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[2018] ZAGPPHC 22
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Lansberg and Another v Absa Bank Limited and Another (24146/2016) [2018] ZAGPPHC 22 (16 February 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 24146/2016
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
ISGAK
LANSERG
AALIYAH LANSBERG
FIRST APPLICANT
AALIYAH
LANSBERG
SECOND APPLICANT
and
ABSA
BANK LIMITED
FIRST RESPONDENT
SHERIFF
WONDERBOGM
SECOND RESPONDENT
JUDGMENT
THOBANE
AJ,
Introduction
[1]
In this application the applicant seeks to have rescinded a judgment
obtained by default on 26 May 2016. The application, which
is
opposed, was launched against the backdrop which is set out below.
[2]
The applicant initially launched an urgent application comprising two
parts.
The relief set out in Part A in summary form was to the effect
that the respondents be interdicted from selling and/or executing
immovable property as well as an order for costs. Part 8 comprised a
relief in terms of which it was sought that default judgment
be
rescinded as well as an award of costs.
[3]
It would seem urgency was dealt with by the parties and is therefore
no longer
part of this application . This application therefore is
solely about rescission of the default judgment.
Background
[4]
It must be mentioned from the onset that this application was set
down by the
first respondent. Following the arrangements made with
regards to the urgent part of the application, the applicant was
content
to sit back and not set down the application an approach
which the first respondent did not share, hence the set down.
[5]
It is common cause that the applicants in July of 2006 entered
concluded a mortgage
bond with the first respondent. The terms of the
mortgage bond are not in dispute. It is also not in dispute that the
applicants
fell into arrears with their monthly payments. The
applicants state that the cause of their failure to keep to the terms
of the
credit agreement were loss of employment. I pause to state
that the application by the applicants has not been elegantly put
together.
For example in paragraph 10 of the founding affidavit , the
applicants state that . the immovable property was bought in 2012. In
paragraph 12 thereof it is stated that the bond was being serviced
from 2006 until 2015.
[6]
The failure to service the bond being common cause, the applicants
state in
addition, that on or about November 2015 they resorted to
debt review. It is the applicants ' version that they were assured by
the debt counselor that everything was under control. By this I must
assume is meant that the monthly deductions and payments were
proceeding as arranged.
[7]
In March 2016 the applicants received a section 86(10) Notice in
terms of which
debt review was terminated. Contact was made with the
debt counselor and they were assured , once again, that the court was
seized
with the matter. It is not immediately clear what is meant by
the statement. In addition so the applicants contend , contact was
made with the bank to make payment arrangements.
[8]
On 15 June 2016 the sheriff delivered a warrant of execution against
property. It
is after receipt of same that applicants made contact
with their attorneys to enquire about the meaning of the documents
received.
Five days later, on 20 June 2016, applicants ' attorneys
set out on an investigation of the court file. It is not explained
why
the investigation was not launched immediately. They became aware
on that date that summons had purportedly been served by way of
affixing to the principal door. The applicants dispute service on the
basis that the second applicant is unemployed and would have
been at
all times at the parties' immovable property. The applicants
challenge the return of service which is to the effect that
the
summons were not served on either the first or the second applicant
in person. The applicants state that they became aware
of judgment on
15 June 2016 when the sheriff served the warrant of execution on
them. The applicants emphasize that they paid the
debt counselor
promptly and in their view they were paying as arranged with him. The
payment, on applicants' version, was done
for only three months.
Issue
[9] The
applicants attack the default judgment on numerous grounds;
9.1.
That there was no service on them of the section 129 notice,
mandatory in terms of the
National Credit Act 34 of 2005
, before
issuing summons ;
9.2.
That summons were served by way of affixing to the principal door,
thus service of summons is
disputed;
9.3.
That the order of executability of the immovable property was granted
without consideration of
all requisite factors including the personal
circumstances of the applicants as well as case law.
Some
legal principles
[10]
It is trite that a default judgment may be set aside either under the
provisions of the common law or
Rule 42.
In addition, Rule 31(2)(b)
of the Uniform Rules provides a third mechanism for setting aside a
judgment where it was granted by
default by a court.
[11]
The applicants have not in the founding affidavit set out in terms
which of the three mechanisms
they seek to have the default judgment
rescinded. It was significant that the applicants state the approach
so as to enable the
court to evaluate if the requirements in each
instance have been met.
[12]
In brief, the requirements for bringing the application under common
law are clearly set out
in
Promedia Drukkers
&
Uitgewers (Edms) Bpk v Kaimowitz and Others
1996 (4) SA 411
(CPD)
at page 417 where Van Reenen J states:
'In
terms of common law, a court has discretion to grant rescission of
judgment where sufficient or good cause has been shown. But
it is
clear that in principle and in the long standing practice of our
Courts, two essential elements of 'sufficient cause'
for rescission
of a judgment by default are
10.1.
that the party seeking relief must present a reasonable and
acceptable explanation for his/her default,
10.2
that on the merits such party has a bona fide defence , which prima
facie, carries some prospect of success (See
Chetly v Law
Society of Transvaal
1985 (2) SA 756
(A) at 765 B
•
C,
Athmaram v Singh
1989 (3) SA 953(D)
at 954
E-F)."
[13]
Therefore a judgment obtained by default under common law can be
rescinded by court
if the applicant has shown , sufficient cause.
Where a judgment is to be set aside on the basis of
Justus error
under comrnon law, it was held that the discretion of the courts
in setting aside a default judgment under common law extends beyond,
and is not limited to, the grounds provided for in rules 31 and 42(1)
of the Rules .
(De Wet v Western Bank Ltd
1979 (2) SA 1031(A)
.
)
[14]
Rule 31 (2)(b) provides;
"a
defendant may within twenty days after she has knowledge of such
judgment apply to court upon notice to the plaintiff to set aside
such judgment and the court may, upon good cause shown, set aside
such judgment and the court may, upon good cause shown, set aside
the
default judgment on such terms
as
to it seems meet.".
[15]
Rule 42(1) (a) of the rules provides;
"the
court may, in addition to any other powers it may have, mero motu or
upon the application of any party affected, rescind
or vary,
(a)
An order or judgment erroneously sought or erroneously granted
in the absence of any party affected thereby."
[16]
The applicants must show that they have a
bona fide
defence to
the claim which
prima facie
carries with it some prospect of
success. (See
De Wet and Others v Western Bank Ltd
1979 (2) SA 1031
AD
at 1042 H). In
Grant v Plumbers
(Pty) Ltd
1949 (2) SA 470
(OJ
Brink J at 476 - 477 stated
that:
·
'(a) He must give a reasonable explanation of his default. It if
appears that his default was wilful or that it was due to gross
negligence, the Court should not come to his defence,
(b)
His application must be bona fide and not made with the
intention of merely delaying Plaintiff's claim.
(c)
He must show that he has a bona fide defence to the
Plaintiff's
claim. It is sufficient if he makes out a prima facie defence in the
sense of setting out averments which, if established
at the trial,
would entitle him to the relief asked for. He need not deal fully
with the merits of the case and produce evidence
that the
probabilities are actually in his favour"
Application
of principles
[17]
It must be mentioned as an observation the court makes, that the
applicants have not pointed to any
error in the granting of the
judgment. The applicability of rule 42(1)(a) can therefore be
discounted.
[18]
The applicants have also made no attempt to state if the application
is brought within 20 days of the
knowledge of judgment as required by
rule 31 (2)(b). The following timelines can be made out from the
papers, the section 129 notice
was dispatched on 29 February 2016 to
the applicants and was collected from the post office by the second
applicant
on 9 March 2016. On 16 March 2016 the
applicants were served with section 86(10) notice. The summons were
issued on 4 April 2016
and served on 13 April 2016 by affixing to the
principal door. On 14 April 2016, a day after service of the summons,
the applicants
in writing were
inter alia
made aware of legal
action against them. The document which the applicant signed went
further to state that legal action would not
be stopped and that the
applicants' immovable property would be attached. Soon thereafter on
26 May 2016 , in open court, default
judgment was obtained. The order
provided for a monetary judgment, interest, executability of the
immovable property as well as
authorization to issue a warrant of
execution against the immovable property. On 15 June 2016 the warrant
of
execution was served personally on the first applicant. On
12 July 2016 the application for rescission of judgment was served on
the respondent.
[19]
On the aforementioned timelines, I accept that the application was
launched within the requisite
20 days of knowledge of judgment, on
the assumption that the applicants became aware of judgment when the
warrant of execution
was served on them. The applicant must show that
there was no willful default. The summons were served on 13 April
2016 and on
14 April they were informed that legal action was pending
and that execution would not be stopped. The applicants lack candor
and
are very economical with information that must assist the court
in making a determination about willful default. What is clear
however is that on 14 April 2016 the applicants willingly signed a
document in which is spelled out that they would not be contesting
pending litigation. With these facts, I am unable to find that the
applicants were not in willful default. The attempt to argue
that
summons were not served personally on the applicants is paled by the
fact that the applicants were made aware about pending
litigation and
if there was a willfulness to defend the action they would obviously
have done so.
[20]
The applicants are required to show that there is a bona fide defence
to the action and that
the defence carries some prospects of success
. In this regard the applicants have made no attempt whatsoever to
state what their
defense, if any, is. Instead they admit that they
fell into arrears with their payment and that they had to resort to
debt counseling.
In addition they approached the first respondent and
made an undertaking to pay off the arrears in monthly installments.
In such
circumstances it becomes relevant to ask why would the
applicants seek rescission. The
bona tides
of the applicants
are seriously placed in doubt.
[21]
The
bona tides
are again called into question when the
applicants contend that they never received the section 129 notice in
circumstances where
it has been shoyvn, through the track and trace
report that the section 129 letter was collected by the second
applicant in person
on 9 March 2016 at Pretoria North. The attempt
therefore to seek to challenge the proceedings on the basis that
legal action was
not preceded by the section 129 notice or any other
must fail. There is another reason why such an attempt must fail. It
relates
to the section 86 (10) notice. It was submitted on behalf of
the respondents that the applicants are misplaced in contending that
a section 129 letter ought to have been sent to them. Their
submission, with which I agree, reflects the correct legal position.
[22]
In
Firstrand Bank Ltd tla Honda Finance v Owens
2013 (2) SA 325
(SCA),
the Supreme Court of Appeal had occasion to say the
following;
"[10J
A reading of subsections (1) of each of s 129 and s 130 shows that
where it is the credit provider that wishes to enforce
the debt, a
notice must6 be given by it to the consumer in terms of s 129(1)(a).
That subsection also makes it clear that the credit
provider must
draw to the consumer's attention the possible methods of resolving
the debt default. Section 86(10), on the other
hand, assumes
knowledge on the part of the consumer of these methods: it applies
only where the consumer has already applied for
debt review. A notice
under s 129(1 )(a) is thus redundant where the consumer has already
taken steps to rearrange her debts. That
is why s 129(1)(b)(i) states
that in order to commence legal proceedings, a credit provider must
give notice either under s 129(1)(a)
ors 86(10). The former applies
where there has been no debt review. The latter applies where there
has been. The requirement of
two notices to the consumer where these
are meant to serve different purposes , and in different contexts, is
absurd.
[11]
I accordingly agree with the decision of Murphy J in
Changing
Tides
that
a notice in terms of s 129(1 )(a) is
not required where a notice under s 86(10) has been given. (My
emphasis). I also agree that
the reference in s 130(1)(a) to a notice
under s 86(9) must be a reference to s 86(10).8 It is an obvious
error. Section 86(9)
does not deal with notices at all. Ands
130(1)(a) must be read withs 129(1)(b)(i), which refers to s 86(10):
they both refer to
the requisite notice to be given to the consumer."
[23]
The contention therefore is not meritorious. For this additional
reason also the contention that
a section 129 notice ought to have
been dispatched to the applicants, must fail.
[24]
The applicants state that the writ of execution was obtained without
judicial oversight. The
applicants however do not advance any
specific reason why such a contention is made. What the applicants do
is to make general
statements such as,
"the writ interferes
unjustifiably with my family and
l's
existing
access
to
adequate housing', 'it further violates my right to dignity and right
against unlawful deprivation of property under section
25(1) of the
Constitution',
and
'the amount that
is
in arrears is
not justifiable to execute my home and it can be paid without
execution'.
What is apparent from the papers is that the
application was made in open court before Barn AJ.
[25]
None of the parties specifically brought it to the court's attention
, however , perusal of the
application placed before Barn AJ,
particularly the affidavit in support of default judgment tells a
story that need not be left
undeconstructed . The affidavit in
support of default judgment is a short one and can be reproduced
herein. It states as follows;
"
1.
1.1.
I am an adult male employed by ABSA BANK LIMITED
as
Assistant Vice President of the Home Loan Recoveries (Secured
Collections): Ground Floor, 9 Lothbury Street, Auckland,
Johannesburg.
1.2.
I am duly authorized to depose to this affidavit on behalf of
the Plaintiff.
1.3.
The content of this affidavit falls, unless the contrary is
specifically stated or appears from the context, within my personal
knowledge and are both true and correct.
1.4.
Legal submissions contained herein are made on advice received
from my legal representatives, which advice I accept.
2.
I
have read the Plaintiff's summons and confirm that the contents
thereof are true and correct."
[26]
It must be state9 that it is permissible for the applicant in an
application for default
judgment to set out the factors on which
reliance is placed in the particulars of claim, as appears to have
been the case
in
casu. In such circumstances, the applicant
must depose an affidavit confirming the contents of the summons. The
other option is
to set out separately in an affidavit all relevant
factors relied upon. (See
Firstrand Bank Ltd v Folscher
Folscher
&
another and similar matters
2011 (4) SA
314
(GNP) ).
[27]
Section 46 of the Uniform Rules of Court provides as follows;
"(1)
(a) No writ of execution against the immovable property of any
judgment debtor shall issue until
–
(i)
a return shall have been
made of any process which may have been issued
against
the movable property of the judgment debtor from which it appears
that the said person
has
not sufficient movable property to
satisfy the writ; or
(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 an
abuse. Expressed simply, the function of the court is to safeguard
against abuse of the execution process. It is with the
consideration
of this context and purpose that a determination is made whether or
not to declare a person's home executable."
[29]
In light of the authorities listed above and having considered what
was placed before Barn AJ·, I am satisfied that
judicial
oversight was indeed exercised and that judgment was properly
granted.
[30]
I therefore make the following order;
1.
The application is dismissed with costs on attorney and client
scale.
SA
THOBANE
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA