Brief Summary

Summary Judgment — Application for summary judgment — Plaintiff seeking payment and declaration of immovable property executable — Defendants opposing without filing an affidavit — Court considering simultaneous applications for summary judgment and executability — Defendants arguing lis alibi pendens and deficiencies in supporting affidavits — Court finding that summary judgment application can include order for executability under Rule 46A — Plaintiff's compliance with procedural requirements deemed sufficient — Summary judgment granted, declaring immovable property executable.

Comprehensive Summary

Summary of Judgment

1. Introduction

This matter concerned an application for summary judgment brought in the Gauteng Division of the High Court, Pretoria. The applicant/plaintiff, Changing Tides 17 (Pty) Ltd N.O (a registered credit provider), sought judgment against the first and second respondents/defendants, Gertpetrus J.S. Rademeyer and Salome Rademeyer, who were sued jointly and severally.

The proceedings arose after the plaintiff issued summons claiming payment of an outstanding mortgage-loan indebtedness and ancillary relief, including an order declaring a residential immovable property specially executable. After service of summons, the defendants delivered a notice of intention to defend, whereafter the plaintiff launched a summary judgment application supported by an affidavit as contemplated in Uniform Rule 32(2).

Because execution was sought against a residential property, the plaintiff also pursued relief under Uniform Rule 46A. A further notice of motion and affidavit, aligned with the requirements of the Practice Manual (Chapter 10.17), were filed to address the Rule 46A requirements relevant to executability and reserve price. Both the summary judgment application and the Rule 46A application were set down for hearing together.

The defendants opposed both applications but filed no opposing affidavits, electing to argue on the papers as they stood. The matter was initially set down for 8 May 2019 but, due to that date being declared a public holiday, it was heard on 10 May 2019, with judgment delivered on 31 May 2019.

The general subject-matter of the dispute concerned enforcement of a mortgage-loan debt by summary judgment and the procedural and substantive requirements for an order declaring a primary residence specially executable, including the interaction between Rule 32 (summary judgment) and Rule 46A (execution against residential immovable property).

2. Material Facts

It was undisputed that the plaintiff’s claim was founded on a mortgage-loan indebtedness secured by a bond registered over an immovable property described in the order, which the plaintiff pleaded to be residential property. The plaintiff’s summons pleaded the cause of action and, in anticipation of seeking execution against a residence, included allegations addressing Rule 46A and indicating that an application on notice would be made to declare the property specially executable.

The procedural steps were also effectively common cause. After the defendants entered an intention to defend, the plaintiff brought an application for summary judgment supported by an affidavit under Rule 32(2). Separately, the plaintiff filed a notice of motion under Rule 46A with a supporting affidavit intended to satisfy the Practice Manual’s Chapter 10.17 requirements.

On the merits relevant to executability, the plaintiff’s Rule 46A affidavit set out the defendants’ arrears and payment history. The court recorded that the arrears were nearing R1 million, equating to 55.58 missed instalments of R23 375.91 per month, and that the last payment received was on 9 September 2015 in the amount of R1 589. The court treated the breach as common cause, and noted that the outstanding amount was increasing.

The plaintiff placed property valuation information before the court. The estimated market value was R1 500 000 and the estimated forced-sale value was R1 200 000. The plaintiff also provided information about expenses and costs expected to be incurred in preparing for and conducting the sale in execution. On the strength of these valuations and costs, the court considered an appropriate reserve price.

Where disputes were raised, they were procedural and legal in nature rather than factual disputes on the indebtedness. The defendants did not put up facts by affidavit to contradict the plaintiff’s allegations either on the debt or on the Rule 46A considerations; instead, they advanced arguments directed at whether the applications and supporting affidavits complied with the applicable rules, and whether the deponents had adequate personal knowledge.

3. Legal Issues

The central questions the court was required to determine concerned the procedural permissibility and adequacy of seeking, within summary judgment proceedings, both a money judgment and an order declaring residential immovable property specially executable.

A first legal issue was whether the simultaneous pursuit of relief under Rule 32 and Rule 46A (including the filing of a separate Rule 46A notice of motion and affidavit) created a procedural bar framed by the defendants as lis alibi pendens, given that similar executability relief was also sought in the summary judgment papers.

A second issue concerned compliance with Rule 32(2). The defendants contended that the summary judgment affidavit did not satisfy the requirement that the deponent swear positively to the facts verifying the cause of action, because the deponent’s personal knowledge was said to be derived in part from unspecified “enquiries made,” which was argued to imply hearsay or inadequate personal knowledge.

A related issue arose regarding the Rule 46A affidavit: whether its deponent had the necessary personal knowledge to depose to the matters relevant to executability, particularly where knowledge was described as arising from access to computer data and documentation.

These issues primarily involved questions of law and procedural compliance, together with the application of legal standards to the facts placed before the court. The setting of a reserve price under Rule 46A entailed an evaluative determination based on the valuation material and anticipated costs presented.

4. Court’s Reasoning

On the alleged lis pendens and the interaction between Rule 32 and Rule 46A, the court rejected the defendants’ contention that the Rule 46A material had to be disregarded because Rule 32(2) contemplates only a single supporting affidavit for summary judgment. The court reasoned that accepting the defendants’ argument would effectively mean that summary judgment could never be obtained in cases where execution against residential immovable property is sought, because Rule 46A requires additional information and a notice procedure directed specifically at executability and the court’s oversight role.

In addressing the procedural “uneasiness” between action proceedings with summary judgment and Rule 46A’s notice-based requirements, the court found guidance in ABSA Bank Ltd v Sawyer. It accepted the approach that foreclosure matters involving a primary residence create a hybrid procedure requiring adherence to Rule 32, Rule 46A, and the Practice Manual. The court agreed with the view that a plaintiff is entitled to pursue summary judgment for the money claim while simultaneously placing before the court the further material required to enable the court to discharge its obligations under Rule 46A when asked to declare a residence specially executable.

The court endorsed the reasoning that the additional affidavit required by the Practice Manual (Chapter 10.17) is directed at execution rather than the money judgment, and that it does not “fall foul” of Rule 32. It concluded that, in the present matter, the summary judgment application read together with the Chapter 10.17 affidavit constituted substantial compliance with Rule 46A, enabling the court to consider the competing interests at stake when execution is sought against a primary residence.

In support of this approach, the court emphasised broader procedural principles drawn from the authorities it cited, including that courts should not apply procedural rules with undue formalism, and that rules should not be interpreted in a manner that undermines their purpose of facilitating justice. It adopted the position that the rules exist to serve the court’s function and should not be applied inflexibly where their language does not compel such rigidity.

Turning to the challenge to the Rule 32(2) affidavit, the court considered the defendants’ argument that the reference to “enquiries made” demonstrated reliance on hearsay and an absence of the required personal knowledge. The court rejected a rigid insistence on first-hand knowledge of every fact by the deponent in matters brought by financial institutions and large corporations, holding that such an insistence is inconsistent with commercial reality and the approach endorsed in Rees and Another v Investec Bank Ltd. It accepted that an official who has access to, and control over, relevant files, records, and documentation, and who has perused those materials to determine the status and extent of the indebtedness, may depose to a summary judgment affidavit in compliance with Rule 32(2).

Applying those principles, the court found that the deponent’s statements regarding access to and control over the relevant records, and the ability to determine the status of the loan and indebtedness, were sufficient. It concluded that the summary judgment affidavit met the requirements of Rule 32(2).

On the challenge to the Rule 46A affidavit, the court similarly rejected the contention that the deponent lacked personal knowledge. It noted that the deponent stated that, as supervisor of the litigation department, he had personal knowledge of the facts stated, and that the defendants had placed no objective facts before the court to demonstrate the contrary. In the absence of opposing affidavits or countervailing evidence, the court was satisfied that the affidavit was adequate for the Rule 46A enquiry.

Finally, on the merits of the Rule 46A relief, the court observed that the defendants had not put up facts to counter the plaintiff’s allegations. The court regarded the arrears, payment history, and ongoing increase of the outstanding debt as significant. It also considered the property valuations (market and forced-sale values) and the anticipated expenses and costs of sale. On this material, it decided that a reserve price should be set and determined that R900 000 was appropriate.

5. Outcome and Relief

The court granted summary judgment against the defendants jointly and severally, the one paying the other to be absolved, for payment of R1 839 535,03, together with interest at 9.10% per annum compounded monthly in arrear from 22 November 2018 to date of payment.

The court also granted relief declaring the specified immovable property, being Portion 3 of Erf 637 Mountainview (PTA) Township, Registration Division JR, Province of Gauteng, measuring 1044 square metres, held by Deed of Transfer 1344076/1990, to be specially executable. The Registrar was authorised to issue a warrant of attachment in respect of the immovable property.

For purposes of the sale in execution, the court set a reserve price of R900 000.

Costs were awarded against the defendants on the attorney and client scale.

Cases Cited

Absa Bank Ltd v Mokebe and related cases 2018 (6) SA 492 (GJ)

ABSA Bank Ltd v Sawyer (2018/17056) [2018] ZAGPJHC 662 (14 December 2018)

Republikeinses Publikasies (Edms) Bpk v Afrikaanse Pers Publikasies (Edms) Bpk 1972 (1) SA 773 (A)

Simmons v Gilbert Hamer & Co Ltd 1963 (1) SA 897 (N)

Riddle v Riddle 1956 (2) SA 739 (C)

Protea Assurance Company Ltd v Vinger 1974 (4) SA 663 (O)

Federated Trust Ltd v Botha 1978 (3) SA 645 (A)

Rees and Another v Investec Bank Ltd 2014 (4) SA 220 (SCA)

Legislation Cited

No legislation was cited in the judgment text provided.

Rules of Court Cited

Uniform Rules of Court, Rule 32(2)

Uniform Rules of Court, Rule 46A

Uniform Rules of Court, Form 2A of Schedule 1 (as referenced in relation to Rule 46A)

Gauteng Division Practice Manual, Chapter 10.17 (affidavit requirements for executability of residential property)

Held

The court held that, in summary judgment proceedings where a plaintiff also seeks an order declaring residential immovable property specially executable, the court is entitled and obliged to consider the Rule 46A material placed before it, and that doing so does not improperly expand Rule 32(2). The summary judgment procedure may operate alongside Rule 46A through a hybrid approach that permits the court to determine the money judgment and executability together.

The court further held that an affidavit supporting summary judgment is not rendered non-compliant merely because the deponent’s knowledge is based on access to institutional records and information, and not first-hand involvement in every underlying fact, particularly in the context of large institutions. On the facts, the court found that the plaintiff’s summary judgment affidavit complied with Rule 32(2), and that the Rule 46A affidavit was adequate.

On the uncontroverted facts concerning arrears, default, valuation evidence, and sale-related costs, the court granted the money judgment, declared the residential property specially executable, authorised a warrant of attachment, and set a reserve price of R900 000, with costs on an attorney-and-client scale.

LEGAL PRINCIPLES

The judgment applied the principle that procedural rules should not be applied with undue formalism where such an approach would undermine their purpose and impede the administration of justice. The court endorsed the notion that rules of procedure are designed to facilitate the court’s work and may be applied flexibly where the language of the rules permits, particularly to avoid outcomes that would make legitimate remedies practically unattainable.

In matters involving foreclosure against residential immovable property, the court applied the principle that Rule 32 (summary judgment) and Rule 46A (judicial oversight over execution against a primary residence) may be implemented together through a hybrid procedure, allowing the court to consider the money claim and executability simultaneously, provided that the plaintiff places before the court the additional information required by Rule 46A and the Practice Manual.

The court also applied the principle that, for purposes of Rule 32(2), personal knowledge in affidavits deposed to on behalf of financial institutions and large corporations may be established through the deponent’s access to, control over, and consideration of relevant institutional records and documentation. A strict requirement of first-hand knowledge of every fact was rejected as inconsistent with commercial reality, and the grant of summary judgment was treated as a fact-based enquiry informed by the adequacy of the verification and the absence of a properly advanced defence on affidavit.

Changing Tides 17 (Pty) Ltd N.O v Rademeyer and Another (1911/2019) [2019] ZAGPPHC 165 (31 May 2019)