in the papers, and how it constituted an error was
therefore
not stated. Accepting this non-compliance would
require the Court to separate and draw inferences from annexures.
Rosenberg
AJ made another finding at paragraph 14 of his
judgment that“… [
i
]
n any event, the judgment
of 15 April 2014 was based upon the Applicants’ alleged breach
of the provisions of the judgment
of 13 October 2008. Adopting
the two step approach adopted in
Grainco (Pty) Ltd v
Broodryk NO en Andere,
while the underlying mortgage bond
agreement is a credit agreement for the purposes of the NCA, the
judgment itself clearly is not.”
(Footnote omitted)
[55]
Therefore, non-compliance with ss129 and 130 of the NCA was
before Rosenberg AJ; the fact that he determined the issue in the way
he did, does not make it a new issue. Secondly, to the extent
that it was not raised in the legally comprehensive manner
that it
had been raised before the Court
a quo
, does not make it new.
Thirdly, even if it was not raised before Rosenberg AJ, the
appellants are confronted with the principle
that they should have
raised all of their case then. Fourthly, even if Rosenberg AJ’s
judgment does not pertinently
mention s129 (3), the only context
within which the appellants would have raised the applicability of
s129 (1), would have been
because the credit agreement had been
reinstated. Otherwise it would not make sense to raise
non-compliance with s129 (1),
if it was not in the context of the
reinstatement of the agreement by virtue of s129 (3). By the
time that the rescission
was argued before Rosenberg AJ,
Nkata HC
was a binding precedent in this division, as the Court
a quo
found.
[56]
It is also worth noting, that it appears that when the summons
was issued in 2006 culminating in the Thring J order, s129 (1) was
not in operation. It came into operation on 1 June 2007.
It follows logically then that the appellants could not have
raised
the s129 (1) non-compliance, as a step that was not followed prior to
the issuing of the summons in 2006. The only
reason compliance
with s129 (1) would have been relevant before Rosenberg AJ, would
have been because of the reinstatement of the
agreement by virtue of
s129 (3).
[57]
Furthermore, it is instructive that the SCA and Constitutional
Court, despite the fact that s129 (1) had been raised as an issue
before Rosenberg AJ, refused to grant leave to appeal the rescission
judgment. The applicability of not only s129, but of
ss25 and
26 of the Constitution was raised on the papers petitioning the
Constitutional Court. We allowed this evidence to
be handed up
on the basis that it was relevant to the question whether the issues
were
res judicata.
[58]
Having found that the issues were
res judicata,
Meer J
correctly went on to determine whether there were any exceptional
circumstances that would warrant relaxation of the
res judicata
doctrine, albeit not having been asked to do so by the appellants.
She correctly found that there was no basis to do so.
Whilst there seems to have been non-compliance with the NCA
requirements, which would potentially deny the appellants the
opportunities
afforded by the provisions of the Act, as consumers,
there are no exceptional circumstances to the level found in the
S
v Molaudzi
2015 (2) SACR 341
(CC) decision. The appellants
were presented with opportunities to make arrangements with the first
respondent on how payments
of the instalments could be made. They
entered into settlement agreements on numerous occasions.
[59]
They also do not state what they could have done had they
received the s129 (1) notice prior to the judgment being granted by
Blignault
J, and how non-compliance had prejudiced them by denying
them that opportunity Although the appellants were not legally
represented,
the first appellant was an attorney. Whilst he
should not be treated differently from other litigants, it is
important to
note that he was not in circumstances close to those of
Molaudzi.
Finally, the interests of the third and fourth
respondents are also an important consideration. This is one case
where the
principle of finality of judgments ought to be observed to
safeguard those interests.
[60]
For these reasons, there is no basis to interfere with the
Court
a quo’s
decision, in my view, and the appeal
should fail.
[61]
In the result, I would make an order in the following terms:
1.
The appeal is dismissed with costs, including the costs of two
counsel.
_____________________
N P BOQWANA
Judge of the High
Court
I
agree and it is so ordered,
_____________________
R ALLIE
Judge of the High
Court
I
agree,
_____________________
M I SAMELA
Judge of the High
Court
Date
of Hearing: 01 August 2018
Judgment
delivered: 21 August 2018
APPEARANCES
For
the Appellants: Adv. M. Donen SC
Instructed
by: Godla & Partners Inc., Cape Town
For
the First Respondent: Adv. Van Riet SC with Adv. W Jonker
Instructed
by: Fourie Basson & Veldtman C/O Walkers Inc., Cape Town