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[2017] ZAGPPHC 98
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Gray v Firstrand Bank (1436/12) [2017] ZAGPPHC 98 (27 March 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
DATE:
27/3/2017
CASE
NO: 1436/12
In
the matter between:
BRENTON
GRAHAM
GRAY
APPLICANT
and
FIRSTRAND
BANK
RESPONDENT
J
U D G M E N T
COLLIS
AJ:
INTRODUCTION
[1]
In the present application, the Applicant seeks costs in terms of
Uniform Rule 41(1) (c).The application is opposed by the Respondent.
BACKG
ROU N D
[2]
On or about 13 April 2005, and at Johannesburg, the Applicant and the
Respondent concluded a written loan agreement. Pursuant
to the loan
agreement and or about 14 June 2005, the Applicant caused to be
registered in the office of the Registrar of Deeds
Johannesburg, a
first mortgage bond
in
favour
of the Respondent as continuing covering security for all and any sum
or sums of money which may then or in
future
be owing to or claimable by
the
Respondent or claimable by
the
Respondent from the Applicant, from any cause of
whatsoever
nature.
[1]
[3]
On
12
January
2012,
the
Respondent
launched
the main application against the Applicant in respect of a breach on
the part of the Applicant
in
terms of the mortgage
loan
agreement.
[2]
[4]
As on 25 September 2011, the Applicant was in arrears for more than 6
(six) months in respect of his monthly repayments under
the mortgage
loan agreements in the amount of R188 528.21 (One Hundred and Eighty
Eight Thousand Five Hundred and Twenty Eight
Rand and Twenty One
Cents.)
[5]
The main application was opposed by the Applicant and the Respondent
upon receipt of the answering affidavit proceeded to file
a replying
affidavit.
[6]
On 18 June 2015, the set down of the main application was served on
the Applicant and thereafter enrolled for hearing, on 7
September
2015.
[7]
However, on 24 August 2015, before the hearing of the main
application, the Applicant paid an amount of R60 000.00 (Sixty
Thousand
Rand) in respect of the arrears and as a result the main
application was removed from the roll on the day of hearing.
[8]
What follows next was a withdrawal of the main application by way of
notice on 29 September 2015, without a tender for cost,
and it's this
very withdrawal which gave rise to the present application in terms
of the Uniform Rules 41(1)(c).
[9]
The Rule provides as follows:
"If
no such consent to pay costs is embodied in the notice of withdrawal,
the other party may apply to court on notice for
an order for costs".
[10]
The general principle is that the party withdrawing is liable as an
"unsuccessful" litigant to pay the costs of the
proceedings.
[3]
The court however retains a
discretion
to
deprive
the
successful party
of
his
costs.
[4]
In
the
exercise
of its discretion the court should have regard to the question
whether objectively
viewed,
the
Applicant
acted
reasonably
in
launching
the
main
proceedings but
was
subsequently driven to withdraw it in
order
to save costs, because of the facts
emerging
for
the
first time from for
instance
the Respondents
answering
affidavit
in
the
main
proceedings
or
because
the
relief was no longer necessary or obtainable because of developments
taking place after the launching of the main proceedings.
[11]
Furthermore
a
court
when
granting
any
cost
order
exercises
a
discretion
which
discretion
must
be
exercised judicially
[5]
upon
the
consideration
of
the relevant
facts
of
each
case.
In
essence
it
is
a
matter
of
fairness
to
both
parties.
[12]
In
the
present application the Respondent
in
his answering affidavit contends that as at 25 September
2011,
the total amount due by
the
Applicant amounted
to
R839 226,87 (Eight Hundred
Thirty
Nine
Two
Hundred
and
Twenty
Six
Rand
and
Eighty
Seven
Cent).
In
support
of
this
contention
the Respondent
annexed
extracts
of
bank
statements
from
the Applicant's account for the period 30 October 2011 to 22
September 2012,
[6]
evidencing,
that the Applicant
was
failing
to
make payments
of
his
monthly
debit
orders
prior to the issue of
the
application.
[13]
As a result of this breach the Respondent launched the main
application.
[14]
In
his
answering
affidavit
to
the
main
application
the
Applicant
conceded
that
he
was
in
arrears
with
his
monthly
instalments
under
the
loan
agreements.
[7]
The Applicant
stated
in
paragraph
13
of
his
answering
affidavit
that:
"I
fell on hard times due to no fault of my own but rather to the
downturn in the economy
as
I
was
in
construction and
building industry, which
has
been struggling
since
the
global
economic
crisis
started
in
2008.
I
am
slowly
but surely getting my business up and
running and back on track, and believe that within the next couple of
months I will be able
to regularise my payments
and get
back
on
track
with
the
payments due
to
the
applicant. I
will
pay the minimum
amounts
as
proposed
by
my
debt
counsellor,
alternatively,
higher amounts if I
am
able to do
so".
[15]
Subsequently to the replying affidavit being filed, the matter was
thereafter enrolled on the opposed roll and it was only
after the
matter was enrolled that the applicant paid an amount of R60 000.00
(Sixty Thousand Rand) in respect of his arrears.
[16]
The payment made on 24 August 2015 substantially reduced his arrears
to an amount of R1 107,67 (One Thousand One Hundred and
Seven Rand
and Seventy Six Cent) and it is for this reason that a notice of
withdrawal was delivered by the Respondent on 29 September
2015.
[17]
During argument counsel for the Applicant had submitted the
following:
17.1
The onus is on the Respondent to satisfy the court that there are
good grounds to deprive the
Applicant of the costs, to which as a
general rule, he is entitled.
17.2
In the answering affidavit to the main application the Respondent was
warned that the Applicant
was applying to be placed under debt review
and in terms of
Sec 86(5)
of the
National Credit Act, 34 of 2005
the
credit provider
(i.e.
Respondent)
is to
participate in the review process in good faith.
17.3
On 13 December 2011, the debt review application was removed at the
instance of the Respondent
in order to obtain instructions.
17.4
What transpired thereafter, was a termination by the Respondent of
the debt review proceedings
which termination was not valid and
concluded in terms of
Sec 86(10)
of the
National Credit Act.
17.5
The
Respondent thereafter subsequently launched its main application.
[18]
Counsel on behalf of the Respondent had made the following
submissions:
18.1
The Applicant is not entitled to costs in terms of
Rule 41(1)(c)
as
the Applicant conceded in the main application that
he had fallen into arrears in respect of his
loan
agreement.
18.2
The Applicant having fallen into arrears had committed a breach,
which
constituted the underlying causa for the instituting of the
main application.
18.3
The payment made by the Applicant on 24 August 2015 resolved his
arrears
to the satisfaction of the Respondent, which resulted
in the
substratum
and underlying causa in respect of the main application
no
longer
existing.
[8]
18.4
The withdrawal of the application resulted in the merits of the
application
not being argued before and adjudicated upon by the court
and as such the Applicant could not be considered as the successful
litigant.
18.5
Furthermore, the withdrawal of the main application was not as a
result
of lack of prospect of success but rather as result of the
payment of the arrears by the Applicant to the satisfaction of the
Respondent.
18.6
Counsel also submitted that the withdrawal of the application had
nothing
to do with the merits of the main application.
[19]
As mentioned previously, a court in considering the issue of costs,
should have regard to the question whether objectively
viewed, the
Applicant acted reasonably in launching the main application, and
whether the subsequent withdrawal of the application
was a result of
the relief no longer necessary or obtainable because of developments
taking place since the launching of the main
application.
[20]
At the outset it should be mentioned the merits or demerits of the
main application, this Court was not required to adjudicate
upon.
This I say, as counsel appearing for the Applicant spent a great deal
around the termination of the debt review proceeding
and whether in
fact such termination was as is required in terms of
Sec 86(10).
[21]
Furthermore, strong arguments were also presented in respect of
whether the Respondent in good faith participated in the debt
review
proceedings, and as counsel contends, the Respondent did not, which
would have resulted in a finding against the Respondent
in the main
application. These arguments presented by counsel would have been
best ventilated at the hearing of the main application.
[22]
Two questions to my mind are crucial in determining the outcome of
this present application. They can be listed as follows:
22.1
Firstly, objectively viewed, what brought about the launching of the
main application and whether such
launching was reasonable; and
22.2
Secondly, what development(s) took place after the
launching of the main application
which resulted in the withdrawal of
the main application?
[23]
In answering these questions the following became apparent. The
arrears which the Applicant had fallen into brought about the
launching of the main application which launching was reasonable, and
secondly, the subsequent payment made by the Applicant on
24 August
2015 resulted in the withdrawal of the main application. It is
noteworthy to mention that the payment so made, merely
substantially
reduced the arrears; it did not extinguish it in its entirety.
[24]
Furthermore, the Respondent's subsequent withdrawal of the
application was an election which was made at its instance and not
a
step which ordinarily will follow as a result of payments having been
made to settle a portion of the arrears.
[25]
Consequently, I cannot conclude that the withdrawal of the main
application resulted in the Applicant having been the successful
party, which successful party ought to be awarded the costs of the
main application.
ORDER
[26]
In the result the following order is made:
26.1
The application is dismissed with costs.
______________________
C.
J. COLLIS
ACTING
JUDGE GAUTENG DIVISION PRETORIA
APPEARANCES:
FOR
APPLICANT:
ADV. B EDWARDS
INSTRUCTED
BY: RYAN D LEWIS
INC
FOR
RESPONDENT: ADV. C DENICHAUD
INSTRUCTED
BY:
GLOVER KANNIEAPPAN INC
DATE
OF HEARING: 13 MARCH 2017
DATE
OF JUDGMENT: 27 MARCH 2017
[1]
Main application,
Founding
affidavit
para
3
pg 6
[2]
Main application
Founding
affidavit
para
9 pg
10
[3]
Germishuys v Douglas Besproeiingsraad 1973 (3) SA 299 (NC)
[4]
Waste
Products
Utilisation
(Pty)
Ltd v Wilkes
(Biccari
Interested
Party)
2003
(2)
SA 590
(W) at 597A
[5]
Gelb v
Hawkins
1960
(3) SA 687(A)
at
694
[6]
Founding affidavit
para
20-22
pg
23
[7]
Main application
Answering
affidavit
para
7
pg
63
[8]
Firstrand
Bank
Ltd
v
Nkata
2015 ZASCA
44
;
Eloff
v
Road
Accident
Fund
2009
(3)
SA 27
(CPD).