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[2020] ZAGPJHC 322
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Firstrand Bank Limited v Crouse and Another (21428/2016) [2020] ZAGPJHC 322 (7 September 2020)
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 21428/2016
In
the matter between:
FIRSTRAND
BANK LIMITED
Plaintiff
and
CROUSE,
RICHARD MARK
First
Defendant
CROUSE,
RENE
Second
Defendant
JUDGMENT
LAMPRECHT AJ:
[1]
This matter was allocated to me on 11 August 2020 from the trial
roll. I on that date made the following order:
[1.1] The trial is postponed
sine
die
.
[1.2] The wasted costs occasioned by
the postponement will be costs in the cause of the action.
[2]
When handing down the order I undertook to provide reasons for the
order. I do so now.
[3]
The postponement was granted pursuant to a postponement application
launched by the defendants, opposed by the plaintiff.
[4]
The plaintiff’s claims against the defendants arise from
building loan agreements concluded between the parties during
2005
and 2006 respectively. Amounts advanced in terms thereof were secured
by two mortgage bonds, registered in favour of the plaintiff
over an
immovable property owned by the defendants. It is common cause that
the immovable property is the defendants’ primary
residence.
[5]
In its summons issued during 2016, the plaintiff
inter alia
alleged that the defendants are in arrears with instalments, that the
full balance owing under the bonds had accordingly become
fully due,
owing and payable and that the defendants were indebted to the
plaintiff as at 9 June 2016 in the sum of R631 053.52,
together
with interest thereon.
[6]
The bonds as read with the building loan agreements are credit
agreements regulated by the National Credit Act, 34 of 2005 (“the
NCA”).
[7]
The plaintiff furthermore alleged that the defendants had applied for
debt review in terms of section 86 of the NCA, but that
the
plaintiff, as it was entitled to do and 60 days having elapsed since
the date of the application for debt review, on or about
6 May
2016 delivered notices in terms of section 86(10) of the NCA.
[8]
Having in its summons drawn the defendants’ attention to the
provisions of section 26(3) of the Constitution of the Republic
of
South Africa, Act 108 of 1996 and having made related allegations in
this regard, the plaintiff also incorporated a prayer for
the
immovable property to be declared specially executable and for a Writ
of Execution to be issued, as envisaged in terms of Rule
46(1)(a) of
the Uniform Rules of Court.
[9]
On 4 June 2020 and pursuant to an application by the plaintiff
in terms of Rule 130(4), opposed by the defendants, Adams J
made
an order directing the plaintiff to deliver a notice in terms of
section 86(10) of the NCA and giving directions relating
to the
manner in which such notice had to be delivered to the defendants and
the relevant debt counsellor. The order provided that
the hearing of
the main action between the parties would be stayed until the
plaintiff had complied with the order, insofar as
it related to the
delivery of a notice in terms of section 86(10).
[10]
The application in terms of section 130(4)(b) of the NCA was
evidently motivated
inter alia
by the defendants’
allegations in their existing special pleas and plea on the merits,
filed during February 2017, to the
effect that -
[10.1] the section 86(10) notices
previously sent by the plaintiff were sent to the incorrect address;
[10.2] the defendants had never
received these notices; and
[10.3] the notice had not been
properly served on the relevant debt counsellor.
[11]
On 20 July 2020, approximately three weeks prior to the trial
date, the plaintiff filed a notice of intention to amend.
The core
amendments sought to be introduced by the amendment, were as follows:
[11.1] An increase of the quantum of
the plaintiff’s claim (together with consequential amendments
of the arrear amounts)
to bring it in line with an updated amount
alleged to be outstanding and in arrears as at 26 June 2020.
[11.2] A replacement of the previous
certificate of balance annexed to the particulars of claim, with an
updated certificate of
balance.
[11.3] Pursuant to the section
130(4)(b) application and the order granted by Adams J on 4 June
2020, to introduce additional
averments regarding the plaintiff’s
alleged compliance with that order, to the effect that further
notices in terms of section
86(10) of the NCA had been delivered to
the defendants and the relevant debt counsellor on or about 2 July
2020.
[11.4] Inserting (as new paragraphs 46
to 53) allegations regarding the plaintiff’s compliance with
the provisions of Rule
46A(5) and 46A(8) of the Uniform Rules of
Court as well as annexing documents, as envisaged and required by the
relevant rule,
relating to the market value of the immovable
property, a municipal evaluation in respect thereof as well as
amounts owing to the
municipality as rates and taxes.
[11.5] The latter proposed amendment
incorporated comprehensive allegations, in the first instance in
support of the contention
that it is not necessary to set a reserve
price (should the immovable property be declared executable),
alternatively in support
of allegations regarding an appropriate
reserve price.
[12]
No objection having been filed to the proposed amend, the plaintiff
on Tuesday, 4 August 2020, three clear court days
prior to the
trial, filed its amended pages.
[13]
The defendant erstwhile attorneys of record withdrew on 5 August
2020, and a notice of appointment of new attorneys was
filed on
6 August 2020.
[14]
The defendants’ new attorneys, having requested that the trial
be postponed by agreement with such request having been
refused by
the plaintiff, on Friday, 7 August 2020, served the application
for a postponement. Answering and replying affidavits
were exchanged
between the parties on 9 and 10 August 2020 respectively, during
the long weekend prior to the trial date.
[15]
The defendants in the application for postponement, supported by an
affidavit deposed to by its new attorney of record, advanced
two
grounds as to why the matter had to be postponed:
[15.1] Firstly, the late filing by the
plaintiff of its amended pages, described by the defendants to be
substantial, and which
it was submitted required the filing of
consequential amendments. The defendants contended that they should
be afforded the normal
15-day time period provided for in Rule 28(8)
from the date on which the plaintiff’s amended pages were
filed, to file their
own consequential amendments.
[15.2] Secondly, that a fee dispute
had developed between the defendants and their previous attorneys of
record, with the latter
at a late stage requiring a deposit in order
to proceed to trial, resulting in the previous attorneys withdrawing
on 5 August
2020 and their new attorneys being appointed the
following day, on 6 August 2020.
[16]
The plaintiff in opposing the application principally contended as
follows:
[16.1] That the defendants’ new
attorney, who deposed to the affidavit supporting the postponement
application, lacks the
required personal knowledge regarding the
allegations deposed to by her.
[16.2] That the application for
postponement was a delaying tactic.
[16.3] That the amendments effected to
the particulars of claim are not substantial.
[16.4] That the plaintiff had during a
pre-trial conference held on 2 July 2020 indicated that it may
wish to amend its particulars
of claim – the defendants were
aware of this and were also aware of the nature of the amendments
that were going to be effected,
having agreed to evidence of the
plaintiff’s valuator being adduced by way of affidavit.
[16.5] The defendants have had
adequate time to attend to consequential amendments to their plea.
[17]
The principles applicable
regarding postponements are well established. The postponement of a
trial is an indulgence, the granting
whereof falls within the
discretion of the Court. A party requiring a postponement should
furnish, under oath, full reasons for
such request and has the onus
to persuade the Court to grant a postponement. A party seeking a
postponement must fully explain
the reason for his unpreparedness and
the unreadiness should not be due to delaying tactics. Applications
for postponement should
be brought without delay.
[
[1]
]
[18]
Where fundamental fairness and
justice justify a postponement, the Court may in an appropriate case
allow an application for postponement,
even if the application was
not timeously made. Considerations of prejudice will ordinarily
constitute the dominant component of
the total structure in terms of
which the discretion of Court will be exercised. What the Court
primarily has to consider is whether
any prejudice caused by a
postponement to the adversary of the applicant can fairly be
compensated by an appropriate order for
cost or any other ancillary
mechanisms.
[
[2]
]
[19]
Any lack of personal knowledge by the defendants’ newly
appointed attorney is unrelated to the basis upon which I concluded
that the trial should be postponed. This aspect accordingly did not
assist the plaintiff and requires no further elaboration.
[20]
During argument the defendants (correctly so, in my opinion) conceded
that the amendments introduced by the plaintiff insofar
as they
relate to the quantum of its claim, the arrears, as well as the
alternative allegations pertaining to section 86(10), could
by no
means described as being substantial, requiring a postponement. These
aspects accordingly also require no further consideration
or
discussion.
[21]
In considering the application for postponement, I considered the
provisions of Rule 46A, introduced by
GN R1272 of
17 November 2017 and which came into operation on 22 December 2017
,
some two and a half years prior to the trial date, to be of material
importance.
[22]
Rule 46A(2)(a) provides that whenever an execution creditor seeks to
execute against the residential immovable property of
a judgment
debtor, a Court considering an application under the rule must –
[22.1] establish whether the immovable
property which the execution creditor intends to execute against is
the primary residence
of the judgment debtor; and
[22.2] consider alternative means by
the judgment debtor of satisfying the judgment debt other than
execution against the judgment
debtor’s primary residence.
[23]
In terms of Rule 46A(2)(b) a Court is precluded from authorising
execution against immovable property which is the primary
residence
of a judgment debtor, unless the Court, having considered all
relevant factors, considers that execution against such
property is
warranted.
[24]
In terms of Rule 46A(3), where application is made to declare a
residential immovable property executable, a respondent opposing
the
application is afforded a time period of 10 days after service of the
application to oppose the application or make submissions
to the
Court.
[25]
Rule 46A(5) provides that every application is to be supported by
documents evidencing the market value of the immovable property,
the
local authority evaluation of the immovable property, the amounts
owing on mortgage bonds registered over the immovable property,
the
amount owing to the local authority as rates and other dues, the
amounts owing to a body corporate as levies and any other
factor
which may be necessary to enable the Court to give effect to subrule
(8).
[26]
In an application context, a respondent is obliged to admit or deny
allegations made by an applicant in the founding affidavit
and set
out reasons for opposing the application and grounds on which the
application is opposed. (Rule 46A6(b))
[27]
In terms of Rule 46A(8), a Court considering an application under the
rule may
inter alia
–
[27.1] of its own accord or on the
application of any affected party, order the inclusion in the
conditions of sale, of any condition
which it may consider
appropriate;
[27.2] order execution against the
primary residence of a judgment debtor if there is no other
satisfactory means of satisfying
the judgment debt;
[27.3] set a reserve price;
[27.4] postpone the application on
such terms as it may consider appropriate; and
[27.5] refuse the application if it
has no merit.
[28]
In terms of Rule 46A(9)(a) in an application under the rule, or upon
submissions made by a respondent, the Court must consider
whether a
reserve price is to be set. Numerous factors are to be taken into
account in deciding whether to set a reserve price
and the amount at
which it is to be set. These factors include -
[28.1] the market value of the
immovable property;
[28.2] the amounts owing as rates or
levies;
[28.3] the amounts owing on registered
mortgage bonds;
[28.4] any equity which may be
realised between the reserve price and the market value of the
property;
[28.5] prospects of reduction of the
judgment debtor’s indebtedness on the judgment debt;
[28.6] whether the immovable property
is occupied, the persons occupying the property and the circumstances
of such occupation;
[28.7] the likelihood of the reserve
price not being realised and the likelihood of the immovable property
not being sold;
[28.8] any prejudice which any party
may suffer if the reserve price is not achieved;
[28.9] any other factor which in the
opinion of the Court is necessary for the protection of the interest
of the execution creditor
and the judgment debtor.
[29]
The importance of affording a judgment debtor an adequate and full
opportunity to consider and deal with all aspects relevant
to the
question of whether immovable property constituting a primary
residence of such judgment debtor should be declared executable,
whether it is necessary to set a reserve price, as well as the price
at which it should be set, if applicable, is self-evident.
It is also
underscored by the provisions of Rule46A.
[30]
The constitutional implications
of declaring immovable property constituting the primary residence of
judgment debtors executable
and the importance of judicial oversight
during this process, have been highlighted in numerous judgments,
including in the full
bench decision of the North Gauteng High Court,
Pretoria, in
Firstrand Bank
Limited v Folscher & Another and similar matters
[
[3]
]
as well as by the Constitutional Court in
Gondwana
v Steko Development.
[
[4]
]
[31]
In
Absa
Bank Limited v Njolomba & Another
[
[5]
]
,
Fisher J made the following observations:
[
[6]
]
[3]
There have, of late, been salutary moves in the statutes, case law,
rules, and practice directives to introduce a measure of
flexibility
into the execution process where it is sought to execute against the
home of a debtor. These laws and rules emanate
from an accepted need
to promote the objects of our Bill of Rights and especially the
requirement that all relevant circumstances
be considered before
depriving a person of his or her home. They include the
requirement that immovable property not be executed
against without
judicial oversight being brought to bear thereon and the recent
introduction of rule 46A into the Uniform
Rules, which requires that
the court 'consider alternative means of satisfying the judgment
debt, other than execution against
the judgment debtor's primary
residence'. The cases have required stringent adherence to notice and
service requirements and
the furnishing of details in relation to the
steps taken to manage the indebtedness of the debtor. Recent
amendments to rule 46
of the Uniform Rules require the consideration
by the court of alternative means of satisfying the judgment debt.
These changes
impose an even more rigorous investigative function on
a court faced with an application for a declaration of
executability
and require still more information to be forthcoming in
relation to the debtor's circumstances and the value of the property.
This
assists in setting appropriate reserve prices and other sale
conditions in the event of execution against the property becoming
necessary. However, the process has, as its main endeavour, to
maintain the mortgage loan and to rehabilitate the debtor if
at
all possible.
[32]
In light of the above considerations and having regard to the nature
of the amendment and allegations contained in paragraphs
46 to 53 of
the amended particulars of claim, filed on 4 August 2020, I formed
the view that this portion of the amendment is indeed
substantial, as
was contended on behalf of the defendants. Paragraphs 46 to 53,
consisting of some 5 pages, introduced comprehensive
and new
allegations, intended to deal with the requirements of Rule 46A.
[33]
I accordingly concluded, with due regard to requirements of
fundamental fairness and justice, as well as to potential prejudice
to the defendants should a postponement not be granted, that the
trail should be postponed. The defendants would then have a proper
opportunity to consider the allegations, consult with their legal
advisors, effect any consequential amendments to their pleadings
and
prepare for trial concerning any issues arising therefrom.
[34]
The final aspect requiring consideration is the plaintiff’s
argument to the effect that the defendants agreed that the
evidence
of the plaintiff’s valuator could be adduced by way of
affidavit, that the defendants were aware of the nature of
the
amendment that was going to be effected by the plaintiff, including
in regard to rule 46A, and that the defendants agreed that
they would
effect any necessary consequential amendments required.
[35]
Paragraph 9 of the minutes of the 2 July 2020 pre-trial conference
records that an agreement had previously been reached that
the
evidence of the plaintiff’s valuator could be adduced by way of
affidavit. It is also apparent from the minutes, as read
with the
defendants’ answer (filed on 15 July 2020) to the plaintiff’s
agenda dated 2 July 2020, that a potential amendment
by the plaintiff
of its particulars of claim and a consequential amendment by the
defendants of their Special Pleas and Plea on
the merits had been
envisaged.
[36]
There is however nothing to suggest that the defendants were aware of
the precise nature or ambit of the envisaged amendment
of the
plaintiff’s particulars of claim or that they agreed that they
would file consequential amendments prior to the trial
date,
irrespective of the nature of the amendments or the date by which the
plaintiff effected its own amendment to the particulars
of claim. An
agreement to this effect is not only inherently unlikely but is also
neither recorded in the pre-trial minute nor
can it be inferred from
the defendants’ answer to the plaintiff’s agenda.
[37]
It was on this basis that I concluded that the matter was not ripe
for trial and should be postponed
sine die
.
[38]
It is so that the postponement was caused, predominantly, by the late
filing by the plaintiff of its amended pages. The defendants
themselves however at the last moment appointment new attorneys of
record and sought a postponement on this additional ground.
The
defendants also delayed substantially in launching the postponement
application, which was only served on Friday, 7 August
2020.
Additionally, and in circumstances where it was not clear whether
and, if so, to what extent the defendants intend raising
any matters
of substance in response to the plaintiff’s Rule 46A
considerations, warranting a postponement of the matter,
I concluded
that the wasted costs occasioned by the postponement should follow
the result of the action. I accordingly held that
the wasted costs
occasioned by the postponement should be costs in the cause of the
action.
[39]
These are the reasons for the order handed down on 11 August
2020.
_____________________________
André
Lamprecht
Acting Judge of the
High Court
Gauteng
Johannesburg
Date
of hearing and order: 11 August 2020
Date
of reasons for judgment: 7 September 2020
Counsel
for the plaintiff: Ms D Strydom
Instructed
by: Bezuidenhout Van Zyl & Ass Incorporated
Counsel
for the defendants: Adv B Bester
Instructed
by: Jennings Incorporated
[
[1]
]
Madnitsky v Rosenberg
1949 (2) SA 392
(A) at 399;
Myburgh Transport v Botha t/a SA Truck Bodies
1991 (3)
SA 310
(Nm).
[
[2]
]
Myburg Transport
above at 311B - E
[
[3]
]
Firstrand Bank Limited v Folscher & Another and similar
matters
2011 (4) SA 314
(GNP) at 332C-333D.
[
[4]
]
Gondwana v Steko Development
2011 (3) SA 608
(CC) at 626F-G.
[
[5]
]
Absa Bank Limited v Njolomba & Another
2018 (5) SA
548
(GJ).
[
[6]
]
At 550E-551C.