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[2011] ZAECPEHC 22
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FirstRand Bank Ltd v Woods and Others, Nedbank Ltd v Boyce and Another (1837/07, 2327/11) [2011] ZAECPEHC 22; 2011 (5) SA 536 (ECP) (31 May 2011)
REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT
ELIZABETH)
Date
heard: 17 May 2011
Date
delivered: 31 May 2011
In the matters between:
FIRSTRAND
BANK LIMITED
Plaintiff/Execution
Creditor
and
ELWIN BRUCE WOODS
DELRAY
GAYNOR WOODS
Case No.: 1837/07
First Defendant/Execution Debtor
Second Defendant/Execution Debtor
CEDRIC PERCY PAGE
Case No.: 1254/08
Defendant/Execution
Debtor
PHAKAMILE MICHAEL MADWARA
Case No.: 2229/08
Defendant/Execution
Debtor
RECARDO NOLAN FORTUIN
DEBORAH
BRIDGITTE FORTUIN
Case No.: 121/09
First Defendant/Execution Debtor
Second Defendant/Execution Debtor
WARREN VENTER
ALIDA
KAREN VENTER
Case No.: 1855/09
First Defendant/Execution Debtor
Second Defendant/Execution Debtor
CORNELIUS
JACOB MEIRING
Case No.: 2533/09
Defendant/Execution Debtor
BARRY
ANDREW CALLAGHAN
Case No.: 722/09
Defendant/Execution Debtor
SHARON LIZETTE MARKS
Case No.: 1866/10
Defendant/Execution
Debtor
CHRISTO
ALBERT SWART
Case No.: 2637/10
Defendant/Execution Debtor
DIAL BAKERS
JESSICA
BAKERS
Case No.: 1669/07
First Defendant/Execution Debtor
Second Defendant/Execution Debtor
JONATHAN
BARRY CORNWELL
Case No.: 1172/09
Defendant/Execution Debtor
THABO
MASISI
Case No.: 2532/09
Defendant/Execution Debtor
CLARK
COETZEE
Case No.: 3030/09
Defendant/Execution Debtor
ANDREW LAWRENCE MILNE
NICOLE
LERM
Case No.: 3675/09
First Defendant/Execution Debtor
Second Defendant/Execution Debtor
AND
In the matter between:
Case No.: 2327/11
NEDBANK
LIMTED
Plaintiff/Execution
Creditor
and
MZIMASI VINCENT BOYCE
NOLWANDILE
PATRICIA BOYCE
First Defendant/Execution Debtor
Second Defendant/Execution Debtor
J U D G M E N T
DAMBUZA,
J
:
In each of the matters before me the
plaintiff (execution creditor) seeks to confirm an order granted by
the registrar of this
court declaring executable immovable property
belonging to the defendants (execution debtors). The plaintiff also
seeks an order
confirming and declaring to be valid the attachment
in execution of the immovable property consequent to the order of
the registrar.
Although 17 cases served before me on
17 May 2011, only one matter, Case No. 1837/07, was argued. Mr
Scott
who appeared on behalf of
the plaintiff (Firstrand Bank Limited) in all except one matter and
Ms
Zietsman
who
appeared on behalf of Nedbank (Case No. 2327/07) were content that
as the relief sought in each of the other matters is the
same as
that sought in Case No. 1837/07 and the circumstances of the matters
are similar, argument would only be heard on Case
No. 1837/07. This
judgment is therefore based on the submissions made specifically in
respect of Case No. 1837/07.
In Case No. 1837/07 the order
declaring the defendants’ property executable was made by the
registrar, in default of the
defendants, on
21 September 2007,
subsequent to summons having been served on the defendants on 29
August 2007. The defendants are married to
each other in community
of property. In the summons the plaintiff claims a sum of
R803,396.26 and interest thereon due by the
defendants “……
by
reason of the Defendants’ failure or neglect to pay either
promptly or at all the instalments that fell due under the
said
bonds
”.
Robert Freeborough, the plaintiff’s
Operations Manager states in an affidavit filed in support of this
“application”
that when judgment was granted (in 2007)
the instalment in respect of the bond account relating to this
matter was R8,783.74
and the arrears were R35,510.23. Pursuant to
the attachment in terms of the order, sales in execution were
arranged for 13 December
2007,
10 April 2008, 17 July 2008, 20
November 2008, 12 March 2009, 21 January 2010, 17 June 2010 and 24
March 2011. In each instance
the sale in execution was cancelled
because substantial payments were made into the account and payment
arrangements were made
with the Defendants. In respect of the last
of the sales in execution, which was scheduled for 24 March 2011,
the arrangement
made with the defendants was that the arrears owing
at that time would be paid in full by 28 March 2011. There is no
indication
however as to how much such arrears amounted to. But on
25 March 2011 the defendants paid R8,000.00 into the bank account.
This
amount did not clear the arrears. No payment was made
thereafter and the arrears escalated to R14,358.51. Since then the
plaintiff
has tried, on numerous occasions, to communicate with the
defendants by telephone, to no avail. There is no evidence as to
whether
the defendants are aware that default judgement was granted
against them and that their property was attached pursuant thereto.
The relief sought by the plaintiff
was prompted by the amendment, on
24 December 2010, to Rule
31(5)(a) and (b)(i), read with Rule 46(1)(a)(ii) of the Rules of
this Court together with the judgment
of the Constitutional Court in
Gundwana v Steko Development CC and Others
(CCT 44/10)
[2011]
ZACC 14
(11 April 2011).
As a result of the amendment Rule
46(1) now reads:
“
(a)
No writ of execution against the immovable property of any execution
debtor shall issue until-
a
return shall have been made of any process which may have been
issued against the immovable property of the judgment debtor
from
which it appears that the said person has not sufficient movable
property to satisfy the writ; or
such
immovable property shall have been declared executable by the court
or, in the case of a judgment granted in terms of rule
31(5), by the
registrar: Provided that, where the property sought to be attached
is the primary residence of the judgment debtor,
no writ shall issue
unless the court, having considered all the relevant circumstances,
orders execution against such property.”
In
Gundwana
(supra)
the
Constitutional Court held that:
“…
it
is unconstitutional for a Registrar of a High Court to declare
immovable property specially executable when ordering default
judgment under 31(5) of the Uniform Rules of Court to the extent that
this permits a sale in execution of the home of a person”.
1
The background leading to the amended
Rule 46 is set out in
Gundwana
(supra)
in
which
Froneman J
refers, amongst others, to
Jaftha
v Schoeman & Others
2
;
Van Rooyen v Stoltz & Others
;
3
Gerber v Stolze and Others
;
4
Nedbank Ltd v Mortinson
.
5
During argument I was referred to
Nedbank Limited v Fraser
and Another
6
in which
Peter
AJ
also traces the
developments with regard to orders declaring immovable property,
particularly property which is a person’s
home, executable,
from the period prior to 1903 until the amendment of Rule 46. In
essence prior to 1903 the authority to declare
movable property
executable was a function of the Courts. In 1903 the Rules were
amended to authorise the registrar to issue
a writ against immovable
property where an attempt at executing against movable property
proved fruitless. An immovable property
could be declared executable
at judgment stage where it was specifically hypothecated for debts
in respect of which the money
judgment was obtained. In 1991 section
27A of the Supreme Court Act, Act No. 59 of 1959 was introduced,
followed by Rule 31(5)
in 1994.
In terms of section 27A of the
Supreme Court Act:
“
A
judgment by default may be granted and entered by the registrar in
the manner and in the circumstances prescribed in the Rules
made in
terms of the Rules Board for Courts of Law Act, 1985 (Act No 107 of
1985), and a judgment so entered shall be deemed to
be a judgment of
the court.”
Rule 31(5)(a) and (b) provide that:
“
(5)
(a)
Whenever
a defendant is in default of delivery of notice of intention to
defend or of a plea, the plaintiff, if he or she wishes
to obtain
judgment by default, shall where each of the claims is for a debt or
liquidated demand, file with the registrar a written
application for
judgment against such defendant: Provided that when a defendant is in
default of delivery of a plea, the plaintiff
shall give such
defendant not less than 5 days' notice of his or her intention to
apply for default judgment.
(b)
The registrar may-
(i)
grant judgment as requested;
(ii)
grant judgment for part of the claim only or on amended terms;
(iii)
refuse judgment wholly or in part;
(iv)
postpone the application for judgment on such terms as he
may consider just;
(v)
request or receive oral or written submissions;
(vi)
require that the matter be set down for hearing in
open court.
In
Gundwana,
Froneman J
remarked,
amongst others, that the judgment (
Gundwana
)
restores to the courts,
“
a
function that they exercised for close on a century before the
introduction of Rule 31(5) in 1994.”
7
During argument it was not in dispute
that the order made by the registrar on 21 September 2007 is a
judgment of the Court. I
then raised with
Mr Scott
two issues
which concerned me. This first was the nature of the relief sought
in view of the fact that the order is, for all intents
and purpose,
a judgment of the court. I inquired about the procedure in terms of
on which the matter was enrolled by the plaintiff.
The second issue
was the failure by the plaintiff to give notice to the defendants
that it intended approaching the Court to
seek reconsideration of
the order of the registrar.
Regarding the first issue it is clear
that the court process in this matter had long been finalised. Then,
almost four years thereafter
the plaintiff set the matter down in
terms of Rule 31(5)(d), for confirmation of the order granted by the
registrar on 21 September
2007.
Rule 31(5)(d) provides that:
“
Any
party dissatisfied with a judgment granted or direction given by the
registrar may, within 20 days after he has acquired knowledge
of such
judgment or direction, set the matter down for reconsideration by
court”.
As I have stated the plaintiff was
prompted by the judgment in
Gundwana
to set the matter down as
it did. The plaintiff’s case in this regard, as I understand
it is that, because of the amendment
to the Rules and the judgment
in
Gundwana
,
it became uncertain as to the status
of the order granted by the registrar. The aim, in seeking
confirmation of the order is to
“
obviate
the situation arising whereby a debtor brings an application for
rescission of the judgment after the Execution Creditor
has sold the
immovable property in execution, thereby occasioning prejudice not
only to the Execution Creditor, but also to any
third party to whom
the property is sold”,
so
it was submitted
.
8
Firstly, in my view the plaintiff is
not a “dissatisfied party” as envisaged in Rule
31(5)(d). It seems to me that
it is because of the plaintiff’s
satisfaction with the order that it wants to “fireproof”
it to eliminate or
at least reduce chances that it may be
challenged. I am not aware of any procedure in this court which
provides for the court
to confirm its own judgments. A situation in
which parties would be allowed to prevent judgment debtors from
approaching court
to seek rescission of default judgments granted
against them, by having by having such default judgment confirmed,
as the plaintiff
presently seeks to, would, in my view, be
untenable. The fallacy in bringing this matter before court in terms
of Rule 31(5)(d)
becomes even more evident in the plaintiff’s
explanation for failure to set the matter down within the 20 day
period stipulated
in Rule 31(5)(d). Contrary to the provisions of
Rule 35(1)(d) the plaintiff has known of the order for a number of
years and
did not seek reconsideration thereof because it was
satisfied with it. In my view Rule 31(5)(d) does not provide for
circumstances
such as found in this matter.
In any event
Froneman J
in
Gundwana
deals conclusively, in my view, with such fears and
uncertainty as expressed by the plaintiff. At paragraphs [57] and
[58] of
Gundwana
the Learned Judge states that:
“
[57]
But what about retrospectivity? In
Jaftha
,
this Court placed no limit on the retrospectivity of its order. The
declaration of invalidity of the legislative provisions in
that
matter did not entail, however, that all transfers made subsequent to
invalid execution sales were automatically invalid.
Individual
persons affected by the ruling still needed to approach the courts to
have the sales and transfers set aside if granted
by default. This
was made clear in
Menqa
and Another v Markom and Others
.
A similar approach should be followed here.
[58]
There may be a fear that the decision in this matter will lead to
large-scale legal uncertainty about its effects on past matters
where
homes were declared specially executable by the registrar and sales
in execution and transfers followed. The experience following
Jaftha
may be an indication that this fear is overstated. It must be
remembered that these orders were issued only where default judgments
were granted by the registrar. In order to turn the clock back in
these cases aggrieved debtors will first have to apply for the
original default judgment to be set aside. In other words, the mere
constitutional invalidity of the rule under which the property
was
declared executable is not sufficient to undo everything that
followed. In order to do so the debtors will have to explain
the
reason for not bringing a rescission application earlier and they
will have to set out a defence to the claim for judgment
against
them. It may be that in many cases those aggrieved may find these
requirements difficult to fulfil.”
It was submitted, in the alternative,
that this Court can grant the relief sought in terms of its inherent
jurisdiction under
the Constitution, to protect and regulate its own
process in the interests of justice.
9
Indeed the courts have, in the past,
used their inherent authority by making “extra-ordinary”
orders to regulate its
own procedures in the interests of proper
administration of justice.
10
But I am not satisfied that the order
in question requires special protection. Further, I cannot find that
the anticipated application
for rescission would undermine or
frustrate court procedures. In any event I remain doubtful as to
whether the order sought could
validly prevent the defendants from
seeking rescission of the order granted by the registrar and in my
view it would not be in
the interest of justice to grant the order
sought.
Regarding the failure to give notice
Mr
Scott
submitted
that because the defendants never responded to the summons with
which they were served in 2007, there is no obligation
on the
plaintiff to alert them that it is approaching court to seek
confirmation of the order. I have, in paragraph [3] above,
set out
what, according to the plaintiff, happened subsequent to the
granting of the order by the registrar. The continued payments
by
the defendants under the bond account subsequent to the granting of
the default judgment occurred in a number of the other
matters that
were before me.
11
The same issue was also before the
Constitutional Court in
Gundwana
.
However the Court, in
Gundwana
,
left the issue open and only remarked
as follows:
“
[61]
The applicant alleges that she continued to make payments on the bond
over a period of approximately four years and that the
Bank accepted
those payments without letting her know that they were inadequate or
unacceptable or that they had obtained default
judgment against her.
She argued that the Bank could not, under those circumstances, simply
proceed in 2007 with an execution order
and writ obtained in 2003. It
was argued that this amounted to a compromise that novated the
judgment debt, or, if not, something
less that at least precluded
execution without giving her some form of a hearing before
proceeding. Alleged abuse of the execution
process after granting the
order is of a different kind from that following upon a
constitutionally invalid process. This is not
an issue for us to
decide, but it may become an issue in the rescission application and
eviction proceedings.”
Because of the view I hold regarding
the propriety of relief sought by the plaintiff and the procedure in
terms of which the matter
was enrolled, I consider it unnecessary to
make a finding on the issue of failure to give notice. More so as
there is no evidence
on whether or not the defendants are aware of
the order granted by the registrar. But the following is stated in
Erasmus;
Superior Court
Practice
:
12
“
The
subrule (31(5)(d)does not contain any explicit directions as to the
manner of set down. It is, however, clear that set down
of a matter
for reconsideration by the court will have to be on notice to the
other parties to the action. It is accordingly submitted
that such
set down is,
mutatis
mutandis
,
to be in accordance with subrule (4), that is, upon not less than
five days' notice to the other parties concerned.”
During argument Mr
Scott
brought
it to my attention that orders of the same nature as sought by the
plaintiff have been granted in the Western Cape Division.
However
there does not seem to be any judgment in that regard and I am
therefore not aware of the considerations that motivated
the
granting of such orders.
Although it is not clear from the
papers, I can only assume that this matter is set down as an
application.
The order I grant therefore is that:
[23.1] The application is dismissed.
_________________________
N. DAMBUZA
JUDGE OF THE HIGH COURT
In matters:
1837/07, 1254/08, 2229/08, 121/09,
1855/09, 2533/09, 722/09, 1866/10, 2637/10, 1669/07, 1172/09,
2532/09, 3030/09, 3675/09
For
Plaintiff/Execution
Creditor:
Adv P.W.A. Scott instructed by
Spilkins of Port Elizabeth.
For Defendants/Execution Debtors:
No appearance
In matter:
2327/07
For
Plaintiff/Execution
Creditor:
Adv T. Zietsman instructed by Pagdens
of Port Elizabeth.
For Defendants/Execution Debtors:
No appearance
1
Paragraph
[65]b. of the judgment.
2
[2004] ZACC 25
;
2005
(2) SA 140
(CC)
3
[2004] ZACC 25
;
2005
(1) BCLR 78
(CC)
4
1951(2)
SA 166 T
5
[2005] ZAGPHC 85
;
2005
(6) SA 462
(W)
6
An
unreported decision of the South Gauteng High Court, Case No
2011/00418, delivered on 4 May 2011.
7
Paragraph
53 of the judgment.
8
Paragraph
8 of the plaintiff’s written Heads of Argument.
9
Section
173 of the Constitution Act, Act 108 of 1996 provides that:
“
The
Constitutional Court, Supreme Court of Appeal and High Courts have
the inherent power to protect and regulate their own process,
and to
develop the common law, taking into account the interests of
justice.”
10
Universal
City Studios Inc. v Network Video (Pty) Ltd
[1986] ZASCA 3
;
1986
(2) SA 734
(A) and
Permanent
Secretary, Department of Welfare, Eastern Cape v Ngxuza
2001 (4) SA 1184
(SCA).
11
In
particular in Case Nos. 2533/09; 3675/09 and 2327/07. There is no
evidence of any payment having been made subsequent to the
granting
of the order in the rest of the matters.
12
At
B-204D