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[2017] ZAGPJHC 357
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Ferreira and Another v Nedbank Limited and Another (45240/16) [2017] ZAGPJHC 357 (24 November 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER: 45240/16
Not reportable
Not of interest to other
judges
Revised.
24 Nov 2017
In
the matter between:
RIAN
FERREIRA
1
st
APPLICANT
HELEN
HEATHER
FERREIRA
2
nd
APPLICANT
and
NEDBANK
LIMITED
1
st
RESPONDENT
SHERIFF
OF THE HIGH COURT: HEIDELBERG
2
nd
RESPONDENT
JUDGMENT
AJ
PATHER:
Introduction
[1]
The first applicant is Rian Ferreira.
[2]
The second applicant is Helen Heather Ferreira.
[3]
The applicants are married to each other in community of property.
The first
applicant
represents them in these proceedings.
[4]
The first respondent is NEDBANK LIMITED, cited as being a general
bank and credit provider, carrying on business as such at
135 Rivonia
Campus, 135 Rivonia Road, Sandown, Sandton.
[5]
The second respondent is the Sheriff, Heidelberg, GAUTENG.
[6]
This is an application for rescission of the judgment granted against
the applicants on 19 August 2016. The applicants submit
that the
application is brought either under Rule 31 (2)(b), Rule 42 (1)(a) or
the common law, as all three have application in
so far as they
allege that the judgment was granted in their absence as a result of
defective service.
[7]
Broadly the applicants seek an order:
1.
condoning
the late filing of this application;
2.
rescinding
the default judgment granted by Yacoob AJ on 19 August 2016 for
payment of the sum of One Million Four Hundred and Fifty
Five
Thousand Four Hundred and Forty Two Rands and Fifty Three Cents
(R1 455 442,53) together with interest;
3.
interdicting
the respondents from proceeding with the sale in execution pending
the final determination of the matter;
4.
staying
the writ of execution pending the final determination of the matter;
and
5.
that
they be allowed to submit such further evidence and documents as
referred to in the founding affidavit.
[8]
The first respondent opposes the application and seeks that the
rescission application be dismissed with a punitive costs order.
Background
[9]
During 2008 the applicant and the first respondent entered into a
home loan agreement secured by a mortgage bond (the bond)
registered
over the applicants’ property (the subject property) in favour
of the first respondent. It is common cause that
the applicants fell
into arrears with their monthly instalments under the bond and in
June 2010 the parties entered into a debt
restructuring agreement.
Between then and May 2016, there were various interactions between
the parties, which included the first
respondent’s providing
the applicants with Nedbank Assisted Sale (NAS) mandates. In terms of
the NAS mandates, the first
respondent would assist the applicants in
marketing the subject property through estate agents in an attempt to
sell it. During
this period too, and on 29 August 2014, the first
respondent had already instructed its attorney to commence legal
action against
the applicants, as the last payment made by the
applicants towards the bond was on 14 March 2014.
[10]
As the property had not been sold, a further extended NAS mandate was
offered to the applicants on 25 April 2016, which was
only signed on
23 May 2016. The first respondent accepted this on the basis that
legal action against the applicants would continue
as their account
was by then twenty-three months in arrears.
[11]
Summons was served on 14 June 2016 by affixing it to a gate on the
subject property. The action was however not immediately
pursued due
to the extended NAS mandate that the applicants had signed. On 27
July 2016, the first respondent sent an email communication
to the
applicants advising that as an offer which had been received on the
subject property had fallen through and further that
the extended NAS
mandate had expired, legal action would be continued. This was
followed by a detailed message left for the
applicants
on a cell phone number when the cell phone went into voicemail
service.
[12]
On 28 September 2016, the first applicant was telephoned on another
cell phone number and informed of the judgment by default
and that
the property had been attached. During the conversation, he informed
the first respondent’s representative that
the tenants who were
occupying the property were interested in purchasing it.
The
issues
[13]
The applicants base their application for rescission on the following
grounds:
13.1 they did not have
knowledge of the judgment as it had been granted by default in their
absence;
13.2 the legal action
previously instituted by the first Respondent during 2014 and which
they, the applicants had opposed was pending;
13.3 the Application for
Default Judgment was fatally defective in that the Commissioner of
Oaths was employed by a firm of attorneys
who are on the first
respondent’s panel of attorneys. The Commissioner of Oaths, so
it was contended, was, under the provisions
of regulation 7(1) of the
Regulations Governing the Administering of an Oath or Affirmation,
prohibited from commissioning affidavits
by employees of the first
respondent relating to disputes in which the first respondent was a
party;
13.4 the judgment amount
includes amounts which the first respondent is not entitled to claim,
such as legal fees, interest and
amounts for the periods during which
the applicants were participating in the NAS. It was contended that
the first respondent’s
representatives had at the time they had
originally offered the NAS programme to the applicants, indicated to
them that they, the
applicants were not required to make payments
towards the bond during the period of participation in the NAS
programme;
13.5 in granting the
credit agreement, the first respondent had granted the applicants a
loan amount secured by the bond, “at
what appears” to
have been in excess of the value of the subject property. In other
words, the first respondent in doing
so, had participated in a
Reckless Credit Agreement. It was also contended that the subject
property would not fetch the amount
of the bond and that generally
properties in that area sold for below their values; and
13.6
the judgment against the applicants and the attachment and proposed
sale in execution of the property were unconstitutional.
In this
regard, and as stated by the first respondent, whole sections of the
Constitution of the Republic of South Africa, 1996,
have been quoted.
[14]
In regard to the application to stay the writ of execution, the
applicants state that in addition to the grounds listed for
the
rescission application, they would suffer irreparable harm if the
property is sold on auction. They would not be able to let
the
property at a market-related value, would be deprived of the
opportunity at market value, would be prevented to return to the
property as they had intended and be able to resume full payments of
the bond if they reside in the property. Furthermore, they
contend
that if the stay of the writ is not granted they would be forced to
bring additional applications to prevent the property
from being
transferred, presumably to a buyer, while court applications are
being fought.
[15]
The applicants repeat most of the above grounds in their submission
that they would be prejudiced if the application for rescission
and
other relief is not granted. They claim further that they would
eventually be liable for a debt that is in contravention of
the
National Credit Act, 2005
.
[16]
The first respondent referred to a previous urgent application on the
same set of facts as in this matter, brought by the applicants,
which
application was struck from the roll by Molahlehi J on 15 November
2016 for lack of urgency. The applicants were ordered
to pay the
costs. Instead of enrolling that application for adjudication on the
merits, the applicants proceeded to issue the application
which is
the subject of this judgment. Despite the first respondent’s
request that they should either withdraw this application
or the
urgent one because of the irregularity, the applicants failed to do
so.
[17]
The first respondent chose not to pursue its own plea of
lis
pendens
against the applicants. However, in answer to that of the
applicants’, the first respondent stated that it did not pursue
the earlier action, but had issued summons in June 2016 as mentioned
earlier in this judgment. The first respondent undertook to
file a
Notice of Withdrawal at the hearing of this matter. This issue is now
academic.
[18]
In dealing with the merits of the application, the first respondent
has provided a comprehensive answer, detailing the interventions
made
when the applicants fell behind with their bond repayments, and the
several attempts made to contact the applicants in an
effort to
resolve the matter of non-payment. Much of the first respondent’s
answer to the issues raised by applicants have
not disputed.
[19]
The first respondent has further submitted that in terms of the Debt
Restructuring Agreement, the applicants had chosen as
their
domicilium
citandi et executandi
the
address of the subject property. Summons was served by affixing to
the gate at this address. The
section 129
-Notice was also sent to
this address and emailed to addresses which the applicants had
provided. The applicants had in the meantime
moved to Durban, having
rented out the subject property. However, as they had not changed
their address as required by the Debt
Restructuring Agreement, the
first Respondent was unaware of their move.
[
20]
Objecting to the style of pleading and the inclusion of legal
argument in the founding affidavit, the first respondent seeks
an
order that the sections of the Constitution quoted by the applicants
should be struck from the affidavit, with costs. However,
as will
become evident, the sections of the Constitution quoted have no
bearing on the issue of whether the applicants have properly
made out
a case for a rescission of the judgment. Therefore it is not
necessary for any striking out to occur.
[21]
The applicants’ seeking of an order to be allowed at a later
stage to submit further evidence and documents cannot be
sustained. I
agree with the submission on behalf of the first respondent in its
heads, that the applicants should have disclosed
in the founding
affidavit all facts upon which they based their application. They
cannot be allowed time to gather further information
which in any
event has not been conclusively shown to exist.
The
law
[22]
Rule 42(1) provides that a court may rescind or vary:
(a) an order or judgment
wrongly sought in the absence of an affected party;
(b) an order or judgment
where there is an ambiguity, patent error or omission but only to the
extent of the ambiguity, error or
omission;
(c) an order or judgment
granted as a result of a mistake common to the parties.
[23]
It is clear that Rule 42(1) does not apply as, just as in the case of
Swart v
ABSA Bank 2009
[1]
(5) SA 219
(C),
“there is no ambiguity, error or mistake in the judgment and it
was also not erroneously granted”.
[24]
The common law grounds for a rescission application are:
(a) fraud;
(b) an error in law;
(c) judgment granted by
default in the absence of the parties; or
(d) upon good cause
shown.
[25]
On the other hand, Rule 31(2)(b) provides that:
“
A defendant may
within 20 days after he has knowledge of such judgment apply to court
upon notice to the plaintiff to set aside
such judgment and the court
may, upon good cause shown, set aside the default judgment on such
terms as to it seems meet.”
[26]
Both the common law and Rule 31(2)(b) find application to the facts
of this matter in that both apply to cases where the applicants
were
unaware of the judgment and require good cause to be proved before
rescission of the judgment will be ordered.
Has
good cause been proven?
[27]
The applicants were well aware of the increasing arrears owed in
terms of the bond, having participated in debt restructuring
and the
NAS programme. By the time summons was issued, the bond account was
23, 31 months in arrears and the amount outstanding
was R245 592,01.
While they could be commended for seeking better opportunities
elsewhere, given that they were sinking further
into debt by then, it
does not assist their case to have simply ignored the first
respondent, a major creditor. When confronted
with the respondent’s
evidence of constant attempts at contacting them, the first applicant
attempted to introduce new evidence
in the replying affidavit –
he blamed the tenant for not informing him of the warrant of
execution against the property,
technology in that signals were poor
at his Durban residence, his
wife’s
poor health and the first respondent’s attorneys for giving him
incorrect advice. If anyone was reckless,
it is the first
applicant for avoiding the first respondent’s telephone calls
and not responding to its messages.
[28]
While the summons was served by affixing, the warrant of execution
for the attachment of the subject property was served on
the tenant
on 31 August 2016. I agree with the first respondent’s
contention that it is improbable that she, Ms Valashig
would not have
reported this to the applicants. It was surely in her interests that
the applicants acted with sufficient alacrity
so as to halt whatever
action was pending, and to attempt to resolve the matter, otherwise
she might well have had to find alternate
accommodation quite soon.
[29]
Turning to the defences raised in the founding affidavit, these can
only be described as bald and fictitious. Regulation 7(1)
in respect
of commissioners of oaths provides that a commissioner of oaths
“shall not administer an oath or affirmation relating
to a
matter in which he/she has an interest”. To suggest that the
attorney who commissioned the first respondent’s
affidavit and
who is employed by the firm of attorneys who are part of the first
respondent’s panel of attorneys/conveyancers,
has an interest
in the matter against the applicants, is far-fetched. In the course
of their legal work for the first respondent,
the firm probably deals
with many such matters in a day. And it is not known whether the
commissioner of oaths is one of the conveyancers
who works in that
department. This is similar to the first applicant’s spurious
attack on the attorney acting on behalf of
the first respondent’s,
blaming her for his poor handling of his “urgent”
application.
[30]
Furthermore, I have no hesitation in rejecting the applicants’
other challenge on the grounds of legal fees, insurance
and
securitisation. On the papers and in presenting his argument the
first applicant demonstrated an above-average understanding
of law,
to the extent that he is able to use it to his advantage. The bond
was registered based on his authority in terms of a
Power of
Attorney. He also clearly understood the terms and conditions
contained in the draft bond, otherwise he could have objected
before
the registration was effected. The applicant clearly cannot afford to
bond repayments, and the first respondent is entitled
to take steps
to recover its losses.
[31]
I accept the argument advanced on behalf of the first respondent that
the applicants deliberately failed to defend the matter.
The court
finds that they were therefore in wilful default. The applicants have
failed to meet the requirements for rescission
of the default
judgment in that no good cause has been proven. I do not however deem
it necessary to grant an order for punitive
costs against the
applicants, who already are in debt.
[32]
In the circumstances, the application is dismissed with costs.
_______________________
S
PATHER AJ
JUDGE
OF THE HIGH COURT
APPEARANCES
For
the applicants: In Person
For
the first respondent: Advocate Jacques Minaar
Instructed
by: Hammond Pole Majola Incorporated
Date
of hearing: 6 September 2017
Date
of judgment : 23 November 2017
[1]