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[2015] ZAGPJHC 45
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Mekgoe v Firstrand Bank Ltd and Others (28687/2010) [2015] ZAGPJHC 45 (25 February 2015)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
CASE
NO: 28687/2010
DATE:
25 FEBRUARY 2015
In
the matter between
NNYANE
JOSEPHINE
MEKGOE
...........................................................................
APPLICANT
And
FIRSTRAND
BANK
LTD
.........................................................................
FIRST
RESPONDENT
THE
SHERIFF OF THE HIGH COURT RANDBURG
........................
SECOND
RESPONDENT
VISION
POINT PROPERTIES
CC
.........................................................
THIRD
RESPONDENT
REGISTRAR
OF
DEEDS
...................................................................
FOURTH
RESPONDENT
Judgment
– Execution - immovable property - pursuant to sale in
execution following upon judgment by default - application
for
rescission of default judgment -requirements - reasonable and
acceptable explanation for the default in appearance - no explanation
for default - bona fide defence carrying some prospect of success
-none shown to exist - application dismissed
J
U D G M E N T
VAN
OOSTEN J:
[1]
This is an application for firstly, declaring a sale in execution of
an immovable property pursuant to a warrant of execution
issued in
consequence of a judgment by default, unlawful; secondly, rescission
of the default judgment, thirdly, re-registration
of the property
sold in execution to the third respondent into the name of the
applicant, and fourthly, an interdict against the
third respondent
from evicting the applicant from the property. The first respondent
(the bank) and the third respondent oppose
the application.
[2] It is at the outset
necessary to comment on the ineptness and lack of preparation by the
applicant’s legal representatives
in presenting this case to
this court. The notice of their appointment as attorneys of record on
behalf of the applicant is dated
16 January 2015. The notice of
set-down by the bank’s attorneys of this application, for
hearing on 23 February 2015, was
served by the sheriff on the
applicant’s son, on 5 January 2015. The papers in this matter,
I was informed, were paginated
by the bank’s attorneys. The
applicant’s attorneys did absolutely nothing to ensure that the
practice directives applicable
to opposed applications were complied
with. The court bundle of documents was still incomplete and had not
been properly paginated
and indexed when the matter was heard.
Counsel for the applicant failed to file either a practice note or
heads of argument, as
is required by the practice directive of this
court. When the matter was called on the date allocated for hearing
(Monday 23 February)
counsel for the applicant was due to some
misunderstanding, not present in court and in his absence the
application was dismissed
with costs. The matter was again called
later that day but could not be heard as counsel for the third
respondent was not available.
The next day the matter was called out
of turn and in the absence of any objection I recalled the order I
had made the previous
day. By then counsel for the applicant had
still not made any attempt to file either a practice note or heads of
argument. A notice
of amendment of prayers 1 and 2 of the notice of
motion was simply handed up. No amended pages reflecting the
amendment had been
prepared. Both counsel for the respondents raised
no objection to the proposed amendment and in order to waste no
further time
I granted the amendment.
[3] Counsel for the
applicant then sought a postponement of the application in order to,
as I understood his argument, file further
affidavits. Counsel was
unable to and seemingly failed to enlighten me as to the aspects that
required to be dealt with in the
further affidavits. No grounds for a
postponement of the application were advanced and counsel for the
respondents, in my view,
correctly submitted that a postponement
would, apart from delaying the adjudication of the application, not
serve any useful purpose.
The ensuing argument presented on behalf of
the parties fully dealt with the merits of the application. At the
conclusion thereof
I made the order appearing at the end of this
judgment and indicated that my reasons for the order would be
delivered later. What
follows are those reasons.
[4] Some background
facts. In 2007 the applicant was granted a loan facility by the bank
in the amount of R1 026 000-00
for the purchase of a
residential property described as Erf 388, Kensington B Township, in
the province of Gauteng (the property)
and a bond securing the loan
was registered over the property in favour of the bank. The applicant
is alleged to and indeed admits
having defaulted as early as in 2008,
in making the required payments due under the bond. Pursuant to the
bank’s notice in
terms of
s 129(1)
of the
National Credit Act,
34 of 2005
, the applicant applied for debt review and debt review
proceedings followed but were terminated by the bank on 9 July 2010.
The
bank instituted action against the applicant on 23 July 2010 in
which it claimed payment of the full amount due under the bond,
interest thereon, costs of suit and addition thereto an order
declaring the property specially executable. Service of the summons
was effected by the sheriff on 25 August 2010 by way of affixing a
copy of the summons to the principal gate at the address of
the
property, which was the applicant’s chosen
domicilium
citandi et executandi
. No appearance to defend was entered and
judgment by default in favour of the bank against the applicant for
payment of the sum
of R1 334 947.53, interest thereon,
costs as well as an order declaring the property specially executable
was granted
by the Registrar of this Court, on 12 November 2010. On
12 November 2010 a writ of attachment was authorised and issued. The
warrant
of execution and writ of attachment were served by the
sheriff on the applicant personally, on 13 December 2010.
[5] Three sales in
execution followed. The first on 11 July 2011. It was however,
cancelled by order of this court (Meyer J) and
leave granted for the
property to again be sold in execution. The second on 10 April 2012,
but it was likewise cancelled by order
of this court (Francis J) and
leave granted for the re-sale thereof. Lastly, on 28 November 2013.
On 13 November 2013 a notice
of the sale in execution on 28 November
2013, was served by the sheriff, by way of affixing a copy of the
notice to the principal
door of the house at the property. The third
respondent was the successful bidder at the sale in execution for the
purchase price
of R610 000-00 and the property was subsequently,
on 11 April 2014, transferred into its name.
[6] In June 2014 the
third respondent launched an application for the eviction of the
applicant from the property, in the Magistrate’s
Court,
Randburg. The application was served on the applicant on 5 June 2014.
The applicant filed an answering affidavit in that
application, which
is still pending I assume pending the outcome of this application.
[7] The notice of motion
in the present application is dated 17 June 2014, some two weeks
after service of the eviction application
on the applicant. The
applicant states in the founding affidavit in this application that
she had been informed of the sale in
execution of the property, but
she makes no mention of the date thereof. She further states that she
received a telephone call
from the bank ‘during the course of
2014 June’ advising her that the property had been sold and
that she should make
new arrangements for payment of the shortfall.
[8] The requirements for
obtaining rescission of a default judgment are well-established:
first, the existence of a reasonable and
acceptable explanation for
the default in appearance and second that a
bona fide
defence,
carrying some prospect of success, exists (see
Chetty v Law
Society Transvaal
1985 (2) SA 756
(A);
Silber v Ozen
Wholesalers (Pty) Ltd
1954 (2) SA 345
(A)353). I turn now to
consider whether the applicant has satisfied these requirements.
[9] As for the first
requirement the applicant has failed to advance any explanation for
her default. The applicant does not state
that she did not receive a
copy of the summons. However, in order to deal with the real issue
between the parties, I shall assume
(without deciding) that the
applicant did not receive a copy of the summons which, as I have
alluded to, was affixed to the principal
door of the house where she
was living.
[10] This brings me to
the defence relied on by the applicant. Firstly, reliance is placed
on a Quick Sale Plan agreement (the agreement)
she had concluded with
the bank on 25 March 2011, some 4 months after the granting of the
default judgment. A copy of the agreement
is attached to the papers.
In summary it provides for the bank, on behalf of the applicant, to
sell the property within a marketing
period of 90 days from the date
of signature, and to deduct the proceeds of a successful sale from
the amount owing by the applicant
under the bond and further that the
applicant would remain liable to the bank for payment of any
shortfall. In regard to the agreement
the applicant states ‘that
the agreement was not honoured’ by the bank. The relevance of
the agreement is not dealt
with by the applicant at all. Nor can it
have any relevance to a possible defence. The marketing period
obviously has expired a
long time ago and the property was not sold.
The agreement, in any event, fully reserves the rights of the bank
under the bond
and specifically provides that the ‘foreclosure
action’, should the property not be sold in the marketing
period, ‘shall
continue’.
[11] Finally, the defence
was raised that the default judgment was granted ‘unlawfully’
by which is meant that it was
granted by the Registrar of this court
without judicial oversight, which was held to be unconstitutional by
the Constitutional
Court, in
Gundwana v Steko Development and
others
2011 (3) SA 608
(CC). The default judgment in the present
matter was obtained prior to the declaration of unconstitutionality.
As to the retrospectivity
of the order in
Gundwana
, Froneman J
held:
‘
[57]
But what about retrospectivity? In
Jaftha
,
this Court placed no limit on the retrospectivity of its order. The
declaration of invalidity of the legislative provisions in
that
matter did not entail, however, that all transfers made subsequent to
invalid execution sales were automatically invalid.
Individual
persons affected by the ruling still needed to approach the courts to
have the sales and transfers set aside if granted
by default. This
was made clear in
Menqa
and Another v Markom and Others
.
[1]
A similar approach should be followed here.
[58]
There may be a fear that the decision in this matter will lead to
large-scale legal uncertainty about its effects on past matters
where
homes were declared specially executable by the registrar and sales
in execution and transfers followed. The experience following
Jaftha
may be an indication that this fear is overstated. It must be
remembered that these orders were issued only where default judgments
were granted by the registrar. In order to turn the clock back in
these cases aggrieved debtors will first have to apply for the
original default judgment to be set aside. In other words, the mere
constitutional invalidity of the rule under which the property
was
declared executable is not sufficient to undo everything that
followed.
[2]
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.
[3]
It
may be that in many cases those aggrieved may find these requirements
difficult to fulfil.’
[12]
Save for relying on the alleged unconstitutionality of the default
judgment, the applicant has failed to make out any defence.
The
property was sold to the third respondent and transferred into its
name before this application was launched. The third respondent
was
clearly a
bona fide
purchaser (see
Knox NO v Mofokeng and
others
2013 (4) SA 46
(GSJ) para [5]). This court should
carefully consider the consequences of rescission of the default
judgment (cf
Du Plooy v Anwes Motors (Edms) Bpk
1983 (4) SA
212
(O) 217B, quoted with approval in
Abraham v City of Cape Town
1995 (2) SA 319
(C) 322), which include the nullifying of the
default judgment and the re-registration of the property into the
name of the applicant,
who has since 2008 not shown either a
financial ability to pay the bond instalments or any defence to the
bank’s claim. Finally,
the financial loss the third respondent
will suffer cannot be justified on any basis. I am accordingly
satisfied that no good reason
exists for interfering with the status
quo.
[13] In the result the
following order is made:
1.
The
application is dismissed.
2.
The
applicant is ordered to pay the first and third respondents’
costs of the application.
FHD
VAN OOSTEN
JUDGE
OF THE HIGH COURT
COUNSEL
FOR APPLICANT ADV MS SEBOLA
APPLICANT’S
ATTORNEYS NCHUPETSANG ATTORNEYS
COUNSEL
FOR FIRST RESPONDENT ADV L VAN RHYN VAN TONDER
FIRST
RESPONDENT’S ATTORNEYS LOWNDES DLAMINI
COUNSEL
FOR THIRD RESPONDENT ADV C VAN DER MERWE
THIRD
RESPONDENT’S ATTORNEYS BRUNO SIMAO ATTORNEYS
DATE
OF HEARING 24 FEBRUARY 2015
DATE
OF ORDER 24 FEBRUARY 2015
DATE
OF REASONS 25 FEBRUARY 2015
[1]
2008 (2) SA 120
(SCA). See also
Campbell
v Botha and Others
2009 (1) SA 238 (SCA).
[2]
Oudekraal
Estates (Pty) Ltd v City of Cape Town and Others
2004 (6) SA 222
(SCA) at paras 27-38 and
Bengwenyama
Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and
Others
[2010]
ZACC 26
; Case No CCT 39/10, 13 November 2010, as yet unreported at
paras 81-5.
[3]
Grant
v Plumbers (Pty), Ltd
1949
(2) SA 470
(O)
;
Chetty
v Law Society, Transvaal
1985
(2) SA 756
(A) at 764I-765D; and
De
Wet and Others v Western Bank Ltd
1979
(2) SA 1031
(A) at 1042
.