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[2022] ZAGPJHC 644
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First National Bank v Pearl (18251/2021) [2022] ZAGPJHC 644 (2 September 2022)

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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, JOHANNESBURG)
Case
No: 18251/2021
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED:
NO
DATE:
02 SEPTEMBER 2022
In
the matter between:
First
National
Bank

Plaintiff
And
Mucabel
Pearl

Defendant
Id
No. [....]
Judgment
Thupaatlase
AJ
Introduction
“
The value and
protection afforded to the home have been captured in several
well-known maxims such as: ‘a man’s home
is his castle’;
‘home is where the heart is’; and safe as houses. These
maxims encapsulate the ideology that
a home is much more than a mere
object. Most individuals are emotionally attached to their homes and
loss of such asset can be
severely detrimental to a person’s
well-being. Naturally it is accepted that reasonable efforts should
be taken to avoid
such deprivation, and several laws have provided
protection for the home or to the right to have access to adequate
housing
[1]
.”
Background
[1]
This is an application in terms of Rules 31(5)
[2]
;
46 (1) (ii)
[3]
and 46(A)
(8)
[4]
.The Applicant issued
summons against the Respondent for cancellation of loan agreement and
payment of the amount of R 686 000.00
as result of the Defendant
falling into arrears in her bond repayment. Despite the fact that
these proceedings started as action
procedure following issuing of
summons, the parties will for ease of reference be referred to as
cited in the motion proceedings
for default judgment and ancillary
orders.
[2]
The Respondent was properly served and did not enter an appearance to
defend. She has, however made a point that whenever the
matter is
enrolled, she appears unrepresented to fend off attempts to obtain
judgment against her.
[3]
It is perhaps apt at this early stage of the judgment to sketch the
history of this matter in order to understand the context.
In 2015
the Applicant and Respondent entered into a home loan agreement
whereby the Applicant advanced to the Respondent the sum
of R
635 000.00 as capital amount. There were other fees added to the
capital amount. These included additional fees to cover
all interest,
charges for legal fees and any damages suffered by the lender. The
capital amount added to R 762 000.00. At
12.6% interest rate the
total payable amount totalled R 1 771 552.19. The monthly
instalment was calculated at R 7 324.19
over 240 months period.
[4]
The Respondent fell into arrears and on the 12 February 2021 the
Applicant caused a letter contemplated by section 129 of the
National
Credit Act, 2008. The letter called upon the Respondent to cure her
default within ten (10) days. The Respondent was invited
to discuss
possibility of making a firm arrangement to bring the arrears up to
date. The letter was sent by registered mail.
[5]
In addition the Applicant’s attorneys also sent an email to the
same effect with the section 129 letter attached on the
12 February
2021.By her email dated 17
February 2021, the Respondent
replied and expressed surprise that there was threat of a legal
action against her. At that time the
arrear amount was R 36 000.00.
[6]
The Applicant subsequently issued summons on the 07 April 2021 which
was served on the Respondent on the 29 April 2021. The
summons was
served at the chosen
domicilium
citandi executandi
.
The Respondent was in terms of the computation of
dies
provided by the Rules required to enter a Notice of Intention to
Defend in terms of Rule 19 by the 13 May 2021
[5]
and a Plea by the 10 June 2021 in terms of Rule 22
[6]
.
She failed to respond as required by the rules.
[7]
As result of the failure to respond to the summons, the Applicant
approached court to a default judgment for monetary judgment
and in
addition for order to declare the residential property specially
executable. This is the property that is the subject matter
of the
loan agreement.
[8]
The application was set down for hearing on the 21 September 2021. A
Notice of Motion was served on Respondent, and she appeared
in
person. The court postponed the matter
sine die
and the
Respondent was afforded opportunity to pay off the arrears within a
period of six months from the date of the order. At
that stage the
arrears amounted to R 43 747.35.
[9]
In the event that arrears were not paid within the set timeframe, the
Applicant was granted leave to supplement the application
and set it
down for hearing. In addition, the Applicant was granted leave to
serve such supplementary affidavit and notice of set
down by email.
The Respondent was ordered to pay costs on a punitive scale of
attorney and client scale.
[10]
On the 10 May 2022 the matter was again set down for hearing and
again the Respondent appeared in person and the matter was
removed
from the roll as the date on the draft order was found to be
incorrect. It is worth noting that even at that stage the
Respondent
appeared in person and that there were no opposing papers filed.
[11]
The Applicant again set down the matter for hearing on the 02
August 2022 hence this judgment. The Applicant again seeks the
prayers similar to that of September 2021 and May 2022. The
application
is based on the contention that the Respondent has failed
to defray the arrears as per court order and remains in arrears.
[12]
In support of the application for money judgment in terms of Rule 31
and order for executability, a comprehensive affidavit
was submitted.
The Notice of Motion was duly served on the Respondent, and she
appeared in person on the day of hearing. She did
not file a notice
to oppose or opposing affidavit.
[13]
When the matter was called the counsel for the Applicant and argued
that application be granted, and that the appearance of
Respondent
was a mere tactic to frustrate the Applicant from obtaining a relief
it is entitled to by law. The Respondent was allowed
to address the
court. She maintained her position that the bank was been
unreasonable in dealing with her.
[14]
At the time of hearing the arrears had increased to R 51 851.55.
It is clear that the Respondent has failed to pay arrears.
[15]
The affidavit accompanying this application provides a detailed
account of the numerous instances where the Applicant has tried
to
contact the Respondent to rectify her default. The Respondent has not
taken advantage to make an acceptable arrangement. It
is obvious that
the only time she responds to the Applicant is when the matter is set
down for hearing in court.
[16]
In granting a postponement the court on the on 21 September 2021 was
following on the practice of this division. The salutary
practice is
an endeavour to place the Respondent in a position to settle the
arrears and to secure the bonded property. In
FirstRand
Ltd t/a First National Bank v Zwane and Two Others
[7]
it
was held that
“
a court
faced with an application by a mortgage lender for (i) default
judgment for accelerated full balance of the mortgage loan;
(ii) an
order declaring the mortgaged property executable would, if the
mortgaged property were the debtor’s primary residence,
have a
discretion to postpone both applications to afford the debtor the
opportunity to pay the arrears’’.
[16]
It is abundantly clear that the Respondent was on numerous occasions
granted opportunity to remedy her default and has failed
to honour
her undertakings to do. In the meantime the arrears have continued to
accelerate.
The
Law
[17]
The first issue relates to whether the Applicant is entitled to a
money judgment. As pointed out at the beginning of this judgment,
the
claim of the applicant is based on a breach of a home loan agreement
secured by mortgage bond. There is no plea filed on behalf
of the
respondent. The Applicant is therefore entitled to approach the court
for a default judgment. I am satisfied that the applicant
is entitled
to such relief.
[18]
The second issue and the more difficult one is around the issue of
executability of the immovable property. The court has to
be
satisfied that Rule 46A requirements have been met before such order
can be granted. The Rule 46A gives meaning to Section 26
of the
Constitution. The issue implicates constitutional rights.
[19]
Rule 46A
provides
for judicial oversight, the aim of which is to protect the
constitutional right to adequate housing provided in section
26 of
the Constitution
[8]
. The rule
list several steps that needs to be taken into consideration to grant
an appropriate relief. The court is required to
investigate
alternative means of satisfying the judgment debt. The rule is only
applicable where execution creditor wants to execute
against a
residential property.
[20]
In
ABSA
Bank Ltd v Njolomba and Other Cases
[9]
the court stated that
‘
There
have, of late been a salutary move 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 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
the 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 price and other sale conditions in the event of
execution against property becoming necessary. However, the process
has,
as its aim endeavour, to maintain the mortgage loan and [sic]
rehabilitate the debtor if at all possible.”
[21]
The above quoted passage summarizes and captures the essence of the
state of our law and the same has been recognized by the
Rules Board
in enacting Rule 46A. There is clear recognition that constitutional
protection must be afforded where they are being
implicated.
[22]
The full bench of this division has held
ABSA
Bank Ltd v Mokebe and Related Cases
(Mokebe)
[10]
stated that
“
The
postponement of the money judgment is both desirable and necessary
and is to be heard together with the question of executability,

should any part of the matter be postponed
.”
The court went to state as follows “
Having
decided that piecemeal hearing of applications for foreclosure are
undesirable and not cost effective, the issue of granting
money
judgments separately from the order of executability, does not
arise
[11]
.”
[23]
In
Jaftha
v Schoeman and Others, Van Rooyen v Stoltz and Others
(
Jaftha
)
[12]
the following is said
“
Another
difficulty is that there may be other factors which militate against
a finding that execution is unjustifiable. Such factors
will vary
according to the facts of each case. It might be that the debtor
incurred debts despite the knowledge of his or her inability
to repay
the money and was reckless as to the consequences of incurring the
debt. While it will ordinarily be unjustifiable for
a person to be
rendered homeless where a small amount of money is owed, and where
there are other ways for the creditor to recover
the money lent, this
will not be the case in every execution of this nature”
[24]
The judgment of
Jaftha
[13]
supra
continued that
“
The
interests of creditors must not be overlooked. There might be
circumstances where, notwithstanding the relatively small amount
of
money owed, the creditor’s advantage in execution outweighs the
harm caused to the debtor. In such circumstances, it may
be
justifiable to execute. It is in this sense that a consideration of
the legitimacy of a sale in execution must be seen as a
balancing
process”.
[25]
In
Gundwana
v Steko Development and Others (Gundwana)
[14]
)
the
court stated that
“
An agreement to
put one’s property at risk as security in a mortgage bond does
not equate to a licence for the mortgagee to
enforce execution in bad
faith. I conclude that the willingness of mortgagors to put their
homes forward as security for the loans
they acquire is not by itself
sufficient to put those cases beyond the reach of Jaftha. An
evaluation of the facts of each case
is necessary in order to
determine whether a declaration that hypothecated property
constituting a person’s home is specially
executable, may be
made. It is the kind of evaluation that must be done by a court of
law, not the registrar”.
Application
of facts to the law
[26]
The decision in
Mokebe
has settled the approach
that court should adopt. The decision as already discussed also
encapsulates the approach of the decisions
of
Jaftha
and
Gundwana
. The approach is that the court should not
deal with the matter in a piecemeal fashion and that there should be
judicial oversight.
This is to ensure that the constitutional
imperatives enshrined in Section 26 of the Constitution are
considered. The decision
must also take account of the considerations
enumerated in Rule 46A (8).
[27]
It is important to note that Rule 46A does not prohibit or outlaw
execution against primary residence. The order of execution
against
immovable property can be ordered if there is no other satisfactory
means of satisfying the judgment debt. The Rule also
provides for
alternatives, for example a setting of the reserved price and also
postponement of the application on such terms as
the court may
consider appropriate.
[28
It is trite that the Constitution of South Africa provides for
justiciable socioeconomic rights, and this includes the right
to have
access to adequate housing which is enshrined in s 26 of the
Constitution. The underlying rationale of rule 46A is to impose

procedural rules to give effect to that fundamental right. Rule 46A
must therefore be interpreted purposively against the backdrop
of s
26 of the Constitution, which grants access to housing.
[29]
In this case the Respondent has already benefitted from the
alternative of a postponement and despite such indulgence, she
still
failed to remedy her default. As stated in
Gundwana
‘the interests of the creditor’ should also be
considered. A further alternative that has been stipulated by the
rule
is ‘setting of a reserve price’. The arrear amount
is continuing to increase including municipal rates. The costs which

were awarded on the 21 September 2021 were on a scale of attorney and
client scale. These costs will also increase the indebtedness
of the
Respondent.
[30]
The conduct of the Applicant cannot be characterized as malicious.
The Applicant has afforded the Respondent opportunity to
bring her
arrears up to date without any success. It is clear that the
Respondent is unable to meet her obligations in terms of
loan
agreement. A further postponement of this matter will be the
prejudice of both the Applicant and the Respondent. The Respondent

will continue to attract a higher indebtedness.
[31]
The setting of a reserve price seeks to protect the debtor by
ensuring that homes are not sold for extremely low prices. In
case of
Petrus
Johannes Bestbier and Others v Nedbank Limited
[15]
the SCA stated as follows regarding Rule 46A stated that “
the
aim of rule 46A is to assist the Court in considering whether the s
26 rights of the judgment debtor would be violated if his/her
house
is sold in execution. Rule 46A contains procedural prescripts, not
substantive law. The requirement of judicial oversight
in s 26 of the
Constitution must be viewed in light of South Africa’s history
of forced removals and racist evictions during
apartheid and the need
to protect security of tenure of all South Africans”
Conclusion
[32]
Having considered the matter and all factors that were placed before
the court I am of the view that default judgment be granted
in favour
of the Applicant and that to ameliorate the hardship that the
Respondent may endure, that a reserve price be set. It
is my
considered view that postponing the matter further will not serve the
interests of any of the parties in this matter. As
indicated above
the arrears have continued to rise since the litigation started.
[33] In setting the
reserve price the court had regard to the market value of the
property, which according to the Applicant is
about R 780 000.00,
the municipality evaluation of the property which is R 606 000.
The amount owing as rates and taxes
which is currently about R
15 579.77. The reserve price has been set at 70% of all
outstanding amounts quoted herein.
Judgment
is granted against
the Respondent, in the following
terms:
1.
Payment of the sum of R631,293.19;
2.
Interest on the aforesaid amount at the rate of
10.35% per annum, calculated daily and compounded monthly, from 25
February 2021
to date of payment, both days inclusive;
3.
An order declaring
ERF
[....] COSMO CITY EXTENSION [....] TOWNSHIP, REGISTRATION DIVISION
I.Q., THE PROVINCE OF GAUTENG, MEASURING 280 (TWO HUNDRED
AND EIGHTY)
SQUARE METRES held by the Defendant under deed of transfer T [....]
executable for the said sum
.
1.
that the property referred to in (3) above
may be sold by the sheriff of the High Court subject to a reserve
price of R 469 520.
00; and
2.
if the reserve price is not achieved at the
first sale in execution, then and in that event, the property
referred to in (3) above
may be sold by the sheriff of the High Court
at any subsequent sale in execution to be held on a different day to
the highest bidder
without a reserve price
;
4.
Costs of suit on an attorney and client
scale;
5.
The Registrar of this court is directed to
issue a writ of attachment to enable the Sheriff to attach the
aforesaid property, in
satisfaction of the judgment debt, interest
and costs.
6.
The Respondent is advised that the
provisions of
Section 129(3)
and (4) of the
National Credit Act, 34
of 2005
, apply to the judgment granted in this matter. The Respondent
may prevent the sale of the property as aforesaid if they pay to the

Applicant all of the arrear amounts owing by the Respondent to the
Applicant together with all enforcement costs and default charges

prior to the property being sold in execution.
7.
The arrears amounts and the enforcement
costs referred to in paragraph (6) above, may be obtained from the
Applicant. The Respondent
is advised that the arrear amount is not
the full amount of the judgment debt, but the arrear amount owing by
the Respondent to
the Applicant, without reference to the accelerated
amount.
Thupaatlase AJ
Date of Hearing: 02
August 2022
Date of Judgment: 02
September 2022
APPEARANCES:
Plaintiff: Charl Cilliers
Inc.
Defendant: In person
[1]
C Singh “To foreclose: Revealing the ‘cracks’
within the residential foreclosure process in South Africa”

2019 SA Merc LJ 147
[2]
(5) (a) Whenever a defendant is in default of delivery of notice of
intention to defend or of a plea, the plaintiff, who wishes
to
obtain judgment by default, shall where each of the claims is for
debt or liquidated demand, file with the registrar a written

application for judgment against such defendant; Provided if the
application is for an order declaring the residential property

specially executable, the registrar must refer such application to
the court.
[3]
(1) (a) No writ of execution against the immovable property of any
judgment debtor shall issue until-
(ii)
such immovable property shall have been declared to be specially
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.
[4]
(8) A court considering an application under this rule may-
(a)
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;
(b)
order
the furnishing by-
(i)   a
municipality of rates due to it by the judgment debtor; or
(ii)   a
body corporate of levies due to it by the judgment debtor;
(c)
on
good cause shown, condone-
(i)   failure
to provide any document referred to in subrule (5); or
(ii)   delivery
of an affidavit outside the period prescribed in subrule (6)
(d)
;
(d)
order
execution against the primary residence of a judgment debtor if
there is no other satisfactory means
of satisfying the judgment
debt;
(e)
set
a reserve price;
(f)
postpone
the application on such terms as it may consider appropriate;
(g)
refuse
the application if it has no merit;
(h)
make
an appropriate order as to costs, including a punitive order against
a party who delays the finalisation
of an application under this
rule; or
(i)
make
any other appropriate order.
[5]
(1) Subject to the provisions of section 27 of the Act, the
defendant in every civil action shall be allowed ten days after
service of summons on him within which to deliver a notice of
intention to defend, either personally or through his attorney:

Provided that the days between 16 December and 15 January, both
inclusive, shall not be counted in the time allowed within which
to
deliver a notice of intention to defend.
[6]
(1) Where a defendant has delivered notice of intention to defend,
he shall within twenty days after the service upon him of
a
declaration or within twenty days after delivery of such notice in
respect of a combined summons, deliver a plea with or without
a
claim in reconvention, or an exception with or without application
to strike out.
[7]
2016
(6) SA 400
(GJ) at 404A
[8]
1) Everyone has a right to have access to adequate
housing. 2) The state must take reasonable legislative and other

measures within its available resources to achieve the progressive
realisation of this right.
[9]
2018
(5) SA 548
(GJ) at 550-551C
[10]
2018
(6) SA 492
at para [33]
[11]
Mokebe
footnote 10 at para [47]
[12]
[2004] ZACC 25
;
2005 (2) SA 140
(CC);
2005 (1) BCLR 78
(CC) at para
[41]
[13]
Jaftha footnote 10 at para [42]
[14]
[2011] ZACC 14
;
2011 (3) SA 608
(CC);
2011 (8) BCLR 792
(CC at
paras [48] and [49]
[15]
(Case No. 150/2021)
[2022] ZASCA 88
(13 June 2022) at para [20]