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[2016] ZAGPPHC 325
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De Beer v Absa Bank Ltd (25071/2012) [2016] ZAGPPHC 325 (6 May 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
6/5/2016
Appeal Case No. A882/2014
Case No. 25071/2012
Reportable
Of interest to other
judges
Revised.
In the matter between:
MARTHINUS JOHANNES DE
BEER
Appellant
and
ABSA BANK
LIMITED
Respondent
Case Summary: Practice
- Judgment and orders - Summary judgment - Rescission of a summary
judgment cannot be claimed under Rule
42(1)(a) of the Uniform Rules
of Court when neither a defendant nor his legal representative
appeared at the hearing but had submitted
an affidavit opposing
summary judgment.
JUDGMENT
MEYER J (PRINSLOO and
JW LOUW JJ concurring)
[1] This is an appeal
against an order of the North Gauteng High Court (Bertelsmann J) on
26 November 2013, dismissing the appellant's
application for the
rescission of a summary judgment that was granted against him in
favour of the respondent, Absa Bank Limited
(the bank). The appeal is
with leave of the court a quo.
[2] As at 17 April 2012
the appellant was indebted to the bank in an amount of R461 544.03
and interest thereon at the rate of 9%
per annum. The indebtedness
arose as a result of monies lent and advanced by the bank to the
appellant pursuant the conclusion
of a home loan agreement (the home
loan agreement). The indebtedness is secured by a mortgage bond which
the bank holds over an
immovable property owned by the appellant (the
immovable property). The appellant was further indebted to the bank
for the repayment
of other amounts that the bank had lent and
advanced to the appellant pursuant to the conclusion of three other
loan agreements
(the other loan agreements). He was also indebted to
other creditors arising from the conclusion of credit agreements.
[3] On 2 February 2010,
the appellant applied to a debt counsellor, Ms Adri Botha of New Life
Debt Counselling (the debt counsellor),
in terms of s 86(1) of the
National Credit Act 34 of 2005 (the Act) to have himself declared
over-indebted. The debt counsellor
inter alia notified the bank and
her review and assessment culminated in an order being made in the
Magistrate's Court, Pretoria-North
on 9 February 2011 declaring the
appellant to be over-indebted and re-arranging his obligations
arising from the credit agreements
listed in the order, including the
other loan agreements (the re-arrangement order). However, the home
loan agreement was - for
some or other reason which is not presently
relevant - not included in the re-arrangement order.
[4] The appellant was in
default under the home loan agreement. By letters dated 18 April 2012
the bank's attorneys gave notice
of termination of the review
proceedings in respect of the home loan agreement in terms of s
86(10) of the Act, which subsection
provides that-
'(i)f a consumer is in
default under a credit agreement that is being reviewed in terms of
this section, the credit provider in
respect of that credit agreement
may give notice to terminate the review in the prescribed manner to –
(a) The consumer;
(b) The debt
counsellor; and
(c) The National
Credit Regulator, at any time at least 60 business days after the
date on which the consumer applied for
the debt review.'
[5] The bank then
commenced legal proceedings for the enforcement of the home loan
agreement. During May 2012 it instituted an action
in the North
Gauteng High Court, Pretoria under case number 25071/12 against the
appellant. Therein it claimed payment of the amount
of R461 544.03,
interest thereon at the rate of 9% per annum from 18 April 2012, for
the immovable property to be declared specially
executable and costs
(the action). After the appellant had given notice of his intention
to defend the action the bank filed an
application for summary
judgment. The appellant filed an affidavit in opposition to the
application for summary judgment on 18
July 2012 in which various
defences were raised. The application for summary judgment was heard
in the North Gauteng High Court
(Phatudi J) on 15 February 2013.
Neither the appellant nor his legal representative appeared in court.
Summary judgment was granted
against him as claimed in the action.
[6] On 8 April 2013 the
appellant filed an application for rescission of the summary judgment
in terms of rule 42 of the Uniform
Rules of Court. Sub-rule 42(1)(a)
provides that the court may-
'. . .
mero motu
or
upon the application of any party affected, rescind or vary . . .
[an] order or judgment erroneously sought or erroneously granted
in
the absence of any party affected thereby . . .'.
The application for the
rescission of the summary judgment was opposed by the bank and the
filing of an answering affidavit and
a replying affidavit followed in
due course. The application was heard in the Gauteng Division of the
High Court (Bertelsmann J)
on 26 November 2013. Neither the appellant
nor his legal representative appeared when the matter was heard in
court. Bertelsmann
J dismissed the application for the rescission of
the summary judgment with costs.
[7] The appellant then
made application for leave to appeal against the order of Bertelsmann
J on the sole ground that the 'default
judgment' granted by Phatudi J
on 15 April 2013 against him was granted 'erroneously' and should
have been rescinded by Bertelsmann
J since, so the appellant
contends, the home loan agreement was not subject to the debt review
and the bank's notice of termination
of the debt review proceedings
in respect of the home loan agreement in terms of s 86(10) was
therefore a nullity and the bank
ought to have delivered a notice as
contemplated in s 129(1) of the Act before it was entitled to
approach the court for the enforcement
of the home loan agreement.
[8] Section 129 sets out
the required procedures before debt enforcement. Subsection 129(1)
reads as follows:
'(1) If a consumer is in
default under a credit agreement, the credit provider –
(a) may draw the default
to the notice of the consumer in writing and propose that the
consumer refer the credit agreement to a
debt counsellor, alternative
dispute resolution agent, consumer court or ombud with jurisdiction,
with the intent that the parties
resolve any dispute under the
agreement or develop and agree on a plan to bring the payments under
the agreement up to date; and
(b) subject to section
130(2), may not commence any legal proceedings to enforce the
agreement before-
(i) first providing
notice to the consumer, as contemplated in paragraph (a), or in
section 86(10), as the case may be; and
(ii) meeting any further
requirements set out in section 130.
[9] Section 130 sets out
the debt procedures in court. Subsection 130(1)(a) reads thus:
'(1) Subject to
subsection (2), a credit provider may approach the court for an order
to enforce the credit agreement only if, at
that time, the consumer
is in default and has been in default under that credit agreement for
at least 20 business days and -
(a) at least 10 business
days have elapsed since the credit provider delivered a notice to the
consumer as contemplated in section
86(9), or section 129(1), as the
case may be; . . . '
[10] The bank, on the
other hand, contends that in acting in terms of s 86(10) of the Act
it acknowledged the debt review and it
therefore did not need to
comply with the provisions of s 129 of the Act. Before us it placed
strong reliance on the decision of
the Supreme Court of Appeal in
Firstrand Bank Ltd v Owens
(16/2012) [2012] ZASCA
167. Therein, Lewis JA
said the following:
'[10] 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 must 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)
or s 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. 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). It is an
obvious error. Section 86(9) does not deal with
notices at all. And s
130(1)(a) must be read with s 129(1)(b)(i), which refers to s 86(10):
they both refer to the requisite notice
to be given to the consumer.'
(Footnotes omitted.)
[11] On 4 August 2014,
Bertelsmann J granted the appellant leave to appeal to this Full
Court. The view I take of the matter makes
it unnecessary for us to
decide whether the above quoted principles laid down by the Supreme
Court of Appeal in
Owens
apply to a case such as the present
one where a notice in terms of s 86(10) was given after a
re-arrangement order had been made
and in respect of a credit
agreement that had not been included in the order.
[12] There was no default
and the summary judgment was not granted 'in the absence of the
appellant' within the meaning of rule
42 even though the appellant
and his legal representatives failed to appear when the application
for summary judgment was heard.
Rule 34(3) of the Uniform Rules of
Court provides that-
'[u]pon the hearing of an
application for summary judgment the defendant may- (a) give security
to the plaintiff to the satisfaction
of the registrar for any
judgment including costs which may be given, or (b) satisfy the court
by affidavit (which shall be delivered
before noon on the court day
but one preceding the day on which the application is to be heard) or
with the leave of the court
by oral evidence of himself or of any
other person who can swear positively to the fact that he has a
bona
fide
defence to the action; such affidavit or evidence shall
disclose fully the nature and grounds of the de3fence and the
material facts
relied upon therefor.'
And sub-rule (5) provides
that-
'[i]f the defendant does
not find security or satisfy the court as provided in paragraph (b)
of sub-rule (3), the court may enter
summary judgment for the
plaintiff.
The appellant submitted
his affidavit in opposition to the bank's application for summary
judgment and the court was enjoined to
consider the affidavit in
deciding whether or not to grant summary judgment. (See
Verrijdt v
Honeydew Tractors and Implements (Pty) Ltd
1981 (1) SA 787
(T) at
789E;
Slabbert v Volkskas Bpk
1985 (1) SA 141
(T), at
145-146.)
[13] In
Morris v
Autoquip (Pty) Ltd
1985 (4) SA 398
(W), at p 400, Le Roux J said
the following:
'It seems to me that a
summary judgment application falls to be considered on a different
footing to that of the trial action or
even an application for
provisional sentence. Summary judgment is an extraordinary remedy, as
pointed out by MELAMET J in
Slabbert's
case. What is more, a
Court is not entitled, on the authorities quoted, to ignore an
affidavit submitted by a defendant in opposition
to an application
for summary judgment. Because of this fact it cannot, in my view, be
said that a defendant is in default when
he submitted an affidavit
opposing summary judgment even though ideally he would have wished to
have been represented by counsel.
It may be that counsel could have
swayed the Judge to make a different order had he appeared on behalf
of the defendant, but this
is not the test. This is no "default"
in the sense in which the word is used in the
Katritsis
case.
The matter differs
toto caelo
from that of a trial action.
I therefore hold that
there was no default and that the application brought for a
rescission of the judgment is the wrong procedure.'
[14] It can also, in my
view, not be said that summary judgment was granted 'in the absence
of a defendant when he submitted an
affidavit opposing summary
judgment. In this instance the appellant opposed the summary judgment
application by way of an affidavit
submitted to the court on the
merits of the matter. The summary judgment granted against the
defendant is consequently final and
res judicata.
The
application brought for the rescission of the summary judgment is,
therefore, the wrong procedure. My conclusion would have
been
different had the appellant not filed an affidavit opposing the
summary judgment application. In that event he could have
applied for
the rescission of the summary judgment under rule 42, but he would
have been limited to the grounds stated in sub-rule
(1). (See
Louis
Joss Motors (Pty) Ltd v Riholm
1971 (3) SA 452 (T), at
454H-455A.)
[15] The appellant's
application for a rescission of the summary judgment in its present
form also does not meet the requirement
of sub-rule 42(1)(a) that the
order or judgment must be 'erroneously sought or erroneously
granted'. Even if Phatudi J should have
concluded that a s 129(1)
notice ought to have been given before the bank was entitled to
enforce the home loan agreement and wrongly
disregarded the fact that
it had not been given the order would not be 'erroneously sought' or
'erroneously granted' within the
meaning of sub-rule 42(1)(a). That
renders the order appealable. The rule does not cover orders
wrongly granted. (See
Seale v Van
Rooyen and others;
Provincial Government, North West Province v Van Rooyen NO and others
2008 (4) SA 43
(SCA), para18.)
[16] In the result the
following order is made:
The appeal is dismissed
with costs.
_________________________
PA MEYER
JUDGE OF THE HIGH COURT
I agree.
_________________________
WRC PRINSLOO
JUDGE OF THE HIGH
COURT
I agree.
________________________
JW LOUW
JUDGE OF THE HIGH
COURT
Date of hearing: 20
April 2016
Date of judgment: 6 May
2016
Appellant's counsel: AA
Botha
Instructed by: Van
Heerden & Krugel Attorneys, Montana, Pretoria
Respondent's counsel: J
Eastes
Instructed by: Delport
Van Den Berg Inc., Menlyn, Pretoria