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[2017] ZAGPPHC 839
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Felix and Another v Nedbank Limited (A585/15) [2017] ZAGPPHC 839 (2 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
2/3/2017
CASE
NO: A585/15
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
JOSE
AMERICO GONSALVES
FELIX
First
Appellant
MARIA
JUDITE PESTANA
FELIX
Second
Appellant
and
NEDBANK
LIMITED
Respondent
JUDGMENT
Tuchten
J
:
1.
This is an appeal from an order made by Lephoko AJ sitting in the
opposed motion court. The respondent (the Bank) launched an
application against the appellants for payment of the sum of R2 374
273.12, interest, an order declaring the respondents' property
in
Bruma, Johannesburg specially executable for these amounts and costs.
I shall refer to the claims and orders for payment and
interest
2.
The Bank claimed the money relief on a written agreement of loan,
which was attached to its founding affidavit. For the execution
relief, the Bank's founding affidavit stated that the Bank relied on
a single mortgage bond, for a capital amount of R200 000,
a copy of
which was attached to the founding affidavit. But it seems that the
Bank wanted to rely on a further mortgage bond. I
say this not
because the Bank referred to this further bond in its founding
affidavit (it did not) but because all but the first
page of another
mortgage bond was attached to its founding affidavit.
3.
The appellants gave notice of intention to oppose and delivered an
answering affidavit. They raised two defences: firstly, that
the
deponent to the Bank's founding affidavit was not authorised to make
the affidavit; and, secondly, that the appellants had
invoked the
dispute resolution procedure contemplated in
s 129
of the
National
Credit Act, 34 of 2005
.
4.
The appellants' defences as raised have no merit. It is not necessary
for a litigant to prove that a deponent is authorised to
make an
affidavit upon which it relies, any more than a party in a trial is
required to prove that a witness the party calls is
authorised to
give evidence in support of its case. The affidavit is evidence. When
tendered by a litigant, the court must have
regard to it and then
rule on the admissibility of the evidence tendered, if necessary, and
assess its weight.
5.
In relation to the
s 129
defence, the evidence was that the Bank drew
the provisions of
s 129
to the attention of the respondents in a
letter dated 23 May 2013. At that stage, the appellants were in
arrears in the amount
of R282 508. In response, the first appellant
wrote the Bank a letter dated 10 July 2013. The entire body of the
letter, after
the acknowledgement of receipt of the Bank's
s 129
letter, reads:
In
this regard I wish to advise that I elect option 3 of your letter, to
refer the matter to an alternative dispute resolution agent.
I
trust the above is in order.
6.
Section 129
contemplates that if there is a dispute, the consumer may
elect to refer the dispute to, amongst other organs, an alternative
resolution
agent. The appellants did not suggest that there was a
dispute; nor did they refer anything at all to an alternative
resolution
agent.
Section 129
provides no bar to the Bank's claim.
7.
When the matter was called in the opposed motion court on 28 July
2014, the appellants were represented by counsel. Counsel for
the
appellants stated that "we" had attempted to negotiate a
settlement and that counsel could not take the matter further.
Counsel said:
We
were attempting to perhaps get favourable terms for the [present
appellants] but in any event as I said, that may happen even
if your
Lordship grants an order today.
8.
Counsel for the Bank then put up a draft order. The court below made
an order in terms of the draft, for R2 600 059 and interest
on that
sum from 30 June 2014 to date of payment. The court also declared the
mortgaged property executable for the judgment debt
and costs and
made a costs order. The difference between the amount of the money
judgment and the amount claimed in the notice
of motion is because
the interest due was capitalised to 30 June 2014.
9.
By notice of application dated 5 August 2014, the appellants applied
for leave to appeal against the "whole of the Judgment",
which I interpret to mean the whole of the order made. The grounds
relied upon are prolix, but they reduce to the following: firstly
that the execution order might lead to the appellants' losing their
home and infringed the appellants' constitutional right to
housing;
secondly, that the
in duplum
rule might be of application;
thirdly that the appellants'
s 129
rights had been infringed,
particularly because the case should have been referred for
alternative dispute resolution; fourthly,
that excessive interest had
been charged; fifthly that the authority conferred upon the deponents
to the Bank's affidavits had
not been proved and that the contents
were hearsay.
10.
The application for leave came before Lephoko AJ who concluded that
another court might find that the Bank was not entitled
to the
execution order. This, the learned judge observed, was the only
ground advanced that had any merit. I agree. On that basis
leave to
appeal was granted. Thus the present appeal.
11.
Before Ideal with the merits of the appeal, there are two
interlocutory applications before us. The first, chronologically,
is
for condonation for the late delivery of the Bank's heads of
argument. The reason for the late delivery was probably that the
attorney's messenger did not do his job and file them in court on the
day he was instructed to do so. The messenger has an explanation
which would place the blame for the late filing with the Registrar's
staff. There are problems with this explanation. It conflicts
with
the personal knowledge of one of the members of this court. But the
fault, if any, lies with the attorney, not the Bank and
the late
filing of the heads occasioned no prejudice. I would therefore
condone the late filing of the heads but order the Bank
to pay the
costs of the application for condonation.
12.
The second such interlocutory application is one brought by the
appellants for the postponement of the appeal itself. The application
was brought by the appellants personally. The ground advanced is one
sadly familiar to those who serve on this Bench. This appeal
was set
down for hearing on 22 February 2017. The appellants have neglected
to file the notice of set down of the appeal as part
of the record
but the appeal must have been set down many months ago. The
appellants allege that their attorney and advocate withdrew
without
giving reasons on 3 February 2017. No heads of argument were filed on
behalf of the appellants.
13.
According to a notice dated 17 February 2017, the appellants are now
represented by Khoza Attorneys. Why these attorneys did
not sign the
application for postponement is not explained. The appellants allege
that their present attorneys agreed to represent
them and briefed one
Advocate Shaw for this purpose. But Adv Shaw was, as must have been
known to the appellants and their attorney
at the time, unavailable.
He had to be in Cape Town on the date upon which this appeal was set
down for hearing. Why the appellants'
attorney briefed an advocate
who was not available to argue the appeal is not explained.
14.
Adv Shaw drafted a letter on his own letterhead for submission to the
court in which he makes the case for a postponement. He
submits that
the Bank was obliged to arrange rescheduled payments for the
appellants. But the appellants have not put up a single
fact on the
strength of which it might be said that rescheduling the appellants'
debt is a practical commercial option; nor is
it suggested that the
appellants have in the more than three years since the Bank launched
its application in the court below ever
approached the Bank with a
concrete proposal for rescheduling the appellants' debt.
15.
The appellants' present lawyers say that they cannot act until they
are put in funds and that it will then take them a month
to prepare
for the appeal. But the appellants do not explain whether they put
their previous lawyers in funds and why they are
unable to provide
their new lawyers with funds. Nor do they explain why they could not
retain the services of the advocate who
had been briefed on their
behalf by their previous attorney who, it must be presumed, would
have been able to prepare properly
for the appeal.
16.
When the appeal was called, however, the appellants were represented
by counsel, Mr RF Onovo, who said that he had been briefed
merely to
move for a postponement. Adv Onovo said when questioned by the Bench
that he was unable to address the court on the appellants'
prospects
of success on appeal. He could not explain why he was unprepared on
this score. Prospects of success are relevant to
an application for
postponement of this kind. This is because a court will be
disinclined to grant a postponement when the ultimate
outcome is a
foregone conclusion.
17.
Dealing with prejudice to
the Bank, which the appellants appear to concede is relevant to the
request for a postponement, the appellants
say this:
[1]
In
comparison with the prejudice that the [appellants] will suffer as a
result of their property being declared specially executable,
the
prejudice to the [Bank] is negligible,
since
it is the [appellants7 intention to settle this matter and bring the
payments fully up to date.
[2]
18.
The appellants will suffer no prejudice arising from the order for
execution. It is common cause that the property is the appellants'
home. So the Bank could not take steps to sell the property in
execution or evict the appellants without further court proceedings
on notice to the appellants. The only practical effect of the
execution order is that it permits the Bank to levy execution,
subject
to the Rules of Court, on the property without first
executing against the appellants' movables. But the execution order,
by itself,
would not entitle the Bank to execute against the
appellants' property.
Rule 46(1)(a)
provides:
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 primary residence of the
judgment debtor,
no writ shall issue unless the court, having
considered all the relevant circumstances, orders execution against
such property.
19.
The appellants are also
wrong in saying that the prejudice to the Bank is negligible. To
explain why I say this, I must refer to
the Bank's answering
affidavit in the application for postponement. This answering
affidavit was served on the appellants personally
[3]
on 21 February 2017, the very day that the application for
postponement was served on the Bank. But Adv Onovo was not briefed
with the answering affidavit. At some inconvenience to members of the
Bench, the appeal stood down until after the luncheon adjournment
to
enable Adv Onovo to take instructions and consider his position. All
counsel was prepared to submit when the court reconvened
was that the
deponent to the Bank's affidavit had not provided proof of his
authority to speak on behalf of the Bank. I have dealt
with this
argument in another context. It has no merit. There was no suggestion
from counsel that the appellants might want to
file a replying
affidavit.
20.
I draw from the answering affidavit the following few but important
facts, which are substantially corroborated by the appellants'
own
affidavit: the last payment made by the appellants in reduction of
their admitted indebtedness to the Bank was R20 000, which
was made
on 13 August 2014. The arrears are in excess of a million rands, the
equivalent of almost 55 instalments.
21.
So the appellants have lived in their property for over two years at
the expense of the Bank. There is not a bottomless pit
of funds
available to the reputable banking sector for loans to aspirant home
owners. New loans can only be granted if banks obtain
fresh capital
for this purpose or deploy the funds paid by existing mortgagors
towards reduction of their indebtednesses. Mortgagors
who do not
repay their loans as they fall due prejudice the entire corpus of
aspirant home owners because their failure to pay
reduces the fund
available for new entrants into the home ownership market, ie by and
large young people who are trying to make
their way in life.
22.
There is not a single concrete allegation made by the appellants that
casts any doubt on the correctness of the Bank's bookkeeping.
So on
the admitted facts, the appellants have no prospect of success in its
appeal against the money judgment. They have not shown
how they
intend to pay what they owe. In addition, the appellants have put up
nothing to show that they can pay any costs order
made against them
if the appeal is postponed.
23.
Finally, there is the prejudice to the administration of justice.
Three judges have been required to prepare for and devote
time
towards this appeal. All that time and effort will probably be wasted
if a postponement is granted because it is unlikely
that the same
members of the Bench would be empanelled to hear the appeal if it
were once again to be set down for hearing.
24.
To summarise: the appellants have given a poor explanation for why
they need a postponement; they have no prospects of success
on one of
the two substantive orders appealed against; their own prejudice is
negligible if the appeal goes ahead; and the prejudice
to the Bank
and the administration of justice if the appeal does not go ahead is
substantial. For these reasons, we refused the
postponement, with
costs, and directed that the hearing of the appeal itself proceed.
Counsel for the appellants then withdrew
and shortly thereafter left
the court.
25.
The merits of the appeal
may be disposed of in short order. The conclusion of the agreement of
loan is not in dispute; nor is the
fact that the appellants have
failed to pay instalments under the loan on due date. The allegations
as to the quantum of the appellants'
indebtedness were not placed in
dispute by any credible evidence. But it was, no doubt, overlooked in
the court below that the
second appellant's indebtedness to the Bank
arises from a deed of suretyship, in terms of which her liability was
limited to the
sum of R1,8 million together with such further sum or
sums for interest, charges and costs including legal costs on an
attorney-client
scale as should from time to time have accrued or
become due and payable thereon.
[4]
The money order must therefore be amended to incorporate this
limitation. Subject to that, the appeal against the money judgment
must fail.
26.
It is trite that in motion proceedings the affidavits fulfil the
functions both of pleadings and of evidence. In relation to
the
appeal against the execution order, the Bank simply did not allege in
its founding affidavit the mortgage bond upon which the
Bank sought
to ground the major part of its claim to a security for the loan it
made. The position is thus that the Bank did not
give evidence of
that component of its security. The appeal against the execution
order must therefore succeed and be replaced
by one of absolution
from the instance. This means that the Bank may bring such fresh
proceedings in relation to execution upon
its money judgment as it
sees fit.
27.
As to costs: the appellants have been substantially successful on
appeal. That would usually carry an award of costs. Butthe
appellants
and their lawyers have not in any way contributed to the constructive
resolution of this appeal. On the contrary, the
appellants have
contrived, whether deliberately or inadvertently, to obstruct the
hearing of the appeal and their lawyers were
not adequately prepared
and gave no assistance to the court. In my view it would be just to
direct that each party pay its own
costs in relation to the appeal.
28.
In relation to costs in the court below: the Bank was substantially
successful. There is no reason why costs should not follow
the
result. The respondents agreed in the agreement of loan to pay costs
on the attorney and client scale in the event of litigation
such as
the present. The costs order in the court below must therefore be
confirmed.
29.
I therefore propose the following order:
1.
1.1.
The late submission of the respondent's heads of argument is
condoned.
1.2.
The respondent must pay the costs of the application for condonation
on the unopposed scale.
2.
2.1.
The application for the postponement of the appeal is refused.
2.2.
The appellants must pay the costs of the application for
postponement.
3.
The appeal succeeds in part.
4.
The order in paragraph 1 of the order of the court below dated 28
July 2014 is replaced by the following:
"Payment of the
amount of R2 600 059; provided, however, that the indebtedness of the
second respondent, Maria Judite Pestana
Felix, is limited to the sum
of R1,8 million together with such further sum or sums for interest,
charges and costs including legal
costs on an attorney- client scale
as shall from time to time have accrued or become due and payable
thereon."
5.
The order in paragraph 3 of the order of the court below dated 28
July 2014 is replaced by the following:
"On the applicant's
claim for the respondents' property, erf 38 Bruma Township, to be
declared specially executable, the order
is one of absolution from
the instance."
6.
The order in the court below that the respondents pay the costs of
the application on the scale as between attorney and clientis
confirmed.
NB
Tuchten
Judge
of the High Court
27
February 2017
I
agree. An order is made
as
set out in paragraph 29 above.
RG
Tolmay
Judge
of the High Court
28
February 2017
I
agree
PM
Mabuse
Judge
of the High Court
28
February 2017
[1]
Para 15 of the founding affidavit in the application for
postponement
[2]
My emphasis
[3]
By service on the second appellant
[4]
Clause 1 of the deed of suretyship