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[2019] ZAECMHC 51
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Baypoint Securitisation RF Ltd v Mtseli (CA13/16) [2019] ZAECMHC 51 (13 September 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
[EASTERN
CAPE LOCAL DIVISION, MTHATHA]
CASE
NO: CA13/16
Heard
on: 30/08/19
Delivered
on: 13/09/19
In
the matter between:
BAYPOINT
SECURITISATION RF LTD Appellant
and
FUNDISWA
MTSELI
Respondent
Coram: Nhlangulela DJP
et Jaji J
APPEAL JUDGMENT
NHLANGULELA
DJP
[1]
This matter concerns an appeal against judgment of the magistrate of
Mdantsane which
was made in the following terms:
1.
The judgment granted by the Clerk of the Court on the 18
th
July 2013 is
null
and
void.
2.
It is ordered that the status
a quo
ante
the judgment
be and is hereby set aside.
3.
Respondent is ordered to pay costs of this application on the scale
between Attorney
and Client Scale.
[2]
In the magistrates’ court the appellant was cited as the
respondent; and the
respondent was the applicant respectively.
[3]
The judgment of the magistrate arose out of an application for
rescission that had
been brought by the respondent against a judgment
by consent granted by the Clerk of the Court in terms of s 58 of the
Magistrates’
Court Act 32 of 1944 (the MCA). The
respondent was the beneficiary of that judgment.
[4]
Two issues fall to be decided in this appeal matter. The first
is whether the
judgment granted by the Clerk of the Court in terms of
s 58 of the MCA on a debt governed by the National Credit Act 34 of
2005
(the NCA) was
null
and
void
ab origine
.
The second issue is whether paragraphs 2 and 3 of the order granted
by the magistrate were competent.
[5]
The background facts are the following: On 29 May 2012 a credit
agreement sanctioned
in terms of the provisions of the NCA was
concluded by the parties. A loan debt due by the respondent to
the appellant was
calculated at R25 000,00, and to be liquidated
in instalments until the whole debt was extinguished. It was
agreed that
upon the respondent failing to pay instalments at the
times as agreed the appellant would be entitled to sue on the
outstanding
balance, obtain a judgment and execute it as a way of
recovering the debt. When the respondent defaulted in making
payments
as agreed the appellant issued notices in terms of sections
129 (1) and 130 (1) of the NCA, and upon non-compliance therewith
approached
the respondent at her place of employment on 20 September
2013 to consent to judgment in terms of s 58 of the NCA read with the
provisions of rule 12 of the Magistrates’ Court Rules (the
MCR). On 27 November 2013 the appellant approached the Clerk
of
the Court, applied for judgment by consent whereafter it was granted
the judgment. Further, on 10 February 2014 the appellant
applied for and obtained an emolument attachment order that landed it
into the salary account of the respondent. As a result
payments
towards settlement of the loan were resumed. Feeling the pinch
of deductions against the salary, on 05 August 2014
the respondent
applied for and obtained an order in the magistrates’ court
interdicting the appellant from collecting the
instalments pending
the bringing of the application for rescission of the consent
judgment. The respondent duly brought the application
for rescission
on 22 September 2014.
[6]
In the affidavit that the respondent filed in support of the
application for rescission
of the consent judgment she relied on
various provisions of the NCA, the MCA and MCR, contending that the
violation thereof by
the appellant rendered the consent judgment to
be
null
and
void.
She asserted that the signing
of the document consenting to judgment at her place of employment
rather than at the office of the
appellant was a conduct that is
prohibited by s 75 of the NCA; the failure of the appellant to give
her a pre-contract information
and a quotation of the debt before the
signing of the credit agreement was not a compliance in terms of s 92
of the NCA; the failure
by the appellant to file the NCA agreement
contravened MCR 12 (6); and that the failure on the part of the
appellant to file in
court the letters of demand issued in terms of s
129 and 130 of the NCA read with s 58 of the MCA and MCR 4 (4)
vitiated the consent
judgment. Finally, the respondent
alleged that the consent judgment cannot stand because in terms of
MCR 12 (5) the
magistrates’ court, not the Clerk of the Court,
did not grant the judgment.
[7]
The respondent went on to conclude that the irregularities raised in
the founding
affidavit constituted “a good cause” and a
“
bona fide
defence” as is envisaged in MCR 49
(1). The provisions of rule 49 (1) read as follows:
“
A party to
proceedings in which a default judgment has been given, or any person
affected by such judgment, may within 20 days after
obtaining
knowledge of the judgment serve and file an application to court, on
notice to all parties to the proceedings, for a
rescission or
variation of the judgment and the court may, upon good cause shown,
or if is it satisfied that there is good reason
to do so, rescind or
vary the default judgment on such terms as it deems fit: Provided
that the 20 days’ period shall
not be applicable to a request
for rescission or variation of judgment brought in terms of subrule
(5).”
[8]
The affidavit filed on behalf of the appellant in opposition to the
application for
rescission of default judgment sets out the
historical background that I have already summarised hereinabove, and
disputes the
correctness of the conclusion of law made by the
respondent. It also alerted the magistrate that the alleged
issues of non-compliance
with the provisions of NCA, the MCA and MCR
(which were denied by the appellant) were matters of law to be
disposed of in argument.
[9]
It is common cause that the bases of the magistrate’s judgment
are anchored
in the findings he made, namely:
“
1. It
is the Applicant’s prerogative to choose which sub-rule he
wants to rely on in Rule 49 of the Magistrates’
Court Rules;
2.
The Applicant has made a
prima facie
case for the relief
claimed;
3.
The Respondent has failed to deal with the allegations made by the
Applicant.
4.
The Respondent has failed to place evidence before this Court that he
has complied with the peremptory
provisions in Rule 12 (5) of the
Magistrates’ Court Rules;
4.
Had there been compliance by the Respondent with Rule 12 (5), the
Court would not have granted the Section
58 judgment without being
satisfied that all the prescribed legal requirements have been
complied with by the Respondent”.
[10]
The grounds upon which the appeal was noted are premised the findings
of the magistrate as aforementioned,
which this Court is called upon
to regard as erroneous.
[11]
It bears mentioning at this early stage that the appeal is not
opposed and, as it was expected,
neither the respondent nor her legal
representative appeared in court during the hearing of the appeal.
[12]
I am in agreement with
Ms Sephton
,
counsel who appeared for the appellant, that the provisions of the
amended Rule 12 (5) of the MCR do not find application in the
present
matter. In this regard she submitted that prior to 28 July
2014
MCR 4
(4) made MCR 12 (6), (6A) and (7) applicable to a request for
judgment in terms of s 58 of the MCR. By interpretation, on
the
application of the
maxim: inclusion unius est
exclusion alterius
the specific reference in
MCR 4 (4) to MCRs 12 (6), (6A) and (7) must be taken to have
expressly been intended by the Legislature
to exclude from MCR (4)
any reference to MCR 12 (5). In the result, as at 27 November
2013 only those portions of MCR 12
specifically incorporated into MCR
4 (4) applied to a request for judgment in terms of sections 57 and
58.
[13]
On 28 July
2014 MCR 4
(4) was amended to read as follows:
“
Rules
12(5), (6), (6A) and (7) apply to a request for judgment in terms of
sections 57 and 58 of the Act”.
[14]
When MCR 4 (4) was amended on 28 July 2014 the provisions of MCR 12
(5), having been amended
several times up to 23 August 2010, read as
follows:
“
The
registrar or the clerk of the court shall refer to the court any
request for judgment on a claim founded on any cause of actin
arising
out of or based on an agreement governed by the
National Credit Act,
or
Credit Agreement Act, 1980 (Act No 75 of 1980), and the court
shall thereupon make such order or give such judgment as it may deem
fit”.
[15]
The exposition of the law regarding the history of the legislative
amendments to MCR 4 (4) and
MCR 12 (5) that brought about the change
in the manner in which a consent judgment in terms of MCA 58 may be
obtained was discussed
by the appeal court in the case of
MBD
Securitisation (Pty) Ltd v Booi
2015 (5) SA 450
(0) at 456-461.
This case is the foundation on which the interface between MCA 58 (1)
and MCR 12 (5) is discussed in the
present matter.
[16]
Therefor the magistrate
erred
in finding that the appellant did not comply with MCR 12 (5) because
the judgment by consent was obtained on 27 November 2013,
before the
amendment of the sub-rule on 4 (4) on 28 July 2014. Before 28
July 2014 there was not a legal prescription in
place that an
applicant for consent judgment in terms of s 58, and based on an
agreement under NCA, must approach the magistrate.
An applicant
for a consent judgment could only approach the Clerk of the Court.
It was also not imperative for such an applicant
to comply with the
procedural matters as alluded to by the respondent before the clerk
can grant judgment by consent. Consequently,
the magistrate
erred
in holding that
the appellant contravened any of the procedural irregularities that
were raised by the respondent. By parity
of reasoning, the
judgment granted by the clerk of the court was not
null
and
void ab origine.
[17]
Ineluctably, there is merit in the ground of appeal that the
magistrate
erred
in
finding that the respondent’s reliance on MCR 49 (8) was a
sufficient ground to rescind the consent judgment, and without
a need
to show “good cause” or “good reason” as
provided in MCR 49 (1).
[18]
The approach adopted by the magistrate that the applicant for
rescission who seeks to set aside
a judgment on the basis that it is
null
and
void
ab origine
may be exonerated from
complying fully with the provisions of Rule 49 (1), (2), (3) and (4)
is erroneous. Such an approach
was corrected in the case of
Leo
Manufacturing CC v Robor Industrial (Pty) Ltd t/a Robor Stewarts and
Lloyds
2007 (2) SA 1
(SCA) in the statements made therein, which
read as follows:
“
[6]
Put differently, the provisions of rule 49 (3) are peremptory when a
court considers an
application to rescind a default judgment.
More particularly the wording of the sub-rule makes it clear that the
grounds
of the defendant’s defence to the claim must be set
out. Where the objection is that the judgment was
void
ab origine,
compliance with rule 49 (3)
nevertheless involves further proof of the existence of a valid and
bona fide defence to the claim.
[7]
Insofar as sub-rule 49 (8) may be relevant to the matter, in that it
specifically
refers to the rescission or variation of a judgment
which is sought,
inter alia
,
on the ground that it is
void ab origine
and requires the application to be served and filed within one year
after the applicant first have knowledge of such voidness,
this, in
no way, overrides the provisions of rule 49 (3). Rule 49 (8)
simply provides a different time period for the filing
and service of
an application for rescission of a judgment (not only a default
judgment) on a certain specified grounds.
In their comment upon
rule 49 (8), the learned authors Erasmus and Van Loggerenberg make
the point that an applicant seeking rescission
of a default judgment
on the grounds that the judgment in question in
void
ab origine
must in terms of rule 49 (3)) set
out a defence “with sufficient particularly” so as to
enable the court to decide
whether or not there is a valid and
bona
fide
defence.”
[19]
In terms of MCR 49 (2) the respondent was presumed to have had
knowledge of the default judgment
10 days after 27 November 2013. The
respondent did not rebut that presumption. She merely set out
on affidavit conclusions
of law which were not supported by facts.
Further, in terms of MCR 49 (8) she was supposed to serve and
file an application
for rescission within one year after obtaining
knowledge that the judgment was vitiated by voidness, fraud or
mistake. In
terms of MCR 49 (1) she was supposed to show good
cause or good reason why the default judgment was succeptible to
being rescinded.
And in terms of MCR 49 (3) she was enjoined to
file an affidavit setting out the reasons for her absence or default
and the grounds
of her defence to the appellant’s claim.
However, the respondent merely alleged that the consent judgment was
void
ab
origine
by reason of non-compliance with the
provisions of the NCA. She failed to tell when exactly she
gained knowledge that the
consent judgment was granted in favour of
the appellant; she did not show good cause or give a reason(s) why
the consent judgment
should be rescinded, as well as to deal with the
matters that are listed in MCR 49 (3). The allegation that the
appellant
had not complied with the provisions of the NCA were not
sufficient and an omission of that step alone ought not to have
entitled
the respondent to rescission of the consent judgment.
[20]
In the light of the fact that the magistrate did not declare that the
emolument attachment order
was unlawful the order in paragraph 2 of
the judgment of the magistrate that the appellant must, in essence,
refund the emoluments
already drawn from the salary account of the
respondent towards settlement of the loan debt would never be
enforceable in law.
For that reason the magistrate committed an
error in making an order that was legally unenforceable.
[21]
The magistrate did not give reasons for an order that the appellant
should pay costs on attorney
and client scale. The only
inference capable to be drawn from the proceedings before the
magistrate can be none other than
that the cost order was made
following upon the order rescinding the default judgment.
However, it was not competent of the
magistrate to grant a punitive
costs order in the absence of substantive reasons for it.
In the circumstances, the
punitive cost order cannot stand.
[22]
On the consideration of all the grounds of this appeal the following
order shall issue:
1.The appeal is upheld
with costs.
2.The order granted by
the magistrate on 26 October 2015 be and is hereby set aside, and is
replaced with the following:
“
The application
be and is hereby dismissed with costs.”
______________________
________________________
Z.
M. NHLANGULELA
DEPUTY
JUDGE PRESIDENT OF THE HIGH COURT
MTHATHA
I
agree:
__________________________
N.
P. JAJI
JUDGE
OF THE HIGH COURT
Counsel
for the appellant
: Adv.
S.A. Septhon
Instructed
by
: Neville
Borman
& Botha
GRAHAMSTOWN.
For
the Defendant
: No appearance
c/o Huxtable Attorneys
GRAHAMSTOWN.