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[2010] ZAGPPHC 642
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Dhlamini v Nedbank Limited and Others (33047/08) [2010] ZAGPPHC 642 (2 June 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE No.
33047/2008
Not reportable
Not of interest
to other judges
Date: 2 June 2010
In the matter
between:-
SYDNEY
MUDLAZAKHE
DHLAMINI
.......................................................................................
Applicant
and
NEDBANK
LIMITED
...........................................................................................................
First
Respondent
LOUIS
MALAPO
..............................................................................................................
Second
Respondent
HARVEY
NORTJE
.............................................................................................................
Third
Respondent
SHERIFF
OF THE HIGH COURT,
WITBANK
...........................................................
Fourth
Respondent
REGISTRAR
OF
DEEDS
....................................................................................................
Fifth
Respondent
JUDGMENT
Van der Byl, AJ:-
[1] In this matter
the Applicant in effect seeks, in addition of the ordinary order of
costs against the First Respondent, Nedbank
Limited, an order -
(a) rescinding and
setting aside of the judgment granted by default by the Registrar
under Case No. 23047/08 on 21 September 2007
(default judgment was
actually
(b) setting aside
the sale in execution of the immovable property described as Erf
1342, Phola. held under title deed TL34887/1991.
(I will for the sake
of convenience refer to the parties as they were cited in the action
at the time when default judgment was
granted, ie. to the Applicant
as the Defendant and to the First Respondent as the Plaintiff)
[2]
It is common cause that, as is apparent from the summons issued by
the Plaintiff against the Defendant on 9 July 2008, a mortgage
bond
was registered over the property known as Erf 1342, Phola Township,
Mpumalanga, being the chosen
domicilium
citandi et executandi,
of
which the Defendant was the registered owner, as security for the
Defendant’s indebtedness to the Plaintiff in respect
of an
amount of R47 873, together with costs of R4 787,30 and interest,
lent and advanced to the Defendant by the Plaintiff.
[3] It is likewise
common cause that in terms of the mortgage bond the capital sum and
all other moneys which may be claimable under
the mortgage bond would
immediately become due and payable in the event of the failure by the
Defendant to make payments in terms
of the mortgage bond and
entitling the Plaintiff to take such steps as may be necessary to
have the property declared specially
executable.
[4] It is also not
disputed that the Defendant breached his obligations under the
agreement in that he failed to make payments in
accordance with the
mortgage bond and that he was in arrears with payments in the sum of
R1 872,06 as at 1 July 2008. The amount
outstanding in terms of the
bond at that time amounted to R29 396.60. together with interest.
[5] It is,
furthermore, averred in the summons that a letter was forwarded by
way of ordinary mail in terms of sectionl 29, read
with
section 130.
of the
National Credit Act. 2005
, to the Defendant on 3 June 2008 and
that no reply was received from the Defendant after the lapse of 10
days since delivery of
the letter.
[6]
A simple summons issued on 11 July 2008 was served by the Sheriff
upon the Defendant by, according to the return of service,
affixing
it to the principal door at his chosen
domicilium
citandi et executandi
address.
[7] The Defendant
failed to enter an appearance and default judgment was granted
against the Defendant by the Registrar on 19 September
2008 for -
(a) payment of the
sum of R29 396,60;
(b) interest thereon
at a rate of 15,50 per cent per annum from 2 July 2008 to date of
payment;
(c) costs in an
amount of R200 plus the Sheriff’s fees
In addition the
mortgaged property was declared specially executable.
[8]
A notice of attachment and a warrant of execution was forwarded by
prepaid registered post to the Defendant at his chosen
domicilium
citandi et executandi
add
ress on 26 January 2009 and a notice of sale of the property was.
apart from being affixed to the notice board at the magistrate's
court Wilbank and being advertised in the Government Gazette and
Beeld newspaper on 6 March 2009. delivered by the Sheriff at the
domicilium citandi
et executandi
address
.
[9] On 18 March 2009
at a sale in execution the property was sold by the Sheriff to a
certain Mr. Louis Malapo for an amount of
R100 000.
[9] It is, as is
apparent from the Applicant's founding and replying affidavits, his
case -
(a) that he for the
first time became aware of the fact that judgment had been granted
against him and that his house had been sold
in execution after Mr.
Louis Malapo approached him on 20 April 2009 and informed him that he
had bought his house;
(b) that the summons
commencing action was never served on him and must have gone astray
as the gate to which it was affixed opens
out onto the street;
(c) that he has paid
his entire indebtedness to the Plaintiff in that he during 2005
arranged that monies due to him by the Mineworkers
Provident Fund be
used to pay off the bond:
(d) that he was
later informed by the Mineworkers Provident Fund that the outstanding
amount had indeed been paid by it to the Plaintiff;
(e) that he received
no letter from the Plaintiff indicating that his account was in
arrears or any notice in terms of the National
Credit Act,2005. since
Erf 1342, Phola Township, Witbank, is not a street address:
(f) that he
approached the Plaintiff on 23 April 2009 where he was informed that
his account was indeed in arrears in an amount
in excess of R20 000
(g) that he then
approached the Mineworkers Provident Fund, but was at the time at his
disposal unable to establish what happened
to his money;
(h) that Matla Coal
Limited by whom he is employed stood surety for his indebtedness and
that the Plaintiff, instead of calling
upon the surety, has chosen to
sell his house.
[10] In its opposing
affidavit the Plaintiff confirms that the Defendant’s account
is in arrears in the amount specified in
the summons and that it took
all steps required to enforce the terms of the mortgage bond.
[11] In terms of a
long standing practice followed in our courts a party seeking
recission of a judgment or order obtained on default
of appearance in
terms of either
Rule 31(2)(b)
or the common law is required to
establish on a balance of probabilities two essential elements,
namely -
(a) a reasonable and
acceptable explanation for his or her default of appearance; and
(b)
a
bona fide
defence
on the merits which carries some prospect of success.
(See:
Herbstein & Van Winsen, The Civil Practice of
the High Courts of South Africa, fifth edition, Volume 1, p. 938
)
[12]
In an application for rescission in terms of
Rule 42(1)(a)
based on
an allegation that a judgment or order had been erroneously granted
against a party affected thereby good cause by way
of these two
essential elements need not to be shown
(
Topol
v LS Group Management Services (Pty) Ltd
1988 (1) SA 639
(W) at
650D-J
)
[13] Mr. Omar who
appeared on behalf of the Defendant argued, in an attempt to bring
the application under
Rule 42(1
)(a), that the Registrar was not
authorized or empowered to grant an order in terms of which the
Defendant's property is declared
specially executable.
In
terms of
Rule 31(5)
the Registrar is empowered to grant default
judgment where a claim is for a
“
debt
or liquidated demand'.
A
claim for a declaration that hypothecated immovable property be
declared executable is
“
is
simply a request for a direction with regard to the execution of a
judgment sounding in money and is ancillary to the claim for
such
judgment’
(Entabeni Hospital Ltd v Van der
Linde; FNB of SA Ltd v Puckriah
1994 (2) SA 422
(N) at 424G; Erf 1382
Sunnyside (Edms) Bpk v Die Chipi BK
1995 (3) SA 659
(T) at 661H)
and
is in any event a claim for a liquidated demand
(Clayton
v Pullen
3 EDC 231
; Van der Hoven v Potgieter
1928 TPD 724
; Fred and
Another v Keelan 1951 SR 7; Morris v Stern
1970 (1) SA 246
(R) at
247)
The submission made
in this regard on behalf of the Defendant is accordingly devoid of
any substance.
[14]
The question to be pronounced upon in this matter is accordingly
whether the Defendant has shown
“
good
cause”
or
“
sufficient
cause
"
for recission of the default judgment obtained on his default of
appearance.
[15] In this regard
Mr. Omar argued -
(a) that, having
regard to the fact that, as explained by the Defendant, the summons
was served by affixing it to the outer gate
of the premises, it is
most likely that it did not come to the attention of the Defendant;
and
(b)
that, relying on the decision in
Jaftha v
Schoeman
;
Van
Rooyen v Stoltz
[2004] ZACC 25
;
2005 (2) SA 140
(CC)
.
the
property was sold when a minuscule amount of approximately R3 000 was
in arrears without taking into consideration the Defendant’s
personal circumstances and also that the Plaintiff sold the property
instead of acting against Matla Coal Ltd which stood surety
for
Defendant’s indebtedness.
[16]
Although it may be true that the summons did not come to the
Defendant’s attention, the manner of service was effected
as
provided in
Rule 4(1
)(iv) and it cannot be said that the summons was
not served as was held in
Fraind v Nothmann
1991
(3) SA 837
(W)
on
which Mr. Omar relied in support of his submissions.
[17]
In the
Jaftha
case, supra,
the
Constitutional Court was dealing with the constitutionality of the
provisions of
section 66(1
)(a) of the Magistrate’s Court Act,
1944, which provided that a judgment for the payment of money is
enforceable by execution
against the movable property and, if there
is not found sufficient movable property to satisfy the judgment or
order, then against
the immovable property of the party against whom
such judgment has been given.
It
was in this context that the Constitutional Court held at
158C-D
that
"(i)t
is difficult to see how the collection of trifling debts.... can be
sufficiently compelling to allow existing access
to adequate housing
to be totally eradicated, possibly permanently, especially where
other methods exist to enable recovery of
the debt',
being
a passage on which Mr. Omar relied in his submission that the
property was sold when a minuscule amount of approximately R3
000 was
in arrears and that the Plaintiff could have acted against the surety
for Defendant's indebtedness.
[18] As is apparent
from the facts of this matter the facts are distinguishable in many
respects from the situation with which the
Constitutional Court was
faced.
As
a matter of fact the Constitutional Court held at
162E,
para [58]as
follows:
"Another
factor of great importance will be the circumstances in which the
debt arose. If the judgment debtor willingly put
his or her house up
in some or other manner as security for the debt, a sale in execution
should ordinarily be permitted where
there has not been an abuse of
court procedure. The need to ensure that homes may be used by people
to raise capital is an important
aspect of the value of a home which
courts must be careful to acknowledge ".
[19]
In this matter we are indeed concerned with a situation which was
described in
Standard Bank ofSA Ltd v Saunderson
2006 (2) SA 264
(SCA) at 269B
as
follows:
“
[1]
The mortgage bond is an indispensable tool for spreading home
ownership. Few people can buy a home immediately: by providing
security for a loan, the mortgage bond enables them to do so. There
can hardly be a private residence in this country that has
not at one
time or another been mortgaged, nor a homeowner who has not at some
time been a mortgagor. We were told by the appellant
bank that in
August 2005 loans secured by mortgage bonds on residential property
in this country amounted to almost R500 billion.
[2] A mortgage
bond is an agreement between borrower and lender, binding upon third
parties once it is registered against the title
of the property, that
upon default the lender will be entitled to have the property sold in
satisfaction of the outstanding debt.
Its effect is that the
borrower, by his or her own volition, either on acquiring a house or
later, when wishing to raise further
capital, compromises his or her
rights of ownership until the debt is repaid. The right to continued
ownership, and hence occupation,
depends on repayment. The mortgage
bond thus curtails the right of property at its root, and penetrates
the rights of ownership,
for the bond-holder's rights are fused into
the title itself.
[3] The value of
a mortgage bond as an instrument of security lies in confidence that
the law will give effect to its terms. That
confidence has been
shaken by a recent decision of the Cape High Court that is the
subject of this appeal. The decision must be
seen against the
background of the ordinary legal process for recovering debts. When
judgment is given against a debtor and the
debtor fails to satisfy
the judgment debt the process for recovery of the judgment debt is by
execution against the judgment debtor's
belongings. It is a
long-standing practice of our courts that execution must be directed
first against the debtor's movable property
and only thereafter. if
the movables are insufficient, against immovable property, but a
Court may alter that sequence. This occurs
when the debt is secured
by a mortgage bond for the secured creditor will then ordinarily ask
the Court in advance
'to dispense with
the circumlocution of having to take execution against the movable
property first and only on that property failing
to realise the money
sum, then to have recourse against the immovable property. When an
order is granted declaring executable the
property specially
hypothecated that order permits the grantee, the creditor, to take
his execution straightaway against the immovable
property. ”
[20]
In
Nedbank Ltd v Mortinson
[2005] ZAGPHC 85
;
2005 (6) SA 462
(W)
the
Court specifically considered the question whetherthe
Jaftha
case
is
applicable to applications for default judgments in terms of Rule 31
(5)(a) in circumstances where the defendant has specially
hypothecated immovable property as security for the debt and the
plaintiff seeks default judgment against the defendant, as well
as an
order to have the immovable property declared executable and held at
470C
that
the
Jaftha case
was
distinguishable from the circumstances pertaining to the application
of Rule 31(5).
[21]
Apart from these considerations, I am satisfied that the Defendant
failed to have made out a
"prima
facie defence in the sense of setting out averments which, if
established at the trial, would entitle him to the relief
asked for
'
(Grant v Plumbers (Pty) Ltd
1949 (2) SA 470
(O)
at 476-7).
For
these reasons the Applicant’s application is dismissed with
costs.
P
C VAN DER B
YL
ACTING JUDGE OF
THE HIGH COURT
ON BEHALF OF THE
APPLICANT: MR Z OMAR
ZEHIR OMAR
ATTORNEYS
c/o Friedland
Hart Attorneys
Momentum Office
Park
79 Steenbok
Avenue
Monument Park
PRETORIA
Ref: Mr Z Omar
Tel: (011) 815
1720
ON BEHALF OF THE
FIRST RESPONDENT: ADV S VAN ASWEGEN
On the
instructions of : BEZUIDENHOUT VAN ZYL & ASSOCIATES INC
c/o HENDRIETTE
MULLER ATTORNEYS
11OB 1
st
Floor, Infotech Building
1090 Arcadia
Street
Hatfield PRETORIA
Ref : Mr G van
der Merwe/MAT27083
(011)789
3050
DATE
OF HEARING: 31
May
2010
JUDGMENT
DELIVERED ON: 2 June 2010