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[2019] ZAFSHC 246
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Oosthuizen v Absa Bank Ltd In Re: Absa Bank Ltd v Oosthuizen (2062/2017) [2019] ZAFSHC 246 (19 December 2019)
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Certain
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case no: 2062/2017
In the matter between:
GERRIT
OOSTHUIZEN APPELLANT
[Identity number: […]]
and
ABSA BANK LTD
[Registration number:
1986/004794/06]
RESPONDENT
In re:
ABSA BANK
LTD PLAINTIFF
and
GERRIT
OOSTHUIZEN DEFENDANT
HEARD
ON:
25 OCTOBER 2019
CORAM:
MURRAY AJ
JUDGMENT
BY:
MURRAY AJ
DELIVERED
ON:
19 DECEMBER
2019
[1]
The Applicant (the Defendant in the main action) seeks leave to
appeal against the whole of the 19 September 2019 judgment and
order
of Pohl AJ in which the Respondent (the Plaintiff in the main action)
was granted judgment as if on an unopposed basis against
the
Applicant in the amount of R963 074.91 with interest thereon at
the rate of 10.75% as from 21 August 2018 to date of payment,
and
costs of suit on the scale as between attorney and client.
[2]
The said judgment followed upon the Respondent’s debt
enforcement against the Applicant by repossessing a tractor, as
contemplated in sections 127 to 131 of the National Credit Act
[1]
(“the NCA”). The repossession was the result of the
Applicant’s default on the written instalment sales agreement
which he had concluded with the Respondent for the tractor. The
Respondent obtained a default order from the Registrar on
28 August
2017 which cancelled the agreement and ordered the return of the
tractor, a
Mega-Agri
2014 New Claas Axion 950.
[3]
The Registrar granted the 2017 default judgment against the Applicant
in the following terms
[2]
:
“
1.
Confirmation of cancellation of the agreement;
2.
That the Defendant be ordered to return the following goods and
Registration documents to the Plaintiff:
Make:
Mega-Agri
Description:
2014 New Claas Axion 950 tractor
Engine nr: 00020034392
Chassis nr:
ACF950CABD4WD0119
3.
That
leave be granted to the
Plaintiff to approach the HonourableCourt on the
same papers, duly amplified where
necessary, for Damages;
[my
emphasis]
4.
Further and/or alternative relief.”
[4]
Paragraphs 1 and 2 of the Registrar’s judgment therefore only
ordered the cancellation of the agreement and the return
of the
relevant tractor to the Respondent. No ‘judgment sounding in
money’ was granted.
[5]
Paragraph 3 did not grant monetary relief, or create a ‘judgment
sounding in money’ either. All it did was
to grant the
Respondent the
right
to return to court on duly supplemented papers after certain
conditions have been met, to claim damages, if any, in respect of
the
tractor.
[3]
In other
words, it merely granted the Respondent the right to approach the
court for a judgment sounding in money and to
commence with the
second stage of the proceedings once the repossessed vehicle had been
sold or repaired and its value determined.
Implicit in such
right, of course, is that whatever damages were to be claimed, would
need to be proven. Which is why that
stage of the default
judgment needs to be adjudicated in open court.
[6] Two years after
having obtained such leave, the Respondent exercised the right which
it had gained from the order in paragraph
3 and commenced with the
second stage of the proceedings by applying to have the damages claim
adjudicated. It accordingly
filed a Notice of Set Down on 21
June 2019 which read as follows:
“
WHEREFORE
the Plaintiff
moves for Judgment
against the Defendant as follows:
1.
Payment of the amount of R 963 074.91;
2.
Interest on the aforesaid amount at the
rate of 10.75% per annum from 21 August 2018 to date of final
payment;
3.
Costs of suit on an attorney and client
scale;
4.
Further and or alternative relief.”
[my
underlining]
[7] The Respondent’s
Notice of Set Down was supported by a Damages Affidavit.
Paragraph 2 thereof reads as follows:
“
The
Applicant obtained
a repossession order
against the Respondent under the above case number, a copy of which
judgment is attached hereto marked Annexure “A”.
In
terms thereof, and in particular in terms of prayer 5
[sic]
,
the Plaintiff would be entitled
to
approach the above Honourable Court for judgment sounding in money
once its damages were quantified
.”
[my underlining]
[8] In
view of the above, Mr Pienaar’s argument that the Respondent’s
claim as set out in the combined summons (Claim
3 therein) provides
for a two-stage procedure, makes sense. So does his submission
that the relief sought in the Respondent’s
Notice of Set Down
and the Damages Affidavit is a separate distinct claim from the one
that was claimed in the paragraph 3 in the
Rule 31(5) application to
the Registrar for default judgment. The two notices have different
purposes and requests different types
of relief in two distinct
stages of the Default Judgment procedure.
[9]
Stage 1, introduced by the ‘Notice in terms of Rule 31(5)’
is the ‘repossession application’, which
claims
cancellation of the agreement, delivery of the vehicle, and leave to
bring a damages application for a judgment sounding
in money. Since
it is based on a debt the repossession claim can be handled by the
Registrar.
[10]
Stage 2 claims damages and involves judicial oversight since evidence
is needed for the damages claim to be determined, and
that claim
therefore needs to be heard and adjudicated by a judge in open court.
[11]
The ‘Notice in terms of Rule 31(5)’ was therefore only
the first step in the debt enforcement process, namely to
create the
legal right (the cancellation) to enforce the claim for repossession
(the delivery of the vehicle), and to obtain the
right
to claim damages (the leave). The paragraph granting the right to
claim damages did not have a final effect, therefore, since it
was
not dispositive of a substantial part of main action. It merely
opened the door for an application in the second stage
of the
proceedings to have the damages claim adjudicated.
[12]
The Notice of Set Down then introduced the said second stage which
could commence only after the vehicle had been returned
and the
damages could be quantified by assigning a monetary value to the
repossessed vehicle and subtracting that from the amount
of the debt
as at that time.
The second stage of the default judgment proceedings then comprised
of the application for and the adjudication of the claim
sounding in
money.
[13]
It is only logical that a defendant should then be allowed to dispute
the quantification process of the damages, as Mr Heymans
correctly
conceded.
[14]
The Respondent relied on the application procedure for this final
step. It instituted its Damages Claim by way of a Notice
of Set
Down supported by a Damages Affidavit. But after the
Respondent’s Notice of Intention to Oppose and Notice of
Intention to Defend were filed, instead of amending its particulars
of claim to set out the quantification procedure followed to
sell the
tractor and to reflect the price of the repossessed tractor and the
balance allegedly still owed by the Applicant, it
pursued its claim
for damages still on an ‘unopposed default’ basis on
application.
[15]
The Applicant’s Notice of Intention to Oppose the damages
claim, was filed late, on 15 July 2019, and so was his Notice
of
Intention to defend the damages claim in the Main Action, filed on 8
August 2019. But both were filed before the application
for judgment
sounding in money had been considered or adjudicated, therefore, in
my view, before the Default Judgment’s second
stage had been
completed.
[16]
Rule 19(5) of the Uniform Rules of Court expressly allows such notice
to be delivered after the period specified in the Summons
or in Rule
19(2) as long as it is done before Default Judgment had been
granted. The effect of Rule 19(5) is that the late
delivery of
a notice of intention to defend does not entitle a plaintiff
to
apply for or proceed with
an application for default judgment.
[4]
The penalty for such late filing after the plaintiff had lodged
the application for judgment by default, is for the defendant
to pay
the plaintiff’s costs.
[17]
In my view the relevant ‘application for default judgment’
in this case is the application based on the claim for
damages for
judgment sounding in money. Since there was a Notice of
Intention to Oppose as well as a Notice of Intention
to Defend, both
delivered after the application for damages was filed, but before the
judgment sounding in money was granted on
19 September 2019, the
claim for damages (Claim 3 in the particulars of claim), in the main
action should have proceeded on a defended
basis.
[18] I
do not agree that the Applicant had to have had the Registrar’s
Default Judgment of 2017 set aside first if it wanted
to defend the
damages part of the claim. Paragraph 3 of that order did
not have the effect of a final judgment. As
stated above, in my
view it merely enabled and introduced the second stage of the default
judgment procedure, namely the quantification
and proof of the
damages claim on evidence in open court. It did not entitle the
Respondent to have the claim adjudicated
on an unopposed default
basis.
[19] I
agree with Mr Pienaar, therefore, that the Respondent, in view of the
Opposing Affidavit, was not entitled and should
not have been
allowed to proceed with the application for default judgment as if on
an unopposed or undefended basis.
[20]
In
Baliso
v Firstrand Bank Ltd t/a Wesbank
[5]
the
Constitutional Court stated that:
“
In
terms of our civil procedure, default judgment for a debt or
liquidated demand is granted on the acceptance of the allegations
as
set out in the summons, without any evidence. Where the claim
is not for a debt or liquidated demand, the court may, after
hearing
evidence, grant judgment. This is usually only evidence on the
amount of unliquidated damages. The reason for not
hearing evidence
on the other factual allegations made in the summons or particulars
of claim is that, because the claim is not
opposed, it may be
accepted that those allegations are admitted and not disputed.”
[21]
In the present case the Applicant did indicate that he wished to
oppose the claim and the allegations in the Application, and
indeed
filed his Opposing Affidavit to the application for judgment sounding
in money. The matter could therefore not have
been regarded and
treated as ‘not disputed’ and judged as if it was
unopposed.
[22] I
agree with the finding in the judgment that the amount of damages
which the Court orders completes the 2017 judgment.
However,
the practical implication of that finding is that the 2017 judgment
was only complete on 19 September 2019 when the judgment
sounding in
money was granted. It does not make sense, with respect, to
then find
in
that 19 September 2019 judgment that the Defendant ‘
could
have and should have’
applied for
rescission of the default judgment “
if
he really wanted to defend the action after default judgment was
granted,
and to then use that as the
basis for Court
a quo’s
rejection of the Appellant’s
defence.
[23]
One of the Applicant’s defences, for instance, is that the
Respondent did not act fast enough to sell the tractor so
that it
diminished in value and the Applicant’s liability for damages
increased. In
Visser
& Potgieter: The Law of Damages
[6]
it
was stated that:
“
It
is a recognized principle in an action for damages that a plaintiff
may not recover damages for loss which is the factual result
of the
defendant’s conduct but could nevertheless have been prevented
if the plaintiff had taken reasonable steps. …
A failure to
prevent the accumulation of damage can be regarded as an omission on
the part of the plantiff to take reasonable steps
to mitigate the
initial loss. … A plaintiff who fails to mitigate his
loss … cannot recover damages in respect
of loss that the
plaintiff could reasonably have prevented.”
[24]
The onus of proving that the Respondent unreasonably failed to
mitigate loss rests upon the Applicant. Consequently the
Applicant may prove that the Respondent should have restricted its
damage or that the Respondent should have used a better or
alternative method to sell the tractor. If the Respondent has
incurred expenses which the Applicant considers unreasonable,
the Applicant may show that the Respondent could reasonably have
avoided the loss at a lesser expense, in which case only the smaller
amount would be recoverable.
[7]
That the Applicant can only do if he is allowed to oppose or
defend the Respondent’s quantification of the damages,
which he
is entitled to do.
[25]
It was submitted on behalf of the Respondent that leave to appeal
would merely result in a rehash of the same arguments that
have
already served before the court. The Applicant has, in my view,
however, raised a number of valid issues pertaining
to the
quantification of the damages regarding which another court may reach
a different conclusion. It is evident from the
case law, for
instance, that the last word about the applicability of Subsections
127(2) – (5) of the National Credit Act,
Act 34 of 2005, has
not been spoken yet. The Court
a
quo
relied
on one decision
[8]
to claim that
it was not applicable because the agreement had already been
cancelled. Another court may reach a different
conclusion.
[26]
In
MEC
for Health, Eastern Cape v Mkhitha and Another
[9]
the
Supreme Court of Appeal held as follows:
“
[16]
Once again it is necessary to say that leave to appeal, especially to
this court, must not be granted unless there truly is
a reasonable
prospect of success. Section 17(1)(a) of the Superior Court Act
10 of 2013 makes it clear that leave to appeal
may only be given
where the judge concerned is of the opinion that the appeal would
have a reasonable prospect of success or there
is some other
compelling reason why it should be heard
[17]
An applicant for leave to appeal must convince the court on proper
grounds that there is a reasonable prospect or realistic
chance of
success on appeal. A mere possibility of success, an arguable
case or one that is not hopeless, is not enough.
There must be
a sound, rational basis to conclude that there is a reasonable
prospect of success on appeal.”
[27] It is my considered
opinion that the Applicant would have reasonable prospects of success
on appeal.
WHEREFORE
I make the following order
1.
The Applicant is granted leave to appeal to
the Full Bench of this Court against the whole of the judgment and
order granted on
19 September 2019.
2.
Costs are to be costs in the appeal.
________________
MURRAY AJ
For the
Plaintiff:
Adv P J Heymans
Instructed by
Mr A J Barnard
Attorney for the
Plaintiff
EG Cooper Majiedt Inc
77 Kellner Street
Westdene
BLOEMFONTEIN
For the
Defendant:
Adv C D Pienaar
Instructed by
Mr I van Rooyen
Attorney for the
Defendant
Grimbeek, Van Rooyen &
Partners Inc
c/o Du Plooy Attorneys
49 Parfitt Avenue
BLOEMFONTEIN
[1]
Act
34 of 2005
[2]
Claim
3
in
ABSA’s Particulars of Claim.
[3]
Claim
3 in the Main Action.
[4]
Erasmus:
Superior Court Practice Vol 2, [Original Service, 2015] at D1-248
[5]
Constitutional
Court case CCT 150/15;
[2016] ZACC 23
at par
[12]
[6]
3
rd
Ed, at 295 - 297 at par 11.3.1
[7]
Everett v Marina Heights (Pty) Ltd
1970 (1) SA 198
(C), at 201;
Shrog v Valentine
1940 (3) SA 1228
(T) at 1237.
[8]
Edwards
v First Rand Bank Ltd t/a Wesbank 2017 (1) SA 316
[9]
91221/2015) [2
016] ZASCA 176
(25 November 2016) at paras [16] and
[17]