About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2016
>>
[2016] ZAGPJHC 176
|
|
Motake and Another v Nedbank Limited (2015 / 21199) [2016] ZAGPJHC 176 (24 June 2016)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT
OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE
NO:
2015 / 21199
In
the matter between:
AGENTE
EZEKIEL
MOTAKE
.........................................................................................
1st
Applicant
LIZIWE
JOYCE
MOTAKE
.............................................................................................
2nd
Applicant
And
NEDBANK
LIMITED
...........................................................................................................
Respondent
JUDGMENT
MASHILE
J
[1]
On 31 July 2014, this Court per Sutherland J granted a default
judgment in favour of the Respondent and against the Applicants.
By
this application, the Applicants now seek to rescind the judgment.
The rescission application seems to be premised on the provisions
of
Uniform Rule of Court 42(1)(a) insofar as the Applicants allege that
it was erroneously sought or erroneously granted in their
absence.
[2]
This matter stems from the following factual background:
2.1
The Applicants and the Respondent concluded a loan agreement, which
was subsequently secured by the registration of a mortgage
bond over
the immovable property of the Applicants on 26 January 2006;
2.2
As a result of the Applicants experiencing financial problems, in
December 2010 they entered into a distressed restructure agreement
(hereinafter “the agreement”) with the Applicants.
In terms of the Agreement, their existing indebtedness owed
to the
Respondent was restructured to accommodate their financial
predicament in a manner that would assist them to continue to
honour
their commitments and perform in line with their obligations arising
from the mortgage bond as read with the loan agreement;
2.3
It is significant to highlight certain clauses of the agreement for
purposes of this judgment. Thus, in terms of the agreement:
2.3.1
the Applicants chose as their
domicilium citandi et executandi
30 Ashdown Forest, Aitken Road, Eden Glen;
2.3.2
should the Applicants breach any condition contained in the
agreement, or should they breach a condition of any other agreement
with the Respondent, the latter would have the right, to the extent
permitted by the Act, to claim repayment of the Loan or the
balance
thereof outstanding, which would thereupon become immediately due and
payable, together with interest and all other amounts
owing to or
claimable by the Respondent in terms of the restructure agreement,
and to have the immovable property declared specially
executable;
2.3.3
all amounts owing to or claimable by the Respondent from the
Applicants would, at the option of the Respondent and to the
extent
permitted by the Act, become immediately due and payable without
notice in the event that the Applicants failed to pay on
demand any
sum or sums of money owing to or claimable by the Respondent in
respect of any indebtedness of the applicants towards
the Respondent
from whatever cause arising. Any failure by the Applicants to
effect payment as aforesaid would constitute
a breach of the
agreement;
2.3.4
the mortgage bond would secure inter alia the Applicants’
indebtedness to the Respondent in terms of the agreement as
well as
all present and future indebtedness of the Applicants to the
Respondent, from whatever other cause arising, together with
interest, and would remain of full force and effect until cancelled
in the deeds registry notwithstanding any fluctuation in, or
temporary extinction of, the Applicants’ indebtedness to the
Respondent from time to time;
2.3.5
the Applicants would be responsible for all costs on the attorney and
client scale
2.4
The applicants failed to observe the terms of the agreement by
falling into arrears with their monthly mortgage bond instalments.
Exercising its rights arising from the agreement in the event of
infringement, the Respondent invoked and enforced the provisions
of
the agreement;
2.5
In November 2013, the Respondent embarked on the process of
recovering the debt by sending notices in terms of section 129 of
the
National Credit Act no. 34 of 2005 (“the Act”) to the
Applicants. The notices were sent by registered post to the
chosen
domicilium
address of the Applicants, which is also their
admitted residential address. The track and trace report issued
by the Eden
Glen Post Office shows that on 7 November 2013 the
aforesaid post office, which was responsible for handling and
delivery of the
notices sent out a first notification to the
Applicants to collect the notices;
2.6
The Applicants did not collect the Section 129 notices at the Eden
Glen post office. The Applicants failed to bring their arrears
up to
speed, a failure which prompted the Respondent to persist with the
debt recovery process by launching motion proceedings
on 13 December
2013;
2.7
On 15 January 2015, the application was personally served on the
Applicants. The Notices in terms of Section 29 of the
Act were
also delivered as part of the application because they were annexures
thereto. Even after the service of the papers,
the Applicants
neither opposed the application nor settle their arrears;
2.8
Seeing that the application was unopposed, the Respondent set it down
for hearing and the date allocated was 29 APRIL 2014.
The
returns of service, which are attached to the answering affidavit of
the Respondent, serve as confirmation of service of the
Notice of
Setdown upon the Applicants. To stall the hearing of the
application on 29 April 2014, the Applicants made part
payment of
their arrears on the date of hearing;
2.9
The part payment only meant that the arrears were reduced but a
substantial part remained owing. The Applicants recorded
the
payment made by them on 29 April 2014 in writing and on 26 May 2014,
the Respondent confirmed the contents of the recorded
payment in a
‘without prejudice letter’ as follows:
“
Home
loan account number: [8……….]
Total
arrears: R102793.49
Monthly
Instalment: R9357.43
AGREEMENT
TO PAY OVERDUE ACCOUNTS
We
confirm the agreement between you and the bank for payment of the
arrear instalments on your home loan. Payment of overdue amounts
is
included in the undermentioned instalment.
Monthly
arrears repayments: R102 793.49
Normal
monthly payment: R9357.43
Revised
arrangement amount:R10000.00
Revised
amount payable monthly on: 27/05/2014
When
the repayment of the arrears amount is up to date, your normal
instalment will once again become payable. Should you not adhere
to
this interim arrangement, we shall institute proceedings for the
recovery of your indebtedness.”
2.10
The letter constitutes a confirmation that notwithstanding the part
payment on 29 April 2014, the Applicants were still
in arrears with
their mortgage bond instalments in the amount of R102 793.49 on 26
May 2014. It also advised the Applicants
of the revised monthly
instalments of R10 000.00 starting from 27 May 2014;
2.11
The letter also warned the Applicants of the perils of not adhering
to the payment arrangement. In essence, they
were admonished
that the Respondent would proceed with the application to recover the
debt in the case of breach.
Subsequent to that arrangement, the
Applicants failed to perform as envisaged in the payment arrangement
of 26 May 2014 as they
made no payment on 27 May and June 2014;
2.12
As a result of the breach as aforesaid, the Respondent set the
application down for hearing on 31 July 2014. It
is evident
from the returns of service that the sheriff effected personal
service of the Notices of Set Down upon the Applicants.
On 31
July 2014, this Court, per Sutherland J, granted default judgment in
favour of the Respondent;
2.13
Following the order of Sutherland J, the Registrar issued a writ of
attachment. On 24 October 2014, the property
was attached by
the sheriff of Germiston North. The sheriff recorded that
simultaneously with the execution of the warrant,
he served copies of
the warrant of execution and the writ of attachment personally upon
the Second Applicant;
2.14
A sale in execution of the property was then arranged for 3 December
2014. On that day, the Respondent purchased
the property.
The total outstanding arrears at the time of the sale in execution
was R148 000.00.
[3]
From these facts, which are largely common cause and in any event,
must be accepted in light of the absence of a replying affidavit,
this Court must decide whether or not the Applicants have set out
sufficient grounds entitling them to have the judgment of 31
July
2014 set aside.
[4]
The Applicants contend, in the first place that the judgment was
erroneously sought or erroneously granted by this Court, and
in the
absence of both the Applicants. In their endeavour to establish
the above, the Applicants also argued that their failure
to oppose
the application does not constitute wilful default.
[5]
The Applicants also asserted that by the conclusion of the payment
arrangements, they settled their arrears. The conclusion
of the
agreement and the arrangement of 26 May 2014 prohibited the
Respondent from proceeding with the application. In consequence
of the settlement of the arrears in the manner described, the sale in
execution is a nullity and falls to be set aside.
[6]
The Respondent on the other hand has fervently asserted that the
application stands to be dismissed because the Applicants were
clearly in wilful default and that both the agreement and the
arrangement of May 2014 were infringed by the Applicants triggering
it to take appropriate legal steps to recover the debt. This
being the position, the sale in execution was valid and accordingly
cannot be set aside.
[7]
Rule 42(1)(a) reads:
“
The
court may, in addition to any other powers it may have, mero motu or
upon the application of any party affected, rescind or
vary:
(a)
an order or judgment erroneously sought or erroneously granted in the
absence of any party affected thereby;”.
[8]
The question is therefore, was the judgment erroneously sought or
erroneously granted in the absence of the Applicants?
The
Applicants vigorously protested that the Respondent utilized an
incorrect address being 14 Richgrove, Van Tonder Road,
Edenvale
on those occasions when it meant to draw their attention to the
arrear account. I guess that the argument is that
had
Sutherland J been aware that the address used by the Respondent was
not the domicilium address, he would not have granted the
judgment.
1.
[9] Admittedly, it might well have been
that the address was incorrect, , but what is patent is that
the notices were sent
to the Applicants’
domicilium
address on 4 November 2014 by registered mail. The Eden Glen
post office, the post office responsible for the area of the
Applicants, issued the first notice calling on the Applicants to
collect the notices but they did not heed the call. Moreover,
the notices were delivered together with the motion papers when they
were served on the Second Applicant on 15 January 2014.
See the
unreported case of this Court of
SA Taxi
Development Finance v Phalafala C
ase
Number 1512/2013.
(10]
The Applicants therefore could have known as early as the second week
of November 2013 that the Respondent was intending
to initiate legal
proceedings for the recovery of the debt and/or declaring the
property specially executable. According
to
Kubyana
v Standard Bank of South Africa Ltd
2014 (3) SA 56
(CC)
the issuing of the notice calling upon a debtor to collect is
sufficient to impute knowledge of the notice. Whether or not
the affected party collects is irrelevant. In the
circumstances, the Applicants knew about the notices and in any event
they also came to know about it on 15 January 2014 when the papers
were served.
[11]
No doubt exists that the Applicants knew about the enrolment of the
application on 29 April 2014 otherwise it would be
enigmatic why they
made payment on that day. I fully agree with the Respondent
that the payment made by the Applicants on
that day constitutes
knowledge of the arrears. A further acknowledgment of their
arrears is manifested in the arrangement
that they made with the
Respondent on 26 May 2014. Such arrangement would not have been
necessary if they were not behind
with their monthly mortgage bond
instalments.
[12]
There is proof that the Applicants were aware that the application
was to be heard on 31 July 2014 and yet they did nothing
about it.
This is evident from the service of the Notice of Set Down by the
sheriff on 24 June 2014 on the Second Applicant.
Again, the
Applicants knew that the application would be coming before this
Court and deliberately elected not to attend court
on 31 July 2014.
Naturally, the Respondent caused the Registrar to issue a writ of
attachment as per the order of Sutherland
J. When the sheriff
executed the writ of attachment he at once served the writ of
attachment and the warrant of execution
on the Second Applicant.
The Applicant cannot be believed that they did not know about the
sale of the property especially
because they knew that it had been
attached.
[13]
Rule 42(1)(a) cannot avail a party who deliberately avoid to attend
court so that he can later raise it when faced with
a judgment
against him. The error contemplated in the Rule must be such
that if the presiding judge had known about it, he
would not have
granted an order. In this matter, it is obvious that the
Applicants having been properly advised at every
stage of the
process, the Court was entitled to grant the judgment. The
Judgment could not have been granted in error.
[14]
Even if this rescission application was launched in terms of common
law or Rule 31, it would still have failed as it
does not satisfy the
requirements envisaged at common law or under Rule 31. It is
trite that an applicant in an application
for rescission of judgment
must show good cause in order to succeed. See
Chetty
v Law Society Transvaal
1985 (2) SA 756
(A) at 765.
[15]
It is an ingredient of good cause that the element of wilfulness is
absent. See
Maujean t/a Audio Video Agencies v
Standard Bank of S A Ltd
1994 (3) SA 801
C at 803 J.
The
requirements for an application for rescission have been stated as
follows in the case of
[1]
De Witts Auto Body Repairs (Pty) Ltd v Fedgen Insurance Co
Ltd
1994 (4) SA 705
E at 708 H to 709 D
:
15.1
One must give a reasonable explanation for one’s default. If it
appears that one’s default was wilful or
that it was due to
gross negligence the Court should not come to one’s assistance;
15.2
One’s application must be
bona fide
and not be made with
the intention of merely delaying the plaintiff’s claim;
15.3
One must show that one has a
bona fide
defence to the plaintiff’s claim.
It is sufficient if one makes out a
prima
facie
defence in the sense of setting
out averments which, if established at trial, would entitle one to
the relief asked for. A party
need not deal fully with the merits of
the case and produce evidence that the probabilities are actually in
that party’s
favour.
[16]
Thus, in
Silber v Ozone Wholesalers
(Pty) Ltd
1954 (2) S345 A at 352 it was
held that g
ood cause
includes but is not limited to the existence of a substantial
defence. Where an applicant has provided a poor explanation
for
default, a good defence may compensate. The Court has a wide
discretion in evaluating “
good
cause”
in order to ensure that
justice is done. The object of rescinding a judgment is “
to
restore a chance to air the real dispute.
[17]
The facts demonstrate that the Applicants wilfully ignored to defend
the Application. The Application was served
on the Second
Applicant on 15 January 2014 yet they did nothing, reacting only on
the date of hearing of the 29 April 2014 when
the hearing was about
to proceed.
[18]
If it were brought in terms of Rule 31, the 20 day period within
which the Applicants should have launched the application
would have
found application. Needless to mention that the Applicants
launched this application outside of the 20 day period.
[19]
The Applicants disclose no bona fide defence in the papers.
There are a whole lot of other irrelevant defences
that the
Applicants raised in their heads but this Court is not prepared to
entertain any of them because they were not raised
in their papers.
One of them concerns whether or not this matter should have been
brought to court by way of motion or action.
Quite honestly, it
is this Court’s opinion that the argument of the Applicants is
totally misguided insofar as they contend
that these proceedings
should have been by way of action.
[20]
It is also significant to note that while the Applicants claim that
the application is on the basis of Rule 42(1)(a),
the founding
affidavit does not show in what manner is it alleged that it was
granted in error. The attempt to do so is only
in the heads.
The only other defence that they raised is that the arrangement of 26
May 2014 constitutes a settlement of their
arrears.
[21]
The Applicants allege that it was contemplated in that arrangement
that he would commence payment at the end of September
2014.
However, a perusal of the letter reveals that it was concluded on 26
May 2014 and payment of R10 000.00 was expected
the following day, 27
May 2014. The Applicants failed to pay in May and June hence
the placing of the matter on the roll
of 31 July 2014. As a
matter of fact, the Applicants concede that their arrears stood at
R148 000.00 in December 2014.
[22]
It is preposterous to suggest that the conclusion of the arrangement
without accompanying payments being the obligations
that arose as a
result was sufficient to put litigation in abeyance. The
understanding was that the Applicants would abide
by the terms of the
arrangement. their non-adherence to the arrangement caused the
litigation to proceed culminating of course
in the granting of the
judgment.
[23]
The Applicants have failed to disclose grounds that would enable them
to be entitled to a rescission of this Court dated
31 July 2014.
In the circumstances, the application fails and I make the following
order:
1.
The application is dismissed with costs as at the scale between
attorney and client.
B
A MASHILE
JUDGE
OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
COUNSEL
FOR THE APPLICANT: A E MOTAKE
INSTRUCTED
BY: AGENTE EZEKIEL MOTAKE
COUNSEL
FOR THE RESPONDENTS: L VAN RHYN VAN TONDER
INSTRUCTED
BY: LOWNDES DLAMINI
DATE
OF HEARING: 10 May 2016
DATE
OF JUDGMENT: 24 June 2016