About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2017
>>
[2017] ZAGPPHC 54
|
|
Makgato and Another v Absa Bank Limited and Others (47219/2007) [2017] ZAGPPHC 54 (21 February 2017)
REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
DATE:
21/2/2017
CASE
NO:
47219/2007
Reportable:
No
Of
interest to other judges: No
Revised.
MOTHABELA
KGOLO EPHRAIM
MAKGATO
1
st
Applicant
THIZWILONDI
SHARON MAKGATO
and
ABSA
BANK
LIMITED
1
st
Respondent
SHAMMY
LUVENGO
2
nd
Respondent
THE
REGISTRAR OF
DEEDS
3
rd
Respondent
JUDGMENT
AC
BASSON, J
[1]
The
applicants in the rescission application are Mr and Mrs Makgato
(married in community of property). They are referred to as
“the
applicants” or as “Mr or Mrs Makgatho” where
applicable. The first respondent is ABSA Bank (“ABSA”)
and the second respondent is Mr Luvengo. (“Luvengo”). The
third respondent is the Registrar of Deeds.
[2]
The
following applications are before the court:
(i)
The
applicants’ Rule 6(15) application. This application is to
strike out the entire paragraph [13] of Luvengo’s answering
affidavit in the interlocutory condonation application. This
application is no longer before court
(ii)
The
applicants’ condonation application. The rescission application
has been postponed on a previous occasion to allow the
applicants to
bring a condonation application to explain the delay in bringing the
rescission application. This application only
deals with an
application for condonation for the period 17 February 2015 (which is
the date upon which the applicants allege they
became aware of the
default judgment) and 7 April 2015 (which is the date on which the
rescission application was launched). This
application is opposed by
Luvengo. His opposing affidavit was filed 1½ days late. I will
refer to his application for condonation
for the late filing of his
opposing affidavit in the next paragraph. ABSA did not oppose the
grating of condonation for this period
but persisted with its
argument that the appellants knew long before 17 February 2015 of the
existence of the default judgment
and that the application for
rescission is in fact approximately six years late. I will refer to
ABSA’s submissions in more
detail herein below where I deal
with the facts pertaining to the rescission application. Suffice to
point out that the only condonation
application in respect of the
rescission application before this court is the condonation
application for the period 17 February
2015 up until 6 April 2015.
(iii)
I have
already referred to Luvengo’s condonation application for the
late filing of his answering affidavit in the interlocutory
condonation application. The affidavit was filed one and a half day
late. Despite the fact that the delay in the delivery of Luvengo’s
answering affidavit was not significant and the fact that no real
prejudice is alleged by the applicants, the attorneys acting
on
behalf of the applicants have nonetheless insisted that Luvengo must
bring a substantive condonation application for the late
filing of
his answering affidavit in the interlocutory condonation application.
The court was, however, informed at the commencement
of the
proceedings that this application is no longer before court.
(iv)
The
applicants’ rescission application.
[3]
It is not
clear from the founding affidavit on what basis the rescission
application is brought. From the latest set of heads of
argument
filed on behalf of the applicants, the applicants now seem to premise
the rescission application firstly on the ground
that the judgment
falls to be rescinded in terms of Rule 42(1)(a) in that ABSA’s
summons was expiable and in the alternative,
(secondly) that the
judgment falls to be rescinded on the basis that ABSA’s claim
was settled prior to the execution of the
judgment, alternatively
that ABSA had abandoned and/or elected not to proceed with the
default judgment. The factual basis upon
which the applicants now
seem to seek an order to rescind the default judgment is not set out
in the founding affidavit.
Applicants’
application for condonation for the late filing of their rescission
application
[4]
The
applicants provide an explanation for their failure to launch the
rescission application for the period between 17 February
2015 (the
date on which Mr Makgato became aware of the sale in execution) and 7
April 2015 (which is the date on which the applicants’
application for rescission was launched). The applicants’
application for condonation for this specific period is not opposed
by ABSA.
[5]
I have
considered the application for condonation and I am satisfied that
the applicants have adequately explained the delay for
the period 17
February to 7 April 2015.
[6]
Whether or
not this is the only period for which condonation ought to have been
applied for will be considered herein below.
Main
application
[7]
There are
two immovable properties relevant to this application. Both
properties are owned by the applicants. The facts in respect
of the
two immovable properties are to some extent intertwined. Both
properties are bonded with ABSA.
(i)
The first
is portion 498 (a portion of portion 338) of the farm Doringkloof no
391. This property is the subject matter of case
number 47219/07 (the
present application). This property is also known as Erf 4[...],
Cornwall Hill Estate (hereinafter referred
to as “the
Doornkloof property”). The applicants bought the property
during 2003 and entered into a mortgage loan agreement
with ABSA. An
initial amount of R 1 300 000.00 was advanced to the
applicants in respect of this property and later an
additional amount
of R 260 000.00 was advanced in respect of costs and further
expenses. The Doornkloof property is an underdeveloped
plot and is
the second property and therefore not the applicants’ place of
residence.
(i)
The second
is Erf 1[...], Irene Extension 44 which is the subject matter of case
number 4812/07 (hereinafter referred to as the
“Irene
property”). The Irene property is the applicants’ place
of residence.
[8]
It is
common cause that the applicants defaulted with payment of the
required monthly instalments payable in terms of the mortgage
loan
agreement. Mr Makgato contended that the late payments were caused
because he works on a contract basis and clients often
pay him late.
ABSA submitted that these facts cannot detract from the fact of
default on the part of the applicants.
[9]
Default
judgment was taken against both properties. This application for
rescission only deals with the rescission of the Doornkloof
property
and not with the Irene property.
[10]
On 18
October 2007 ABSA issued and served Simple Summons against the
applicants in respect of the Doornkloof property at their
domicilium
citandi et executandi
after the applicants defaulted with payment of instalments on the
said property. The summons was served at the property by placing
the
summons under a rock. The Doornkloof property was declared
specifically executable in terms of a court order dated 24 January
2008 for a sum of R884 599.44 with further interest and costs. A
writ of attachment was issued and the mortgaged property
was attached
during February 2008. The auction was arranged for 7 May 2008.
[11]
On 20
November 2007 – a few days after the summons was served - a
note was made on ABSA’s computer system indicating
that Mr
Makgato contacted ABSA with an undertaking to make payment of the
arrears. In this regard it was submitted on behalf of
ABSA that on
the probabilities it must be accepted that the applicants no later
than 20 November 2007, were fully aware of the
summons issued and
served.
[12]
A few days
before the action was to be held Mr Makgato proposed to ABSA in a
letter dated 3 April 2008 to pay the outstanding amount
in four
payments: R 50 000.00 on 10 April 2008; R 30 000.00
on 21 April 2008; R 50 000.00 on 12 May 2008 and
R 25 000.00
on 23 May 2008. This proposal was made in an e-mail to ABSA
dated 3 April 2008. Mr Makgato specifically
requested ABSA to stop
the sale and “rescind the judgment”. At the time of
the outstanding arrears on instalments
amounted to R125 986.11.
R 80 000.00 was paid by 7 May 2008 and the auction arranged for
7 May 2008 was cancelled. Unfortunately
the applicants did not make
any further payments as per their undertaking in the email. On 6
August 2008 the arrears on the account
amounted to R79 064.50.
[13]
ABSA is
adamant that they at no stage waived their rights which they had
obtained in terms of the judgment. ABSA further submitted
that
at no stage did the applicants launch a rescission application.
[14]
A further
sale in execution was arranged for 6 August 2008 but the applicants,
following the same strategy, made a payment on 31
July 2008 in the
amount of R 79 000.00. The sale in execution arranged for 6
August 2007 was also cancelled.
[15]
The
applicants again fell in arrears and a further sale in execution was
arranged for 16 January 2013. On 8 January 2013 the arrear
amount was
paid and the auction sale was again cancelled.
[16]
According
to ABSA this strategy to make a payment shortly before an execution
sale was to take place was persisted in respect of
both the
Doornkloof and the Irene property.
[17]
In respect
of the Doornkloof property the applicants again failed to keep up the
instalments relating to the property and by 17
December 2014 they
were in arrears in an amount of R 57 105.53. ABSA again
instructed their attorneys to arrange for a sale
in execution. The
sale in execution was arranged for 11 February 2015. Because the
applicants have not, as in the past, paid the
arrear amount owing,
the sale of execution proceeded and the property was sold to Luvengo.
[18]
According
to ABSA the applicants made further payments on their mortgage
account after the sale in execution and attempted to persuade
ABSA to
cancel the sale in execution.
[19]
According
to ABSA the applicants must at least have been fully aware of the
judgment (at best) as far back as in April 2008 but
have done nothing
until now to rescind the judgment.
[20]
I have
already referred to the fact that Mr Makgato alleged that he only
learned about the sale in execution during or about February
2015
whilst being busy with litigation against Luvengo regarding the sale
agreement of the property. The litigation was conducted
under case
number 81772/2014. In those proceedings Luvengo in his opposing
affidavit stated that he purchased the property from
ABSA on 11
February 2015. According to Mr Makgato he was surprised and
instructed his attorneys to investigate the matter. When
the file was
located (on 31 April 2015) he noted copies of the summons. The return
of service is attached to the papers and indicate
that the summons
was served by placing same under a rock. According to Mr Makgato he
would have defended the matter had he been
aware thereof. In order to
explain the delay in bringing the rescission application after he had
allegedly only learned of the
existence of the default judgment on 17
February 2015, the applicants then had to bring an application for
condonation. I have
already dealt with the application for
condonation for the period 17 February 2015 until 7 April 2015.
[21]
Were the
applicants aware of the summons and were they aware of the default
judgment that had been granted against the Doornkloof
(and Irene)
property? I have already pointed out that Mr Makgato alleged that he
only learned of the sale in execution during February
2015. This
cannot be so for the following reasons: (i) The summons was served on
the applicants (by placing it under a rock) on
18 October 2007.
Already on 20 November 2007 a note was made on ABSA’s computer
system indicating that Mr Makgato had contacted
ABSA with an
undertaking to make payments of the arrears. On the probabilities it
must in my view by accepted that the applicants
were fully aware of
the summons as far back as November 2007. No steps were taken at the
time to defend the matter. (ii) Default
judgment was granted on 24
January 2008 and the Doornkloof property was declared specifically
executable. (iii) The first sale
in execution (which can only follow
where a property has specifically been declared executable) was
arranged for 7 May 2008. On
7 May 2008 Mr Makgato made certain
payments towards the outstanding amounts and the sale in execution
was cancelled. It is
inconceivable that the applicants could
not have been aware of the sale in execution hence their attempts to
settle the outstanding
amounts shortly before the sale in execution.
(iv) More in particular, in April 2008 Mr Makgato contacted ABSA with
the aim of
arranging to pay the outstanding amounts in instalments.
In this letter Mr Makgato specifically requested ABSA to “rescind
the judgment”. The same happened in respect of the sale in
execution that was arranged for 6 August. The applicants, again
following the same
modus
operandi
,
made a payment on 31 July 2008. Again the sale in execution was
cancelled. (v) A further sale in execution was arranged for 16
January 2013. On 8 January 2013 the arrear amount was paid and the
auction sale was again cancelled. (vi) The applicants again
fell in
arrears and because no payments have been made, the sale in execution
proceeded on 11 February 2015. (vii) Furthermore,
in October 2009 Mr
Makgato in an email from ABSA was informed that ABSA has obtained two
default judgments against him (and Mrs
Makgato) and that ABSA will
not, in light of the then (current) status of the loan account,
oppose an application for rescission.
Despite this letter and despite
various attempts to arrange for a sale in execution the applicants
have done nothing to rescind
the judgment
[22]
In light of
the above I am of the view that the applicants knew about the default
judgment as far back as November 2007 but have
taken no steps to
either defend the matter nor to rescind the default judgment. This
application is years out of time. I do not
accept that the applicants
have not been aware of the default judgment in light of the facts
that I have referred to. Furthermore,
the loan account is in arrears
and it is not disputed by the applicants in their application for
rescission. If regard is had to
the replying affidavit, there can be
no doubt that the applicants were aware of the two default judgments:
In this regard Mr Makgato
specifically confirmed that he was informed
by ABSA that ABSA does not intend proceeding with legal action should
he pay all the
arrears. What Mr Makgato does not tell the court is
the fact that the applicants have not paid the entire outstanding
amount at
the stage and only made one payment. Soon thereafter the
applicants again fell in arrears with their payments.
[23]
I am
therefore not persuaded that the applicants were not aware of the
default judgment in light of the facts as set out hereinabove.
The
application for rescission is therefore at least six years out of
time. For the period preceding 17 February 2015 no explanation
has
been tendered for the extraordinary delay in bringing the rescission
application.
[24]
What
further complicates the matter for the applicants is the fact that Mr
Makgato completely destroys his version (namely that
he only became
aware of the default judgment in February 2015) advanced in the
founding affidavit in the rescission application
and the application
for condonation by admitting (in the replying affidavit) that an
employee of ABSA told him in that “the
matter would be settled
if I paid the arrear amount in full”.
[25]
In terms of
Rule 31(2)(b) the rescission ought to have been launched within 20
days after the applicants have obtained knowledge
of the judgment. In
this regard I reiterate that I do not accept, for the reasons set out
hereinabove, that the applicants only
became aware of the default
judgment during 2015. Furthermore, the consecutive execution sales
arranged by ABSA over the years
could not have left the applicants in
any doubt that ABSA did not abandon the judgment that was granted in
their favour or that
ABSA have waived its rights in terms of the
default judgment. The present application was launched more than six
years after the
applicants had obtained knowledge of the judgment and
in the absence of any application for condonation the application
cannot
be heard as one in terms of Rule 31(2)(b).
[26]
The
application for rescission can further also not be founded upon Rule
42 of the Rules. The purpose of Rule 42 is to correct expeditiously
an obvious wrong judgment or order. See
Bakoven
Ltd v G J Howes
:
[1]
“
Rule
42(1)
(a)
,
it seems to me, is a procedural step designed to correct
expeditiously an obviously wrong judgment or order. An order or
judgment is 'erroneously granted' when the Court commits an 'error'
in the sense of a 'mistake in a matter of law (or fact) appearing
on
the proceedings of a Court of record' (
The
Shorter Oxford Dictionary
).
It follows that a Court in deciding whether a judgment was
'erroneously granted' is, like a Court of appeal, confined to the
record of proceedings. In contradistinction to relief in terms of
Rule 31(2)
(b)
or under the common law, the applicant need not
show
'good cause' in the sense of an explanation for his default and
a
bona fide
defence (
Hardroad (Pty) Ltd
v Oribi Motors (Pty) Ltd (supra
at 578F-G);
De Wet
(2) at 777F-G;
Tshabalala
and Another v Peer
1979
(4) SA 27
(T)
at
30C-D). Once the applicant can point to an error in the proceedings,
he is without further ado entitled to rescission. It is
only when he
cannot
rely
on an 'error' that he has to fall back on Rule 31(2)
(b)
(where he was in default of delivery of a notice of intention to
defend or of a plea) or on the common law (in all other cases).
In
both latter instances he must show 'good cause'. This pattern emerges
from the decided cases.”
[27]
I am not
persuaded that there was an irregularity in the proceedings nor that
the court lacked competence to make the order. Lastly
no facts were
placed before the court that the court, at the time the order was
made, was unaware of facts which, if known to it,
would have
precluded the granting of the order.
[28]
I am
likewise also of the view that the applicants have not made out a
case for the rescission of the default judgment in terms
of the
common law. There is no question of fraud in this matter and no such
an allegation is made. Furthermore, in so far as there
may exists
sufficient cause for the rescission of the default judgment, the
applicants have not presented a reasonable and acceptable
explanation
for the default and have not placed such facts before the court upon
which it can be concluded that the applicants
have a
bona
fide
defence which
prima
facie
carries some prospect of success. See in this regard:
[zRPz]
Chetty
v Law Society, Transvaal
:
[2]
“
The
appellant's claim for rescission of the judgment confirming the rule
nisi
cannot be brought under Rule 31 (2)
(b)
or Rule 42 (1), but must be considered in terms of the
common
law, which empowers the Court to rescind a judgment obtained
on default of appearance, provided sufficient cause therefor
has
been shown. (See
De Wet and
Others v Western Bank Ltd
1979
(2) SA 1031 (A)
at
1042 and
Childerly
Estate Stores v Standard Bank of SA Ltd
1924 OPD 163.)
The term "sufficient cause" (or "good
cause") defies precise or comprehensive definition, for many and
various
factors require to be considered. (See
Cairn's
Executors v Gaarn
1912 AD
181
at 186
per
INNES JA.) 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:
(i) that the party
seeking relief must present a reasonable and acceptable explanation
for his default; and
(ii) that on the
merits such party has a
bona
fide
defence which,
prima
facie
, carries some
prospect of success. (
De
Wet's case supra
at
1042;
PE Bosman Transport
Works Committee and Others v Piet Bosman Transport (Pty) Ltd
1980
(4) SA 794
(A)
;
Smith NO v Brummer NO and
Another; Smith NO v Brummer
1954
(3) SA 352 (O)
at
357 - 8.)
It is not sufficient if only one of
these two requirements is met; for obvious reasons a party showing no
prospect of success on
the merits will fail in an application
for rescission of a default judgment against him, no matter how
reasonable and convincing
the explanation of his default. And ordered
judicial process would be negated if, on the other hand, a party who
could offer no
explanation of his default other than his disdain of
the Rules was nevertheless permitted to have a judgment against
him rescinded
on the ground that he had reasonable prospects of
success on the merits. The reason for my saying that the appellant's
application
for rescission fails on its own demerits is that I am
unable to find in his lengthy founding affidavit, or elsewhere in the
papers,
any reasonable or satisfactory explanation of his default and
total failure to offer any opposition whatever to the confirmation
on
16 Septembe
r 1980 of the rule
nisi
issued on 22 April 1980.”
[29]
In
conclusion: If regard is had to the founding affidavit it is patently
clear that there simply is no defence to ABSA’s claim.
Furthermore, in as far as a suggestion has been made that ABSA had
somehow settled the dispute between them, there simply do not
exist
any facts on which a compromise as belatedly alleged by the
applicants have been established. In order to establish the existence
of such a compromise agreement between the applicants and ABSA all
the facts must be considered: The fact that ABSA had arranged
various
consecutive execution sales could not have left the applicants in any
doubt that ABSA did not waive its rights obtained
in the default
judgment. Furthermore, if regard is had to the letter in which ABSA
indicated that the applicants are free to bring
a rescission
application it simply cannot serve as the foundation of a new
agreement in terms of which ABSA had waived the default
judgment
especially in light of the fact that the applicants have not
proceeded with an application for rescission at the time.
[30]
In the
event the following order is made:
1.
The
application for condonation for the late filing of the rescission
application for the period 17 February 2015 up until 7 April
2015 is
granted.
2.
The
application to rescind the default judgment granted on 24 January
2008 is dismissed.
3.
The
applicants are ordered jointly and severally the one paying the other
to be absolved to pay the first respondent’s costs.
_________________________
AC
BASSON
JUDGE
OF THE HIGH COURT
Appearances:
On
behalf of the applicant
Adv
CA da Silva SC
Instructed
by: Van Zyl’z Inc
On
behalf of the first respondent
Adv
JG Bergentuin SC
Instructed
by: Van Zyl Le Roux Inc
[1]
1992 (2) SA 466 (E).
[2]
1985 (2) SA 756
(A).