About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2010
>>
[2010] ZAGPPHC 130
|
|
ABSA Bank Limited v Dircon Industrial Properties (Pty) Ltd and Others (14064/2009) [2010] ZAGPPHC 130 (1 October 2010)
NOT
REPORTABLE
IN
THE HIGH COURT SOUTH AFRICA,
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
NO: 14064
/2009
DATE:
01/10/2010
In
the
matter
between:
ABSA
BANK
LIMITED
......................................................................
Plaintiff/
Respondent
And
Dircon
Industrial Properties (Pty)
Ltd
.............................................................
1
st
Defendant
Izak
David Frederick Schneieder
N.O
...........................................................
2
nd
Defendant
Cornelius
Frederick Schneieder
N.O
...........................................................
3
RD
Defendant
Izak
David Frederick Schneieder
N.O
...........................................................
4
th
Defendant
Cornelius
Frederick
Schneieder
...............................................
5
th
Defendant/ 1
st
applicant
Adriana
Martha
Schneieder
......................................................
6
th
Defendant/2
nd
Applicant
JUDGMENT
MAVUNDLA
J,
[1]
On the 26 August 2010 I dismissed with costs the application for
rescission of the judgment granted against the first and second
applicants on 24 June 2009 and ordered that the reasons for the order
may be requested within 10 days. I therefore set out the
reasons for
this order.
[2]
The applicants sought an order rescinding the aforesaid order granted
against them. Although the judgment was granted against
all four
defendants, only the fifth and sixth defendants, as applicants seek
rescission of the aforesaid order.
[3]
The applicants further sought an order in terms of which this Court
exercise its discretion and refer their alleged over-indebtedness
to
a debt counselor in accordance with the provisions of ss85 and 86 of
the National Credit Act 34 of 2005 (NCA), alternatively
they be
declared in terms of s87 over their over-indebtedness.
[4]
The respondent had issued summons against all the defendants jointly
and severally, the one paying the other to be absolved,
for payment
in the amount of R754,778.80 with interest and an order against the
first defendant declaring certain immovable property
executable.
[5]
The plaintiff and the first defendant on 11 September 2006 entered
into a loan agreement in terms of which the plaintiff lent
and
advanced an amount of R800 000.00 to the first defendant. The
aforesaid loan was secured by a mortgage bond passed by the first
defendant over certain immovable property in favour of the plaintiff
hypothecating the immovable property mentioned herein above.
[6]
The second, third, fourth and fifth defendants bound themselves as
sureties and co-principal debtors, together with the first
defendant
in favour of the plaintiff, for the payment of the amount of any sum
of money which first defendant may from time to
time be owing to the
plaintiff from whatever cause arising. Copies of the deed of surety
were annexed to the summons as annexure
D1-D3. It needs mention that
the fourth defendant had both consented to the conclusion of the
surety by the fifth defendant. I
shall henceforth refer to the last
two defendants as the applicants.
[7]
It needs mention that in the particulars of claim it was averred that
the
National Credit Act, No 34 of 2005
does not apply to the
agreement/ between the parties to the stipulation of
Section 4(1
)(a), alternatively
Section 4(1
)(b), read with
section 4(c)
and
Section 8(5).
[8]
The summons was served personally on the fifth defendant and properly
served on the sixth defendant by way of service on the
sixth
defendant's husband both on the 2 April 2009. There was no appearance
to defend entered by or on behalf of the defendants.
The plaintiff
applied in terms of
rule 31(5
) for default judgment which was granted
on 24 June 2009.
[9]
On the 15 September 2009 the sheriff served the applicants with a
notice of attachment. The application for rescission was only
filed
with the registrar on 26 October 2009.
[10]
It is common cause that the application for rescission is brought in
terms of rule Rule 31(2)(b).
1
The application for rescission
should
be brought within 20 days from the date on which the applicants came
to know of such judgment. The application was only brought
on 26
October 2009, clearly out of time.
[11]
The applicants did not apply for condonation for the late filing of
their application. The Rules are to be complied with. Where
a party
is out of time, such party must seek the Court's indulgence, which
may on the court's discretion be given of refused.
[12]
The applicants admit that the summons was served on them on 2 April
2009. At that stage the fourth defendant was the second
defendant and
also their attorney. They immediately handed the summons to the
fourth defendant with instruction to defend the matter.
[13]
The applicants further acknowledge that the notice of attachment in
execution was served on them on 15 September 2009. They
further aver
that at that stage they had already been informed by Mr. Muller of
Eal Muller Attorneys of the existence of another
action instituted by
the respondent against them. The first applicant says that he assumed
that the aforesaid notice of attachment
had something to do with the
other matter. Because Mr. Muller was already representing them in the
second matter he merely handed
the notice to him. The latter
instructed his correspondents in Pretoria to obtain copies of the
pleadings of the matter, which
were eventually received on 30
September 2009. It was during the consultation with Mr. Muller that
it was brought to their attention
that summons was issued and
judgment had already been obtained against them. The applicants then
realized that it was the same
matter as the one he had instructed the
fourth defendant to defend. It was further brought to his attention
that the fourth defendant
had vacated his premises in the middle of
2009 and had already been struck off the roll of attorneys.
[14]
In the matter of Mutebwa v Mutebwa
2
Jafta J (as he then was) referring to Rule 31(2)(b) stated that the
Rule requires that the applicant, upon whom the
onus
rest:
"(a)
...must give a reasonable and acceptable explanation for his/ her
default;
(b)
...
must prove that the application for rescission is
bona
fide
and
not made with the intention of merely delaying plaintiffs claim; and
(c)
...
must show that he/ she has a
bona
fide
defence
to the plaintiff's claim."
[15]
Jafta J (as he then was) in the same matter
(supra)
also
cited with approval the matter of
Sanderson
Technitool v Intermenua
3
where
Coetzee J said:
"In
Grant
v Plumbers (Pty) Ltd
1949
(2) SA 470
(0) at 470 (0) at 476 Brink J summarised the effect of
South African decisions. An applicant, who claims relief under this
Rule,
should comply with,
inter
alia,
the
following requirements. His application must be
bona
fide
and
not made with the
intention
of merely delaying plaintiff's claim. It is sufficient if he makes
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. He
need not deal
fully with the merits of the case or produce evidence that the
probabilities are actually in his favour. See also
Brown
v Chapman
1938
TPD 320
at 325."
[16]
The question of condonation is a matter of the discretion of Court.
The court must have regard to all the circumstances and
the
explanation proffered for the default and the delay in taking
appropriate steps to comply with the Rules of the Court. The
applicant must put at least something which will sufficiently justify
the court in holding in the exercise of its discretion that
sufficient cause has been shown justifying the relief sought to be
granted.
[17]
In the matter of
Cavaiinias
v Claude Neon Lights S.A. Ltd
4
the
Appeal Court said:
"
In Silber's case it was also decided that even if good cause is shown
it is still in the discretion of the magistrate to
grant or refuse
relief (p. 352).
As
this is a case involving fault of the litigant's attorney it is
necessary to consider the cases bearing on that. In
Rose
and Another v Alpha Secretaries Ltd.,
1947
(4) SA 511
(AD), Tindal., said at p.519:
1
It seems to me undesirable to attempt to frame a comprehensive test
as to the effect of an attorney's negligence on his client's
prospects of obtaining relief under sub-rule (2), or to lay down that
a certain degree of negligence will debar the client and
another
degree will not. It is preferable to say that the court will consider
all the circumstances of the particular case in deciding
whether the
applicant has shown something which justifies the court in holding in
the exercise of its discretion that sufficient
cause for granting
relief has been shown."
[18]
Remissness on the part of the attorney, in certain circumstances will
not be condoned,
vide
Saliojee and Another NNO v Minister of Community Development
5
.
However,
a weak
explanation
seen against a strong defence may be accepted and condoned by the
Court,
vide
Smith v Saambou Bank Ltd
6
.
[19]
In exercising its discretion, the Court must not only look at the
explanation regarding the remissness, but also the degree
of
non-compliance, the strength of the applicant's case and its
prospects of success on trial,
vide
National Union of Metalworkers of SA v Jumbo Products CC
7
;
Rennie v Kamby Farm (Pty) Ltd
8
[20]
The reason for the applicants in not having entered an appearance to
defend is attributable to the remissness of the fourth
respondent.
The applicants, without saying so, want to attribute the remissness
of not bringing the application for rescission
within the prescribed
period to their attorney Mr. Muller.
[21]
In so far as the failure to enter an appearance to defend, it would
seem that the applicants cannot be blamed as they instructed
the
fourth respondent. But I need not look at this issue in isolation.
The applicants do not give any explanation as to why there
was a
further delay in bringing the application for rescission between the
period of 30 September and 26 October 2009. Their affidavit
was only
deposed to on 22 October 2009. Further, the applicants do not explain
to the Court what steps they took to find out from
the fourth
defendant about the progress of their instruction to defend the
matter.
[22]
A party cannot dump instructions on an attorney and then sit idle
without caring what is happening about the matter. I can
only assume
that the applicants dumped their instructions on the fourth defendant
without caring thereafter what happens; otherwise
they would have
mentioned what steps they took. Such conduct on their part can hardly
be condoned. I further hold the view that
the applicants cunningly
attempt to bring their application within the 20 days period in that
they want this court to believe that
they only became aware on 30
September 2009 of the fact that default judgment was granted against
them. As early as on 15 September
2009 they, so too Mr. Muller, must
have realized that judgment has already been granted otherwise there
would have been no warrant
of execution. Further, it would not have
taken much effort for Mr. Muller to have established from his own
office that the relevant
notice of execution did not relate to the
other matter he was handling, the details of which this Court has not
been taken into
their confidence and provided therewith. I shall bear
in mind all these factors after I have considered whether the
applicants
have a
bona
fide
defence,
vide
Mutebwa v Mutebwa (supra) et National Union of Metalworkers of SA v
Jumbo Products CC(supra).
I
shall also bear in mind that the mere fact that a party has a strong
case is not of itself sufficient cause to grant condonation,
vide
Torwood Properties (Pty) Ltd v South African Reserve Bank
9
Each
case
must be decided on its perculiar facts.
[23]
The applicants contend that annexure D3 and E of the particulars of
claim which they signed constitute a so called credit guarantee
as
envisage in
section 8(5)
of the
National Credit Act of 2005
.
[24]
The applicants further contend that, they did not only bind
themselves as sureties but also as co-principal debtors. They further
contend that they are over-indebted and had they been aware of the
simple and inexpensive and possibly effective debt restructuring
procedure envisaged in provisions of
s86
of the NCA they would have
proceeded along that avenue rather than having to apply through this
Court for rescission and be directly
referred to a debt counselor for
evaluation and for recommendation in terms of
s86(7)
of the NCR. In
the alternative they pray that they be declared as over-indebted in
accordance with
s85(b)
of the NCA.
[25]
The applicants further contend that the respondent did not comply
with the provisions of
s129
of NCA. They further contend that their
statutory right to voluntarily apply for debt review was never
brought to their attention.
[26]
The respondent in his opposing affidavit has,
inter
alia,
raised
a crisp point that the NCA does not apply to the applicants since
they were not sued in their capacity as co-debtors but
as sureties.
[27]
The defence raised by the applicants has been succinctly dealt with
in the matter of
Firstrand
Bank Ltd v Carl Beck Estates (Pty) Ltd and Another
10
an6
find
it apposite to cite in detail what Satchwell J said:
"[20]
Following the reasoning of Trollip JA in Neon and old
Cathode
Illuminations (Pty) Ltd v Ephron
1978
(1) SA 463
(A) at 471, credit was in fact not granted to the second
respondent. The loan finance granted and the mortgage bond agreement
are
and were between the applicant and the first respondent. The
second respondent was not advanced credit and did not become party
to
the contract between the applicant and the first respondent. He did
not contract with the applicant to acquire credit himself
or to be a
party to the agreement between applicant and first respondent.
[21]
The second respondent signed as surety and co-principal debtor. The
right enforceable by the applicant against the second respondent
arises from the contract of suretyship. The contract between
applicant and second respondent is separate and distinct from the
bond agreement between the applicant and the first respondent,
although it is accessory to it. The second respondent is not a
consumer and did not receive credit. He is a guarantor of a consumer
and did not receive credit. He is a guarantor of a consumer's
obligations to a credit giver. Second respondent's contractual
relationship with the applicant remains ancillary to the main
agreement
between the applicant and the first respondent.
[22]
The authorities on this point are clear. A surety who has bound
himself as surety and co-principal debtor remains a surety
whose
liability arises wholly from the contract of suretyship. Signing as
surety and co-principal debtor does not render a surety
liable in any
capacity other than a surety who has renounced the benefits of
exclusion and division
11
.
As De Villiers CJ stated, 'the use of the words "co-principal
debtor" does not transform the contract into any other
than
suretyship'.
12
[23]
Second respondent could not be and was not sued in his capacity as
co-principal debtor, since his liability to the bank remains
that of
surety
who
has renounced certain rights. This position is correctly referred to
by the applicant in the summons.
[24]
In the result the, the second respondent is sued as a guarantor to
the obligations of the first respondent in terms of a credit
transaction to which the NCA does not apply. He cannot claim that he
is entitled to have received a notice in terms of
s129.
"
[28]
In
casu
the
summons clearly state that the applicants bound themselves as
sureties and co-principal debtors in favour of the first respondent
and have renounced their benefits of cession of actions and no cause
of debt and the NCA does not apply. In my view the liability
of the
applicants arises from the agreement of suretyship.
[29]
I am in respectful agreement with the views expressed by Satchwell J,
which
I
find
to be dispositive of the defence of the applicants. The rest of the
contention raised in the applicant's affidavit is nothing
more but a
still born effort to motivate their assertion that they are
over-indebted and should be referred to a debt counselor
and does
not, in my view, warrant any further attention. I therefore conclude
that the defence raised by the applicants has no
prospect of success
were the matter to be referred to trial.
[30]
In the premises, I therefore hold the view and conclude as such that
the applicants have not satisfied
13
this Court that:
(a)
their
remissness in regard to both the default and bringing the condonation
is reasonable and acceptable and should be condoned.
(b)
the
application for rescission is
bona
fide
and
not made with the intention of merely delaying plaintiff's claim; and
(c)
have
a
bona
fide
defence
to the plaintiff's claim.
[31]
It is for the above reasons that I dismissed with costs the
application for rescission and accordingly hand down same.
N.M.
MAVUNDLA
JUDGE
OF THE HIGH COURT
DATE
OF THE REASONS: 01 OCTOBER 2010
APPLICANT'S
ATT
:
EAL MULLER ATTORNEYS
APPLICANT'S
ADV
:
MR JE KRUGER
RESPONDENTS'
ATT : VAN ZYL LE ROUX & HURTER
INCORPORATED
RESPONDETS' ADV : MR. JP VAN DEN BERG
1
Rule
3I(2)(b).
provides that:" A defendant may within twenty days
after he or she has knowledge of such a judgment apply to court upon
notice to the plaintive 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?)
2
2001
(2) SA 193
(Tk HC) at 197D-198A.
3
1980
(4) SA 573
(W) at 575H-576A.
4
1965 (2) SA 649atG-652A.
5
1965
(2)
SA
135
(A)
at
I41C.
6
2002
(6) SA 346
(SECLD) at 349B-E.
7
[1996] ZASCA 87
;
1996
(4) SA 735
(AD) at 741F-G
8
1989
(2) SA 124
(A) at 131H the Appeal Court said: '"In matter of
this sort the prospects of success are in general an important,
although
not decisive, consideration. It has been pointed out
(finbro Furnishers (Pty) Ltd v Registrar of Deeds, Bloemfontem, and
Others
1985 (4) SA 773
(A) at 789C) that the Court is bound to make
an assessment of the petitioner's prospects of success as one of the
factors relevant
to the exercise of the Court's discretion unless
the cumulative effect of the other factors in the case is such as to
render
the application for condonation obviously unworthy of
consideration.,"
9
1996(1)
SA 215 (WLD) at230l-J.
10
2009 (3) SA 384
(TPD) at 390F-391E.
11
Ft note 17 Maassdorp v Graaf-Reinet Board of Executors
(1906-1909) 3
Buch AC 482
at 490, Du Plessis v Eestate Teich Brothers
1914 CPD 48
at 50; Neon supra at 471.
12
Ft
Note 18 Maasdorp supra at page 490.
13
My
emphasis.