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[2016] ZAGPJHC 355
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Absa Bank Limited v Ahmanto and Another (29 December 2016) (38858/09) [2016] ZAGPJHC 355 (29 December 2016)
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Certain
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REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA,
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE
NO:
38858/09
Not
reportable
Not
of interest to other judges
Revised.
In the
matter between:
ABSA
BANK
LIMITED
Applicant
and
AHMANTO
HAMID
First
Respondent
THE
SHERIFF OF THE HIGH COURT –
LENASIA
Second
Respondent
JUDGMENT
KLAAREN,
AJ
:
INTRODUCTION
[1]
This is an application by ABSA Bank to declare certain immovable
property (Erf [...]8 Lenasia) owned by the respondent Hamid
Ahmanto
specifically executable and to authorize the Registrar of the Court
to issue a writ of execution against such property.
The
application is based upon a default judgment granted by this court on
6 January 2010, in terms of which Ahmanto is liable to
pay the
amounts of R1 118 604.34, R527 647.33, and
R1 303 130.75 plus interest and costs. The total
without interest and costs is R2 949 382.42.
[2]
The hearing before me raised several issues: whether ABSA has
properly made out its case on its founding papers, whether
the
immovable property was the primary residence of Ahmanto, and whether
ABSA has complied with the proviso to Rule 46(1)(a)(ii).
If the
property is the primary residence of Ahmanto, the proviso to Rule
46(1)(a)(ii) is triggered in an application such as this
where a writ
of execution is sought against the immovable property of a judgment
debtor.
[3] In the view I take of
the matter, aside from the issue of whether the immovable property is
Ahmanto’s primary residence,
ABSA Bank has made its case to
declare the property specially executable. Further, I find
that, if the property is Ahmanto’s
primary residence, then ABSA
Bank has not fully complied with the proviso of Rule 46(1)(a)(ii) and
is not entitled to an order
authorizing the Registrar to issue a writ
of execution. Further, since the papers before me reveal a
dispute of fact whether
the immovable property is Ahmanto’s
primary residence and the resolution of this matter turns on that
narrow issue, I will
refer that issue to oral evidence.
LITIGATION
HISTROY
[4]
ZAHA Investments CC (ZAHA) was a close corporation with members Hamid
Ahmanto and Zheer Ahmanto in the business of manufacturing
coffins.
In 2007 and early 2008, ZAHA entered into a series of loan agreements
with ABSA Bank, giving security to ABSA over
ZAHA’s immovable
properties. Hamid Ahmanto signed a surety agreement on behalf
of ZAHA in favour of ABSA. A further
security in favour of ABSA
was given through a mortgage bond dated 21 February 2008 and
registered over Erf [...]8 which is owned
by Hamid Ahmanto.
[5]
ABSA advanced the monies to ZAHA, but ZAHA did not fulfil its
obligations and went into a liquidation process. ABSA acted
upon Ahmanto’s suretyship agreement. On 6 January 2010,
the court granted a default judgment in case number 38858/2009
against Ahmanto for three claims totalling R2 949 382.42 based on
this suretyship. On 1 June 2010, ZAHA was liquidated and
the
liquidators later made some payments to ABSA.
[6] On
the basis of the 6 January 2010 default judgment, ABSA later caused a
writ of execution for movable assets to be issued against
Ahmanto.
On 22 October 2014 at 16:00, the sheriff attempted to serve a writ of
attachment for movable property on Ahmanto
at Erf [...]8. The
property was unattended. On 23 October 2014 at 8:17, the
sheriff attempted the same and met with
the same result. The
return of service for this date notes “NB: relocated to
the Vaal.” The sheriff
was provided with Ahmanto’s
cellphone number and arranged to meet him at the property. On
30 October 2014 at 7:46,
the sheriff served the writ of attachment
personally on Ahmanto. Ahmanto then stated to the sheriff that
it was impossible
to pay the amount claimed or any sum. The
sheriff issued a
nulla bona
return of service in respect of
the writ of attachment for movable property.
[7]
ABSA commenced the current application with a founding affidavit and
notice of motion in March 2015. On 14 April 2015
at 16:35, the
sheriff attempted to serve the process and failed because the
property was locked. On 15 April 2015 at 11:05,
the sheriff
attempted the same and met with the same result. The sheriff
arranged to meet Ahmanto and on 16 April 2015 at
15:30, the process
was served on Ahmanto at Erf [...]8.
[8] On 23 June 2015,
Ahmanto filed a notice of intention to oppose
in forma pauperis
in terms of Rule 40. He then filed an answering affidavit on 26
June 2015. ABSA on 26 November 2015 filed an application
for
leave to condone the late filing of ABSA Bank’s replying
affidavit, dated 23 October 2015. As noted below, the
delay was
because of investigations made by ABSA regarding the issue of
Ahmanto’s primary residence.
HAS
ABSA ADEQUEATELY SET OUT ITS ENTITLEMENT TO THE DECLARATION OF THE
PROPERTY AS SPECIALLY
?
[9]
ABSA’s first hurdle in this case relates to the state of its
founding papers. Ahmanto argues that ABSA failed to
make clear
what amount is in fact due and owing. This is so, it was
argued, because the founding affidavit only explicitly
mentions one
of the amounts made to ZAHA’s accounts with ABSA by the
liquidators yet three payments were made. The
founding
affidavit acknowledges R850 000 as paid to account 7010043978 on or
about 9 December 2014. This was the proceeds
from the sale of
one of ZAHA’s properties.
[10]
It is common cause, however, that further payments were made.
Ahmanto notes that ABSA admits in its replying affidavit
that
payments of R1 000 000 and R 190 000 were received on various dates
after the liquidation of ZAHA and before the launch of
this
application. On Ahmanto’s argument, these admissions do
not detract from ABSA’s failure to specify as part
of its
founding papers the proper amount due and owing and thus to allege
the case that Ahmanto was to meet. To the extent
that ABSA
depends upon the certificates of balance attached as appendices to
the founding affidavit to provide the specification
of the amount,
Ahmanto disputes their power to function as prima facie proof of the
amount.
[11]
ABSA argues that its founding papers are sufficient. ABSA
points first to three certificates of balances attached as
part of
the founding papers and to the agreement of the parties (expressed in
the loan agreements and the mortgage bonds) that
such certificates
could function as prima facie proof. The certificate of balance
for account number […]02 for 10
February 2015 was R581
406.62. The certificate of balance for account number […]78
on 10 February 2015 was R 1 625
699.71. The certificate of
balance for account number […]36 on 10 February 2015 was R809
748.35. The total was
thus R3 016 854.68.
[12]
Counsel for ABSA further demonstrated that the payments beyond the
R850 000 had also been taken into account by noting that
the
certificate of balance for account number [...]02 (which was not the
ZAHA account into which the R850 000 was allocated)
for 1
January 2010 for the purpose of the default judgment had been
R1 086 143.55, higher than the certificate of balance
for
this account at 10 February 2015 (see above).
[13]
Precedent approving the power of a certificate of balance to function
as prima facie evidence is contained in
Senekal v Trust Bank of
Africa Ltd
1978 (3) SA 375
(A). At 381, the
Senekal
court stated: “It appears to me, however, that the purpose of
adding the words at the end of the certificate clause was to
extend
rather than to limit the scope of applicability of the fundamental
provision that such a certificate was to constitute prima
facie
evidence of the amount of the debt owed to the bank by the principal
debtor. Whenever a bank claims payment of money
said to be
owing to it by a customer who enjoys overdraft facilities on a
current account which fluctuates, possibly from day to
day, it must
needs rely on its books of account and other records of transactions
in order to establish the amount due to it.
To prove every one
of the many entries in the books, which may have been made from time
to time by a large number of different
employees, might for obvious
reasons sometimes be extremely difficult.”
[14]
At 382E, the
Senekal
court further stated: “We are
not now concerned, however, with the questions whether the
certificate itself, read with
the deed of suretyship, would have
rendered the claim sufficiently liquid to entitle the respondent to
provisional sentence, but
with the question whether such a
certificate can have value in the sense of constituting prima facie
evidence of the amount of
the indebtedness in proceedings such as
were instituted by respondent, and to that question the answer
appears to me, on construction
of the agreement, to be “Yes”.”
In line with
Senekal
, ABSA argued that the presence of
evidence rebutting the accuracy of the certificates does not destroy
their admissibility but
rather diminishes the sufficiency of the
proof afforded to the certificate.
[15]
As noted above, the power of the certificates of balance to function
as prima facie evidence is a matter of construction of
the
agreement. Counsel for Ahmanto argued that Senekal should be
distinguished from the case at hand. In Senekal, the
use of
certificates was prior to a judgment, whereas the use here would be
after a judgment. There is however nothing in
the loan
agreements or the mortgage bonds to suggest that the certificates of
balance are not prima facie proof after judgment.
For instance,
clause 29 of the loan agreement applicable to account number [...]36
provides: “A certificate signed
by a manager of the Bank
specifying the interest rate(s) applicable to the Loan and/or the
amount owing by the Borrower to the
Bank and further stating that
such amount is due, owing and payable by the Borrower to the Bank,
shall be prima facie proof of
such applicable interest rate(s) and/or
the amount of such indebtedness and of the fact that such amount is
due, owing and payable,
for the purpose of obtaining provisional
sentence or other judgement in any competent court, as well as
execution under the Mortgage
Bond and it shall not be necessary to
prove the appointment of the person signing any such certificate.”
Likewise,
clause 9 of the mortgage bond issued over Erf [...]8
provides: “Proof of indebtedness: 9.1 The
amounts
at any time owing by the Mortgagor to the Bank which are
secured under this bond (including any interest and the rate or rates
at which and the period or periods for which interest is calculable)
and the fact that such indebtedness is due and payable may
be
determined and proved by a certificate signed by any manager of the
Bank, whose appointment and authority to sign such certificate
need
not be proved. 9.2 Such certificate shall be accepted as
proof of the facts stated therein, unless the Mortgagor
is able to
prove the facts incorrect.”
[16]
On the basis of the certificates of balance provided, ABSA did make
out an adequate and sufficient case in its founding papers
for the
declaration of the property as specially executable.
[17]
Assuming that Erf [...]8 is Ahmanto’s primary residence, has
ABSA adequately canvassed and brought before court Ahmanto’s
legally relevant circumstances?
[18]
In my reading of the papers, it is ABSA’s case that it wishes
to prove that the immovable property is not the primary
residence of
Ahmanto, not that it might be his primary residence. In
its application, ABSA stated in para 11.1 of its
founding affidavit
that it did not know whether the property was the primary residence
or not. That paragraph reads:
“It is unknown to the
applicant whether the property constitutes the first respondent’s
primary residence as envisaged
by the provisions of Rule 46(1) of the
Rules of the above Honourable Court. The Sheriff of the High
Court Lenasia did however
note[] in the return of service annexed as
Annexure “AB15” that the first respondent relocated to
the Vaal. It
does therefore appear that the first respondent no
longer resides at the premises.”
[19]
Further, ABSA averred in para 11.5: “In the event of the
first respondent alleging that the property is his primary
residence,
he is hereby notified of his rights in terms of Section 26(1) of the
Constitution of the Republic of South Africa which
provides that
everyone has the right to have access to adequate housing and he is
hereby advised that it is incumbent upon them
to place information
before the above Honourable Court in order to specify any reason why
his rights to adequate housing would
be infringed, should the above
Honourable Court grant an order in terms of the Notice of Motion.”
[20]
Where the immovable property against which a writ of execution is
sought is the primary residence of the judgment debtor, special
protections are provided and special practices must be followed in
terms of Rule 46(1)(a)(ii). As this court has noted in
Jordaan
& Wolberg Attorneys v Morgan
,
“[t]he effect of the proviso is that only a court is competent
to declare any or all of a judgment debtor’s residential
immovable property specially executable under the provisions of Rule
46(1)(a)(ii). If such residential property consists
of the
judgment debtor’s primary residence, the court has, in terms of
the proviso to Rule 46(1)(a)(ii), to consider all
relevant
circumstances before ordering execution against such property.
In deciding whether or not to declare the primary
residence of a
judgment debtor who is a natural person specially executable, the
court must consider all relevant circumstances
as contemplated in the
sub-rule. This means ‘legally relevant
circumstances’.”
[1]
In that case, Adams AJ set out the general analysis to be used in a
matter involving a primary residence and applied that
analysis to the
circumstances there.
[2]
[21]
These special protections and practices have been mandated and
elaborated in the Constitutional Court judgments of
Jahta
v Schoeman & Others
[3]
and
Gundwana
v Steko Development CC
,
where for instance lower courts have been cautioned that “in
allowing execution against immovable property, due regard should
be
taken of the impact that this may have on judgment debtors who are
poor and at risk of losing their homes. If the judgment
debt
can be satisfied in a reasonable manner, without involving those
drastic consequences, that alternative course should be judicially
considered before granting execution orders.”
[4]
[22]
In the practice of this court, these special practices are
encapsulated in Chapter 10.17 of the Gauteng, Johannesburg Practice
Manual (Erasmus Superior Court Practice, January 2010, RS 1, 2015,
H3-100F) “Foreclosure (and Execution When Property Is,
or
Appears to Be, the Defendant’s Primary Home”. ABSA
has not filed an affidavit as called for in Chapter 10.17
of the
Practice Manual.
[23] While counsel for
ABSA argued that even if Erf [...]8 is Ahmanto’s primary
residence that the legally relevant circumstances
have been set out
in the papers and the writ should issue, ABSA’s primary case
was that this property is not Ahmanto’s
primary residence and
such relevant circumstances need not be fully considered. The
information that ABSA did set out regarding
Ahmanto’s
circumstances was relatively scant. ABSA noted that the
property was not acquired by means of or with the
assistance of a
state subsidy and that ABSA believes Ahmanto is still employed and
can afford alternative accommodation.
This information does not
measure up to the legally relevant circumstances as required by the
proviso to Rule 46(1)(a)(ii).
IS
ERF [...]8 THE PRIMARY RESIDENCE OF AHMANTO
?
[24]
As noted above, ABSA’s founding affidavit avers on the basis of
the returns of service that the property is not Ahmanto’s
primary residence. Ahmanto answered in his affidavit, stating
in para 32: “The Property constitutes a primary
residence
of myself, my partner, Riana (aged 55) my divorced daughter, Sabjee
Fahiza (aged 35 years) and her two minor children,
Lutfiya (aged 13
years) and Mohamed (aged 8 years).” Ahmanto also stated
in para 34: “Given my inability
to earn an income, the
Property was partitioned and I took in a tenant who conducts a spaza
shop from the other portion of the
Property and pays rent which, in
turn, I pay to maintain my bond obligations in favour of the
Applicant under bond account no.
B010716/08.” There is
some ambiguity in Ahmanto’s averment. He states that the
property is “a”
primary residence of himself and the four
others, not “the” primary residence of these persons.
[25]
ABSA’s replying affidavit denied that the property was
Ahmanto’s primary residence. ABSA noted that the averment
was unsupported by documentary evidence and was not confirmed by any
of the persons alleged to be occupying with him.
[26]
Further, ABSA has brought forward evidence (beyond the return of
services) that it argues demonstrates that the property is
not
Ahmanto’s primary residence. After receipt of Ahmanto’s
answering affidavit, ABSA appointed a specialized
firm, Precision
Tracers and Debt Collector (Precision Tracers), to investigate
whether the property was the primary residence of
Ahmanto.
Precision Tracers conducted on-site investigations through
observation of the property over several days.
ABSA relied upon
this report dated 30 September 2015 in its replying affidavit and
attached the report there. One of the
findings of the report
(which was two pages of text and several pages of documents) was that
“Mr Ahamanto [sic] is not residing
at 76 Shaba Road, but locals
confirm they know him and he is often seen at the shop.”
Precision Tracers also reported
to ABSA that Ahmanto “might be
residing” at a property in Ennerdale, “him being the
owner of this property, as
per Windeed enquiry conducted after we
received this information from the locals.” Ahmanto has
of course not had an
opportunity to probe this evidence.
[27]
As regards the definition of primary residence in these circumstances
binding in this matter, the court in
FirstRand
Bank v Folscher
pertinently stated: “The judicial oversight that must be
exercised is therefore limited to those instances where the
execution
order relates to the debtor's principal or -usually - the only
dwelling the judgment debtor owns. Execution against a
holiday home
or a second house that is not usually occupied by the debtor does not
trigger the application of the Rule.”
[5]
[28]
The usual rule in motion proceedings where there is a dispute as to
the facts is that a final order should only be granted
if the facts
stated by the respondent, together with the admitted facts in the
applicant’s affidavit, justify the order.
This is the
case at least where the allegations or denials put forward by the
respondent are not bare or unsubstantiated.
[29]
There is certainly not much detail nor supporting evidence along the
lines that one would expect to find with respect to a
property that
was one’s primary residence – in the sense of a house
that is usually occupied by the debtor (and, it
is alleged, four
other members of his family). Still, it is hard to term the
allegation that this is Ahmanto’s primary
residence as bare or
far-fetched. He has alleged it is such, not only for himself
but for four other members of his family.
He is evidently known
in the area. He has made arrangements to accept service at this
premise on several occasions.
In his answering affidavit, he
averred that the property was partitioned in order to meet expenses,
after being purely residential.
[30]
After the hearing in this matter was concluded, I invited the parties
to make further brief submissions on the assumption that
the
affidavits filed reveal a dispute of fact on the issue whether or not
Erf [...]8 is the primary residence of Mr Ahmanto.
The parties
were to indicate and address whether an order in terms of Rule
6(5)(e) (another round of affidavits) or Rule 6(5)(g)
(referral of
the issue to oral evidence). Submissions were received from
both parties.
[31] I
agree with the argument made by ABSA that the filing of a further
affidavit or round of affidavits is not appropriate at
this stage in
this case. It is further common cause that the referral to oral
evidence falls within the discretion of this
court.
[32]
In my estimation, the situation is one where the preponderance of
probabilities favours the applicant, ABSA. In terms
of Kali v
Decotex, it is thus one that favours referring the issue to oral
evidence.
[33]
On this issue, I have come to the conclusion that the papers
establish a dispute of fact on the issue whether or not the property
at issue is the primary residence of Ahmanto. The issue of
whether the immovable property is or is not the primary residence
of
Ahmanto is the sole and the dispositive issue remaining. In my
view this is a sufficiently narrow albeit critical issue
that it may
be referred to oral evidence in terms of Rule 6(5)(g).
[34]
If the immovable property is Ahmanto’s primary residence, then
the application should be dismissed, because ABSA has
not canvassed
the legally relevant circumstances for such a situation in terms of
the proviso to Rule 46(1)(a)(ii). If the
immovable property is
not Ahmanto’s primary residence, then the application should be
granted and the property declared specially
executable and the
Registrar authorized to issue a writ in execution.
[35]
Accordingly I make the following order –
1.
That
the affidavits filed to date reveal a dispute of fact on the question
whether or not Erf [...]8 (“the immovable property”)
is
the primary residence of the first respondent.
2.
That
the application in regard to the immovable property is referred for
the hearing of oral evidence at a time to be arranged with
the
Registrar, on the question as to whether the immovable property of
the first respondent is the first respondent’s primary
residence or not.
3.
The
evidence shall be that of any witnesses whom the parties or any of
them may elect to call, subject, however to paragraph 4.
4.
Save
in the case of witnesses who have already deposed to affidavits, no
party shall be entitled to call any witness unless:
a.
It
has served on the other parties at least 15 days before the date
appointed for the hearing a statement wherein the evidence to
be
given in chief by such person is set out; or
b.
The
Court, at the hearing, permits such person to be called despite the
fact that no such statement has been so served in respect
of his
evidence.
5.
Any
party may subpoena any person to give evidence at the hearing,
whether such person has consented to furnish a statement or not.
6.
The
fact that a party has served a statement in terms of paragraph 4
hereof, or has subpoenaed a witness, shall not oblige such
party to
call the witness concerned.
7.
Within
30 days of the making of this order, each of the parties shall make
discovery, on oath, of all documents relating to the
issue referred
to in paragraph 2 hereof, which are or have at any time been in the
possession or under the control of such party.
8.
Such
discovery shall be made in accordance with Rule 35 of the Uniform
Rules of Court (“the Rules”) and the provisions
of that
Rule with regard to the inspection and production of documents
discovered shall be operative.
9.
The
provisions of Rule 37 shall be operative in respect of the hearing of
oral evidence as if it were a trial.
10.
The
incidence of the costs incurred to date in respect of the application
against the first respondent, save for costs orders already
granted
in favour of any party, shall be reserved for determination after the
hearing of oral evidence.
Counsel
for the Applicant:
Counsel for the First
Respondent:
E Keeling
_________________________________________________
J
KLAAREN
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
APPLICANT’S
COUNSEL
E
EKSTEEN
INSTRUCTED
BY
JAY MOTHOBI INC
FIRST RESPONDENT’S
COUNSEL
E KEELING
INSTRUCTED BY
KEVIN HYDE ATTORNEYS
DATE OF
HEARING
DATE OF
JUDGMENT
29 DECEMBER 2016
[1]
Jordaan
& Wolberg Attorneys v Morgan (2013/1814) [2015] ZAGPJHC 272 (11
November 2015), 21
–
23,
accessed October 15, 2016.
[2]
Ibid.,
paras. 20
–
27.
[3]
Jaftha
v Schoeman and Others, Van Rooyen v Stoltz and Others (CCT74/03)
[2004] ZACC 25
; 2005 (2) SA 140 (CC)
[2004] ZACC 25
; ;
2005 (1) BCLR 78
(CC) (8
October 2004), accessed October 15, 2016.
[4]
Gundwana
v Steko Development CC and Others (CCT 44/10)
[2011] ZACC 14
;
2011
(3) SA 608
(CC);
2011 (8) BCLR 792
(CC) (11 April 2011), 53,
accessed November 21, 2016.
[5]
FirstRand
Bank v Folscher
2011 (4) SA 314
(GNP); [2011] ZAGPPHC 79 (24 May
2011), 30, accessed October 19, 2016.