About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2024
>>
[2024] ZAFSHC 75
|
|
Bochnig v ABSA Bank Ltd and Another (5837/2017) [2024] ZAFSHC 75 (11 March 2024)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
Number: 5837/2017
In
the matter of:
ROBERT
- ARMAND BOCHNIG
Applicant
And
ABSA
BANK LTD
First
Respondent
STEPHANUS
GERHARDUS FERREIRA
Second
Respondent
In
re
ABSA
BANK
Plaintiff
And
STEPHANUS
GERHARDUS FERREIRA
First
Defendant
ROBERT
– ARMAND BOCHNIG
Second
Defendant
CORAM:
NAIDOO, J
HEARD
ON:
25 JANUARY
2024
DELIVERED
ON: 11
MARCH 2024
JUDGMENT
- APPLICATION FOR CONDONATION AND RESCISSION OF JUDGMENT
[1]
This is an application for rescission of a judgment, coupled with an
application for
condonation in respect of the late filing of the
application for rescission. The application is opposed by the first
respondent,
Absa Bank Ltd (Absa). The second respondent passed away,
apparently, in June 2023, before the launch of this application in
August
2023. The applicant alleges that despite diligent efforts, he
was not able to ascertain who the executor of the second respondent’s
deceased estate is. Adv LW De Beer represented the applicant, and Adv
HJ Van Der Merwe represented the respondent.
[2]
The applicant sought an order in the following terms:
2.1
That condonation be granted for the late filing of this application
2.2
That the default judgment granted by the registrar of the High Court
under the abovementioned
case number on 27 December 2017 against the
applicant/second defendant be rescinded and set aside.
2.3
That the Writ of Execution issued by the registrar of the High Court
be rescinded and set
aside
2.4
That the costs of this application be costs in the main action,
alternatively be reserved,
save in the event of opposition hereto
[3]
The applicant worked for an entity called Ferreira’s Catering
Equipment CC,
who is the principal debtor in this matter. The
applicant became a member of the principal debtor in about 2008, with
a 30% member’s
interest. In the same year, he signed a
suretyship agreement in favour Absa, in which he bound himself as
surety and co-principal
debtor with the principal debtor for payment
on demand of any amount then owing by the principal debtor. The other
member was the
second respondent, who also signed a suretyship
agreement in favour of Absa, binding himself as surety and
co-principal debtor
with the principal debtor.
[4]
The principal debtor was indebted to Absa in respect of two
agreements, the first
being in respect of an overdraft facility made
available to it by Absa and the second being in respect of a term
loan. The principal
debtor breached the terms of both agreements and
was, in fact liquidated, on 31 August 2017. The amount owing in
respect of the
overdraft facility was R1 200 513.10 and in
respect of the term loan, an amount of R141 665.29.
[5]
Absa issued summons against the
applicant and the second respondent (Ferreira) in order to enforce
the suretyship agreements that they had signed. The applicant was the
second defendant in the main action and Ferreira was the
first
defendant. According to the return of service, in respect of the
applicant, rendered by the Sheriff of the Court, the summons
was
served on 27 November 2017, on a Ms Kehunle Rametseu at 3[…]
M[…] Street, Harrismith. The note on the return
of service by
the Sheriff indicates that the defendant (applicant) is unknown to Ms
Rametseu at that address. The action was not
defended and the
respondent obtained judgment by default against the applicant on 27
December 2017. Following upon the granting
of the default judgment,
the respondent proceeded to have a Warrant of Execution (the Writ)
issued and attempted to execute upon
it at various addresses. On 13
February 2018, the Writ, which cited both defendants was served at
two different addresses, namely
3[...] M[...] Street, Harrismith and
7[...] S[...] Street, Harrismith, without indicating which defendant
was served at which address.
The sheriff’s return indicates
that the Writ was served on two different people at the mentioned
addresses, that the defendants
are unknown at the given addresses,
and that “
The given business was liquidated in 2017”
[6]
On 30 August 2018, with the Writ still reflecting the names of the
applicant and Ferreira,
the Sheriff ostensibly again served the Writ
at two different addresses, namely 1[…] P[…] R[…]
Street, Harrismith
and 2[…] O[…] A[…], Kings
Hill, Harrismith. The Sheriff indicates that the Writ was served on a
Martha Radebe
“
in the absence of the defendant at 1[…]
P[…] R[…] Street, Harrismith 2[…] O[….]
A[…] Kings
Hill, Harrismith”.
The Sheriff proceeded
to place under attachment a large number of household furniture,
appliances and other items. It appears from
the papers before me that
further steps were taken to execute upon the Writ and serve same on
the applicant on 21 June 2023. The
applicant alleges to have become
aware of the judgment on 22 June 2023.
[7]
The applicant’s version is that after he became a member in the
principal debtor with a
30% member’s interest, he continued to
be involved predominantly in sales and installation of products
supplied by the principal
debtor, such as refrigeration systems and
cold rooms. He alleges that he was never involved in the management
of the finances or
the affairs of the principal debtor. Shortly after
he became a member, Ferreira approached him and advised that the
business needed
to increase its overdraft facility in order to
acquire working capital for the expansion of the business.
[8]
At some stage thereafter, Ferreira requested him to sign a suretyship
agreement, in
favour of Absa, in respect of the overdraft facility.
Ferreira and the representatives of Absa assured him that the
suretyship
agreement would be temporary, it would be only in respect
of the overdraft facility and it would be limited to the percentage
of
his member interest. Although he could not recall the date he
signed such suretyship agreement, he accepted that it was in
September
2008, after having perused the summons and the suretyship
agreement which was an annexure thereto. With regard to the term
loan,
the applicant alleges that he cannot recall that such a
facility was either applied for or granted by Absa, nor can he recall
that
he signed any resolution to give effect to the application for
such term loan. With regard to the overdraft facility, apart from
the
temporary increase in the overdraft facility I mentioned, he alleges
that he has no knowledge of any further increases in the
facility or
resolutions passed authorising same.
[9]
The applicant further alleges that he resigned as a member and
employee of the principal
debtor in about July or August 2015, and
according to the records of the Companies and Intellectual Property
Commission (CIPC),
such resignation was only registered on 30 August
2016. Piet Webb, the auditor of the principal debtor, assured him
that he (Webb)
had written to Absa to cancel the Deed of Suretyship,
and the applicant accepted that Webb had done so. He thereafter
worked for
a few years in Harrismith and then relocated to Pretoria
at the end of 2019, where he took up employment with an entity known
as
Insulated Structures. He alleges that Harrismith being the small
town that it is, everyone knew of the fallout between him and
Ferreira and that he was no longer involved in the business of
the principal debtor. Two of Absa’s employees who knew
him, one
of whom was personally acquainted with him and his wife, were well
aware of the breakdown in the relationship
between him
and Ferreira and that the appellant had resigned as a member of the
principal debtor.
[10]
The applicant’s further evidence is that Ferreira had
voluntarily liquidated the principal debtor,
Ferreira’s
Catering Equipment CC without the applicant’s knowledge, on 31
August 2017. Ferreira then bought the bulk
of the principal debtor’s
assets at an auction and started a new business called Commercial
Catering Equipment. The
applicant complains further that Absa
“looked on” as the principal debtor was liquidated, has
not proved any claim
against the insolvent estate, had not proceeded
against Ferreira in terms of the Deed of Suretyship that the latter
had signed
approximately a year before the applicant signed his Deed
of Suretyship, and has not proceeded with a claim against Ferreira’s
deceased estate. Prior to his death, Ferreira was also sequestrated,
a fact which Absa must have been aware of, yet did not pursue
a claim
against his insolvent estate.
[11]
There are various reasons for the applicant’s complaints. He
alleges that Absa financed the new business
that Ferreira started and
advanced credit to Ferreira, in spite of his track record with the
principal debtor in this matter, and
allowed the debts in this matter
to escalate. Yet it did not proceed against Ferreira but looks to the
applicant to settle the
debts of the principal debtor. He was never
contacted by Absa nor did the latter make any demand for payment from
him. He attached
financial statements of the principal debtor,
showing much lower amounts that were owed to Absa. This was for the
financial year
end 28 February 2007, which were presented to him
shortly before he became a member of the principal debtor. Without
admitting
liability, he asserts that if Absa had acted diligently,
his exposure would have been drastically limited, and that by its
actions,
Absa has caused him undue prejudice.
[12]
A further annexure to the applicant’s founding papers was the
financial statements of the principal
debtor for the year ending 28
February 2009, from which it is apparent that principal debtor’s
liability to Absa was secured
by bonds over certain immovable
properties, one of which was sold during the period 2006 to 2007. A
third property mentioned by
the applicant is one owned by an entity
known as Purple Plum Properties 152 (Pty) Ltd (Purple Plum), and
situated at 1[…]
M[…] Street Harrismith. This is the
premises from which the principal debtor conducted its business.
Ferreira and Piet Webb,
were directors of Purple Plum. A bond was
registered over this property in favour of Absa and was cancelled in
2009. It appears
that a bond over this property was then registered
in favour of Firstrand Bank Ltd. The appellant asserts that Absa
released its
security in favour of Firstrand Bank Ltd.
[13]
The applicant also raised a number of issues in respect of the
summons and supporting documents, the originals
of which Absa claims
to have lost. The appellant, in essence, disputes that the documents
attached to the summons are a true reflection
of the terms he agreed
to, and as such, it also does not reflect how the amount claimed in
the summons was calculated. I mention
that Ferreira and Piet Webb,
the accountant, have both passed away. The applicant contends that
has been left in a position that
he was not able to gather the
all the information he needed, in respect of the running of the
principal debtor’s business.
The applicant contends that he has
raised triable issues and has demonstrated that he has a good defence
to Absa’s claims.
[14]
I pause to mention that Absa initially raised a point
in limine
,
opposing the application for condonation, in that the applicant did
not bring a substantive application for condonation, nor did
he give
a full or proper explanation for the delay. At the start of
proceedings before this court, Absa indicated that they would
not
pursue their opposition to condonation. The court was satisfied with
the explanation tendered by the applicant for the delay
in filing the
application for rescission and accordingly granted condonation for
such late filing.
[15]
In opposing the application for rescission, Absa alleges in Answer
that the summons was served on the applicant
at the
domicilium
citandi et executandi
(
domicilium
) chosen by the
applicant, who has not given any notice to Absa of a change in the
domicilium
address. Further he has not explained why the
summons was not, or would not have been received, despite being
served on him. He
has therefore failed to show that his default is
that his default was not wilful or grossly negligent. Absa alleges
further that
despite reasonable and diligent efforts it was not able
to locate either the applicant or the second defendant.
[16]
In February 2018, Absa unsuccessfully attempted to serve a Warrant of
Execution (Writ) upon the respondents.
A tracer was engaged during
April 2018 to trace both respondents but they were unsuccessful in
doing so. A further attempt was
made to serve the Writ on the
defendants on 30 August 2018, resulting in the sheriff attaching the
household items I referred to
earlier. Due to the sheriff’s
return being unclear as to whether the attachment was made in respect
of the applicant’s
or the second respondent’s assets, the
matter was held in abeyance.
[17]
In April 2023, a further tracing report was obtained in respect of
the applicant and the second
respondent, showing their respective
residential addresses and that each of them owns immovable property.
A writ was then served
on the applicant at his current residential
address in Gauteng. Absa then concludes that the applicant was aware
of the judgment
much earlier, and “
was at peace with it,
until the writ was served at his current address…”
[18]
Absa denies that the liquidation of the principal debtor or its
failure to lodge a claim against the insolvent
estate of the
principal debtor has any bearing on the applicant’s liability,
and further that it had the discretion whether
or not to institute a
claim against the insolvent estate, without the applicant’s
liability in terms of the Deed of Suretyship
being affected or
reduced. Absa also denies that the defences raised by the applicant
are
bona fide
for the purposes of rescission, and asserts that
none of the complaints raised by the applicant indicate a substantial
defence
in the main action. The applicant merely skirts the issue of
why he should not be held liable for the debts of the principal
debtor
in terms of the Deed of Suretyship, in respect of which no
notice of termination was ever given, nor was it ever validly
cancelled.
He therefore remains liable for the full amount of the
principal debtor’s indebtedness to Absa.
[19]
The provisions Rule 31(2)(b) are relevant to this matter and read
thus:
“
A
defendant may within 20 days after acquiring 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 it deems fit”.
[20]
With regard to the requirement of ‘good cause’ t
he
court has a wide discretion in evaluating this requirement in order
to ensure that justice is done (
Erasmus
Superior Court Practice
RS
22, 2023, D1 Rule 31-11
).
The learned author comprehensively sets out the well established
legal position regarding applications for rescission. What follows
is
a summary thereof.
The court in the often quoted case of
Grant
v Plumbers (Pty) Ltd
1949
(2) SA 470
(O)
at
476–7
,
which has been followed in a long line of cases, provided the
following guidelines in respect of the requirements for an
application for rescission:
(a)
The applicant must give a reasonable
explanation of his default. If it appears that his default was wilful
or that it was due to
gross negligence the court should not come to
his assistance.
(b)
His application must be bona fide and
not made with the intention of merely delaying plaintiff’s
claim.
(c)
He must show that he has a bona fide
defence to 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.
[21]
With regard to
wilful
default, although it is not a requirement that the conduct of
the applicant for rescission must not wilful, the establishment
of
the absence of wilfulness is clearly a component of the good cause to
be shown. The applicant’s explanation for the default
must be
sufficiently full to enable the court to understand how it really
came about, and to assess the applicant’s conduct
and motives.
(
Silber
v Ozen Wholesalers (Pty) Ltd
1954
(2) SA 345
(A)
at
353A).
While
the lack of full reasons renders the application improper, if such
reasons appear clearly from the explanation, the applicant
will still
be entitled to the relief he seeks
Before a person can be said to be in wilful default, the following
elements must be shown:
(a) knowledge
that the action is being brought against him;
(b) a
deliberate refraining from entering appearance, though free to do so;
and
(c)
a certain mental attitude towards the consequences of the
default.
All
three elements must be established before the party can be said to
have been in wilful default. The onus of proof rests ultimately
on
the respondent. It suffices if the applicant shows a
prima facie
case, or the existence of an issue which is fit for trial.
[22]
In the present matter, it is clear that the summons was served at the
applicant’s
domicilium
address on someone unknown to the
applicant. His evidence is that he relocated to Gauteng and no longer
lived at that address.
Absa’s assertion that the applicant has
not explained why he did not receive the summons
does not acknowledge or take into account that the Sheriff’s
return of service in respect of the summons, states that the
applicant is unknown to the person upon whom the summons was served.
Therefore, it is highly probable that the summons did not come
to the
applicant’s attention, which explains his failure to react.
This appears clearly from his explanation.
[23]
I pause to mention that the deponent to the Answering Affidavit
indicated more than once that he has no personal
knowledge of some
matters raised in the Founding Affidavit, despite alleging in para
1.4 of the Founding Affidavit, that the facts
fall within his
personal knowledge. It is against that position that some of the
generic responses in the Answering Affidavit must
be viewed. Absa
alleges that it engaged tracers in 2018 to trace the applicant
without success. Yet a perusal of the tracer’s
report on 7 May
2018, reflects that the name of the applicant’s employer is
listed, together with his physical work address,
email address and
contact telephone numbers. That is the same entity he was working for
at the time this application was launched
on 7 August 2023. There is
no explanation by Absa for failing to contact the applicant via one
of the methods furnished or why
the summons was not served on him at
his work address. It must also be borne in mind that the applicant
had resigned as a member
of the principal debtor in 2015, and was
assured by Webb that his suretyship was cancelled. It is not
unreasonable to conclude
that he considered himself no longer bound
to the principal debtor.
[24]
The sheriff’s return of service in respect of the Writ on 13
February 2018 lists both the
applicant and the second respondent, as
well as two addresses, without specifying which defendant was serve
at which address. The
same is true of the return of service on 30
August 2018. On that occasion, a large number of items were attached,
but without any
indication at which address the attachment was
effected, nor the defendant whose address that purportedly was. No
explanation is
given by Absa for what steps it took, if any, in the
intervening three years until the applicant and second respondent
were traced
in April 2023. At that stage, the second respondent was
alive, living in Bethlehem, owned a business called Drakensberg
Catering
Equipment and owned immovable property in Harrismith. There
is no evidence that he was sequestrated, nor is there any indication
why Absa did not proceed against him in terms of the Deed of
Suretyship that he signed in August 2007, fortifying the applicant’s
evidence that Absa’s inaction in respect of the second
respondent caused direct prejudice to the applicant. Another point
to
bear in mind is the applicant’s version that since his
resignation from the principal debtor, he started a new business
and
acquired two immovable properties, which were financed by financial
institutions, without any indication that a judgment was
recorded
against his name.
[25]
With regard to the defences raised by the applicant, he set out with
supporting documentation
why he believed that if he owed anything to
Absa, it would be an amount far less than that claimed in the
summons. He also seeks
the opportunity to lead the evidence of
witnesses who would corroborate his version that his suretyship was
meant to be for a limited
period and only in respect of the
overdraft. In addition, it would be relevant to his defence for Absa
to indicate why, in the
face of ample security that it held, it chose
to proceed only against the applicant, albeit that the Deed of
Suretyship allowed
it to do so.
[26]
The fact that Ferreira and Webb are both deceased, places the
applicant in an untenable situation
in that obtaining the necessary
information and documentation he needs to prove his case will require
a great deal of effort to
obtain and their passing has made it doubly
difficult for him to do so. In this regard I point out that the two
confirmatory affidavits
referred to by Absa in Answer, namely those
of Ms L Zietsman and Ms M Mynhardt are neither signed nor
commissioned. The court will
pay no heed to those affidavits, and
accordingly the evidence relevant to those two witness will carry no
weight.
[27]
In my view, the applicant’s explanation for the failure to
defend this action and hence his default,
is reasonable and clear
from the objective evidence. I am also satisfied that he has brought
this application with the intention
of vindicating his rights and not
merely to delay the claims of Absa, and that he has established a
prima
facie
case, fit for trial. Absa, on the other
hand, has not discharged the onus on it to show that the applicant is
in wilful default.
Although Absa attached relevant documentation and
resolutions indicating that the applicant had bound himself for the
payment of
the principal debtor’s indebtedness to Absa, the
points I made regarding the applicant’s version and his
intention
to bring this application still hold true
[28]
In the circumstances I make the following order:
28.1
The application for condonation is granted
28.2
The application for rescission is granted
28.3
The Warrant of Execution issued by the Registrar of this Division is
hereby set aside
28.4
The costs of this application will be costs in the main action.
S
NAIDOO J
On
Behalf of the Applicants:
Adv
LW De Beer
Instructed
by:
Pretorius
Le Roux Inc
c/o
Kramer Weihmann Inc
KW
Building
25
Barnes Street
Bloemfontein
(Ref:
B Vorster/PM/LB2566)
On
Behalf of the First
Respondent:
Adv
HJ Van Der Merwe
Instructed
by:
EG
Cooper Majiedt Inc
17
Third Avenue
Westdene
Bloemfontein
(Ref:
MM/LM/BK2901)