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[2021] ZAECELLC 3
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Standard Bank of South Africa v Malusi (1535/2017) [2021] ZAECELLC 3 (11 February 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(EAST
LONDON CIRCUIT LOCAL DIVISION)
REPORTABLE
CASE
NO: EL 1535/2017
ECO
4135/2017
Date
heard: 28 January 2021
Date
delivered: 11
February
2021
In
the matter between:
THE
STANDARD
BANK
OF SOUTH AFRICA
LTD
APPLICANT
and
WONGA
SIMTEMBILE MALUSI
RESPONDENT
JUDGMENT
NOTYESI
AJ:
INTRODUCTION:
[1]
The
application
had
been
launched
on
03 April
2019
in terms
of
rules 46 and
46A
of the
Uniform
Rules of Court for
an
order
declaring
immovable property,
specially
executable
for
the
amount
of
R3 954
690,
18,
interest
thereon
and
costs.
[2]
The respondent, Mr
Wonga
Simthembile
Malusi,
delivered his notice to oppose
on 10
April
2019, and his answering
affidavit
on 21 June 2019. Thereafter, the
applicant
delivered
its
replying affidavit
on
11 July 2019.
The
application was
heard on 28
January 2021.
[3]
It was
conceded
by the
applicant
that
as
at the
time
the
application
was
set
down
for hearing
on
an
opposed basis,
the
respondent
had
since
effected
payment of the
arrears
and was
up
to
date with
all
his
arrears.
Based on the fact
that the
arrears
had been settled
in
full,
the
application
for
execution
had
become
academic.
The
only
issue that that
had
fallen to
be decided was
that
of
the costs occasioned
by the
application for execution.
[4]
The applicant,
in his rule
15A practice notice set out the issue for determination as follows:
"That
the
applicant
is entitled
to
the
costs
occasioned
by
the application
in
terms
of
Rule
46
as
read
with
Rule
46A
of
the
Uniform
Rules
of
Court,
and such
costs
to be
on
the scale
as
between
attorney
and
client
in
accordance
with
the
loan agreement
and mortgage
bond."
[5]
Mr
Wood,
who
appeared for
the
applicant,
reiterated
that the only
issue to
be
decided
was
that
of costs.
He
submitted
the
trite
legal
position that
in
considering the costs
of the
application,
the
court has to
consider
which
party
would
have
been successful
on the
merits of the application.
Mr
Mhlanga,
did
not argue to the contrary.
[6]
Mr
Wood,
pointed
out
that I
should
consider
the
following factors:
(a)
when the application was issued, the respondent had been in arrears
in the amount of R652 948, 60;
(b)
that the last payment
made by
the
respondent
prior to the
institution
of
the
application
was
R100 000,
00,
which
was
paid
on
13
December
2018;
(c)
that
the
respondent has
effected
payment
of
the
arrears
as
ad
hoc
payments and
that the arrears are accordingly
now
up to date; and
(d)
that, as a result of the outstanding amount, the applicant was
entitled to
institute the
application and that the respondent is accordingly
liable for
the
costs of the application.
[7]
Mr
Mhlanga,
submitted
that once the arrears were effectively
paid
and the stop order
reinstated,
the bond was automatically reinstated. The applicant was
not
entitled
to proceed with the execution application. The respondent attacked
the applicant's
decision
to
institute
this
application
after
obtaining
summary
judgment
against the respondent on 4 September 2018. The
submission
by Mr
Mhlanga
was
that,
until that judgment
sounding
in money
was
executed,
the
applicant should not have
l
aunched
this application. The respondent submitted that he had assets for the
realisation of the summary judgment.
DISCUSSION
[8]
The
trite
legal
principle
on
costs
is that
they
generally
follow
the
event.
This
means
that the successful
party
must be awarded costs.
This
is the basic Rule on
which
the
court
exercises
its
discretion
in adjudicating
the
issue
of
costs.
The
principle
that
costs should follow the
event can only
be departed
on good
cause
shown.
Masande
Ladlokova
v
Minister
of
Correctional
Services
and
Another
(see
unreported decision of the Eastern Cape Judgement
under Case No.: 1076/2006 delivered
by Pakade, J and authorities
referred to therein).
[9]
There
must
be substantial
success
before
a
party
can
be said to
have
been successful
for
the
purpose
of
having
costs
awarded
in his
or
her favour.
In
Fleming
v
Johnson
&
Richardson
1903
TS 319
Innes CJ said at 325:
"It
is
a sound
Rule
that
where a plaintiff
is
compelled
to come
to
court and recovers a substantial sum which he would not have
recovered had he not come to court,
then
he should be awarded his costs."
[10]
This principle was confirmed in numerous cases by the Supreme Court
of Appeal such as
Texas
Co
(SA) Ltd v Cape
Town
Municipality
1926 AD 467
at 488 and the recent case of
Stiff v QData Distribution
(Pty) Ltd
2003 (2) SA
336
(SCA).
In the latter case Mthiyane JA had the following to
say at 343 C-D:
"Nor
has it been
the
practice
to
deny
full costs
to a party
who
achieved substantial
success.
In
Golding
v
Torch
Printing
&
Publishing
Co
(Pty) Ltd
&
Others
1948
(3) SA
1067
(C) at 1092
a
plaintiff who had succeeded on all the
major issues raised but failed on some minor issues,
was held to be entitled
to all his costs.
In casu
the
plaintiff
has
been
found
to be entitled
to
payment
of its
full claim
together
with mora
interest
and
has been
unsuccessful
only
on
a minor issue.
In
the exercise
of
our discretion and having regard to the above principle,
there is no basis for denying the
plaintiff its full costs."
[11]
In
this
matter the proceedings were instituted on 3
April
2019 after unsuccessful attempts
were
made to
execute
the
summary
judgment. A writ
of
execution was
issued
out
of
court
on
21
September
2018.
A
return
of
service
dated
4 October
2018
indicates
that
the
respondent
informed
the
sheriff
that
he was
unable
to pay and had no executable
property
other than the bonded property, and the sheriff
issued a
nulla
bona
return.
On the
same
day, the
respondent
allegedly signed
a
nulla
bona-certificate wherein
he
admitted
that he
was unable to pay and
had no property to satisfy the judgment
debt.
[12]
Surprisingly, on 13 December 2018 the respondent paid a sum of R100
000 and, thereafter, he made the following payments:
•
R20
000,
on
7
March
2019;
•
R120
000,
on
1
April
2019;
•
R200
000,
on
17
May
2019;
•
R145
000
on
28 May
2019.
•
R100
000, on
4
June
2019;
and
•
R150
000, on
3
July
2019.
[13]
The debit order in the sum of R47 552, 05 was
processed on 7 June 2019 and it
was
indeed
honoured. The respondent
makes
these allegations
in his
answering affidavit:
"On
the 7th of June 2019, an amount of R47 552, 05, was through a stop
order, and
by
the applicant herein deducted from the
respondent's account, I
have to
point
out
that
this
is
indicative of
the
automatic
reinstatement of the
mortgage
bond and
is
in
line
with
the
Nkatha Judgment.
The payments
alleged herein above
are all attached
herein as, WSM-04,"
[14]
In its response, the
applicant admitted
all
the payments referred to above and
the
stop
order,
but sought
to
counter
the
respondent's
allegations
by alleging that
"despite
the
payments,
the
home
loan account of the
defendant/respondent
as at the date herein
is
1.44 months
in
arrears
and
is in arrears
in
the sum
of
R68
711,
32. This is
after
consideration has
been
taken
to
the
payment of R150 000, 00
paid on Wednesday, 3 July 2019."
[15]
Mr
Wood
further
pointed
to the
return of service and
the
nulla
bona-certificate
to justify
the
launch of this
application.
The
return
of service
and
nulla
bona
certificate
are
disputed by the respondent. The probabilities are overwhelming
in light of
the
admitted
payments
made
subsequent
to
the
judgment
that
the
respondent
had
means,
other
than
the
mortgage
property,
to
settle
his
indebtedness to the applicant.
[16]
The concession that the applicant was
no
longer pursuing
the main
relief in this
application is
only contained in
the
applicant's heads of arguments, which were served on 09 of September
2020.
There is no specific
date when the applicant became aware
that
the arrears had
been
settled.
The
applicant has not deemed
it
necessary
to
file
a
supplementary affidavit
dealing
with
the
allegations
relating to the date of payment in respect of the alleged outstanding
arrears, upon
which
the
appl
i
cant
relied
to
justify an
order
of
costs
in
this
application pursuant to the receipt of the respondent's answering
affidavit.
[17]
I am satisfied that the
respondent effectively
reinstated the mortgage
bond
during or about June 2019 when the amount of R47
552, 05 was processed through
a
stop
order
which
was received by
the
applicant. There
was
no
basis to
continue
with
this
application
after
this
payment
was
received
in
June
2019.
The applicant is in possession of its own
records. The applicant should know when payments are received and
the status of
the
account.
The
respondent, correctly in my
view,
argued
that in accordance with the judgment
of
Nomsa Nkatha v
First
National
Bank and Others
(CCT73/15)
[2016]
ZACC 12
;
2016(6) BCLR
794(CC);
2016(4)
SA
257
(CC},
the
bond
with
the
applicant
was
reinstated. The
evidence
shows
that
the
bond
was
reinstated
during
June
2019 when
the
deduction of
R47
552,
05
was
processed
and
honoured.
[18]
I
do not
agree
with
Mr
Wood
that
the respondent should have
made
a
tender
of
costs at that
stage.
The
reinstatement
of the
bond
is a matter of law. The
applicant should have
known, once it received the respondent's
answering
affidavit that it
was not going to obtain any relief other than a costs order. It
should have
demanded
for
costs
from the
respondents.
There is
no
indication
that
the applicant before
delivery
of
the heads of argument, had informed the respondent that it
was no longer pursuing the application, but only
insists on costs.
The
respondent
was
entitled
to
oppose
the
application
after
the
agreement
had
been
revived
.
[19]
That is not the end of the matter.
At the time the application was
instituted the respondent was in
arrears and the application was initially set
down for hearing on
16
April
2019.
The applicant was
armed
with the
return of service
and the
nulla
bona-certificate
which both documents,
indicate
that the respondent was unable to pay and had no
movable
property other than the mortgage
property.
When
the application
is
considered before
the
delivery
of
the
answering
affidavit,
the
applicant was justified
to
launch
and pursue the
application. The
applicant
had an unsatisfied
summary
judgment
and the account
of the
respondent
was in
arrears.
The court hearing the application would have considered
all those factors
including
the circumstances
of the
respondent.
In my view, the
applicant
is
entitled to
costs,
but excluding all the
costs
incurred
after
delivery of the answering
affidavit.
[20]
The parties in their contract agreed that legal
costs for debt recovery will be as between attorney
and own
client.
The
court
must be slow to
interfere
with the
contract
of the
parties.
On the
basis of the
agreement
between
the
applicant and the
respondent
contained
in Clause
1.2.3.1,
costs will
be on attorney
and
client
scale.
CONCLUSION
[21]
I am
satisfied
that
this
court
retains
its
discretion
in
awarding
costs
to
a
successful party.
I have considered the conduct each party in this
litigation. I
have
also
taken
into
account
the
fact
that
the
applicant
in
the
summary
judgment
initially included the rule 46 and 46A
application, though it
was
not
pursued
at
the
hearing
of
the
summary
judgment
in
line
with
the
practice
directives,
as
Mr
Wood
correctly
submitted.
[22]
I
have
pointed
out
that
the
applicant
was
entitled
to institute
the rule
46
and
46A
application and pursue such application, before
the delivery of the answering
affidavit.
However, the application should not have been
pursued after the delivery
of
answering
affidavit.
I make
an
appropriate
order
of
costs,
taking
into
account all
the
circumstances of
this case,
which I
have
set
out
above.
[23]
In the result, it is ordered that:
1.
The
respondent
pay the applicant's
costs
of the application
up to the
delivery of the respondent's answering affidavit, such costs to be
paid on an attorney and client scale.
2.
The costs referred to
in para 1 shall exclude the reserved costs
of 25 June
2019
in
terms
of
which,
each
party
is
directed
to
pay
its
own
costs.
M
NOTYESI
ACTING JUDGE OF THE HIGH
COURT
Appearances:
Counsel
for the Applicant: MR
C B WOOD
Instructed
by: DRAKE
FLEMMER
&
ORSMOND
Quenera
Park
12
Quenera Drive Beacon Bay
East London
Counsel
for the Respondent:
MR MHLANGA
Instructed
by: Ezwena Attorneys
Clo
Precious
Muleya Attorneys
19
Quanza Street
Quigney
East
London