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[2016] ZAGPPHC 560
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Nedbank Ltd v Britz and Others (58912/2014) [2016] ZAGPPHC 560 (22 June 2016)
REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO: 58912/2014
In
the matter between:
NEDBANK
LTD
.......................................................................................................................
Applicant
And
ANDRIES JOHANNES
BRITZ
..................................................................................
First
Respondent
RENIER
MARTIN
...................................................................................................
Second
Respondent
HENDRIETTE MARIE MULLER
NO
...................................................................
Third
Respondent
THE MASTER, NORTH GAUTENG HIGH
COURT
.........................................
Fourth
Respondent
JUDGMENT
PETERSEN AJ:
INTRODUCTION
[1]
On 19 November 2014 the estate of the
first respondent was sequestrated by default judgment granted in
favor of the second respondent,
who was the sole applicant in the
sequestration proceedings. This is an application for the rescission
of the default judgment
granted in favor of the second respondent.
The applicant further seeks an order allowing it to intervene in the
sequestration
proceedings in the event of the relief sought in
rescinding the final sequestration, being granted. The application
for rescission
is opposed by the second respondent, whilst the
further relief in the event of the rescission being granted is not.
An application
by the wife of the first respondent to intervene in
this application was refused by this court on 03 May 2016 with costs.
An application
on 04 May 2016 by the second respondent to admit into
evidence an affidavit by his attorney with a confirmatory affidavit
of the
wife of the first respondent was unopposed by the applicant.
BACKGROUND TO THE APPLICATION
[2]
At issue in the sequestration
application was an amount of R100 000.00 owing to the second
respondent. The applicant, Nedbank Limited,
as a secured creditor,
received no notification of the provisional sequestration order and
notice of the final sequestration order
was only received on or about
25 November 2014.
[3]
The applicant instituted an
investigation into the sequestration proceedings and concluded that
the sequestration was not to its
advantage or any other creditors of
the first respondent (which includes the second respondent).
[4]
The applicant initiated these
proceedings for the main purpose of opposing the sequestration
proceedings brought by the second respondent
against the first
respondent.
[5]
The parties are ad idem that the first
respondent is the owner of immoveable property. It is not in issue
that the first respondent
and his wife are married out of community
of property and are co-owners of a half share in the immoveable
property.
[6]
The first respondent and his wife are
indebted to the applicant by virtue of a loan agreement entered into
with the applicant which
is secured by a mortgage bond in favor of
the applicant in the amount of R 1 350 000.00, together with security
in the amount of
R338 000.00.
[7]
The first respondent as at 01 December
2014 was indebted to the applicant in the amount of R1 095 641.97,
together with interest
at a rate of 7.40% per annum.
THE INTERLOCUTORY ISSUE RAISED BY THE SECOND RESPONDENT
[8]
The applicant had the immoveable
property valuated on 11 December 2014 by a registered professional
valuer Gary Wampach (“Wampach”)
who determined the forced
sale value of the property, which is the value relevant to
sequestration proceedings, to be R1 000 000.00.
[9]
At the hearing of this application,
counsel for the second respondent for the first time took issue with
the affidavit of Wampach
submitting that it fails to comply with the
Regulations Governing the Administering of an Oath or Affirmation as
promulgated in
Government Gazette R.1258 of 21 July 1972 (“the
Regulations”) as amended. The said regulations have been
promulgated
in terms of section 16 of the Justices of the Peace and
Commissioner of Oaths Act, Act 16 of 1963.
[10]
A careful reading of the founding
affidavit of Jacques Pienaar, a Senior Manager employed by Nedbank
Limited in the Home Loans Legal
Recoveries Division, illustrates that
substantial reliance is placed on the affidavit of Wampach, insofar
as the forced sale value
is determined at R1 000 000.00. The forced
sale value is the basis for contention that there is no advantage to
the creditors of
the first respondent in having him sequestrated.
[11]
Our courts are regularly faced with
documents purporting to be affidavits in compliance with the
provisions of the Regulations.
The affidavit of Wampach as with any
affidavit in general, must comply with the requirements for
affidavits as contained in the
Regulations. The Regulations are
couched in peremptory terms and requires strict compliance because of
the implications of the
contents of the document.
[12]
The procedure prescribed by the
Regulations requires of the commissioner of oaths before
administering the oath or affirmation to
ask the deponent:
(a)
Whether he knows and understands the
contents of the declaration;
(b)
Whether he has any objection to taking
the prescribed oath; and
(c)
Whether he considers the prescribed oath
to be binding on his conscience.
[13]
It has become customary that the answers
to the aforementioned questions, are typed as a matter of course. The
present matter is
no different as Wampach had the following typed in
his affidavit:
“I
Gary Wampach, Registered as a Professional Valuer, know and
understand the contents of this Affidavit, have no objection
to
taking the prescribed oath and consider the oath to be binding”.
It is noteworthy that it is not clear on what he considers
the oath
to be binding as no reference is made to his conscience. It is clear
that the regulation requires of the deponent to sign
the statement in
the presence of the commissioner of oaths and the commissioner of
oaths to certify that the deponent has acknowledged
that he or she
knows and understands the contents of the declaration.
[14]
The duty of the commissioner of oaths in
the present matter was pre-empted by Wampach who had the following
typed as part of his
“affidavit”:
“I
certify that the deponent acknowledges that he knows and understands
the contents of this Affidavit, which was sworn to
and signed before
me.”
[15]
The next procedural step is that once
the deponent answers the questions in the affirmative, the very
important step of administering
the oath by the commissioner of oaths
follows. Regulation 4(1) provides that:
"Below
the deponent’s signature or mark the commissioner of oaths
shall certify that the deponent has acknowledged that
he knows and
understands the contents of the declaration and he is required to
state the manner, place and date of taking the declaration."
[16]
The commissioner of oaths is required
to:
(1)
sign the declaration, (2) print his full
name and business address below his signature, and (3) state his
designation and (3) the
area for which he holds his appointment or
his office if he has been appointed ex officio.
[17]
The commissioner of oaths in the present
matter, signed the “affidavit”, has placed what appears
to be his initials
and surname, rank and force number above the words
“COMMISSIONER OF OATHS” and appended a stamp from
Randburg Client
Service Centre of the South African Police Service.
[18]
In Absa Bank Ltd v Botha NO and Others
(39228/12) [2013] ZAGPPHC 163;
2013
(5)
SA 563
(GNP) (7 June 2013) at para [8],
Kathree-Setiloane J, in the context of an application for summary
judgment and a challenge to
the “affidavit” in terms of
Rule 30 held:
"...
Subject to whether there has been substantial compliance with the
Regulations, the court has a discretion to refuse an
affidavit which
does not comply with the Regulations. Should a commissioner of oaths
not certify that the verifying affidavit in
a summary judgment
application had been sworn to or affirmed, the court will be
reluctant to apply the maxim omnia praesumuntur
rite esse acta donee
probetur in contrarium
1
, also known as the “presumption
of regularity”, for purposes of making the assumption that the
document had, in fact,
been sworn to (or affirmed) and signed in the
presence of the commissioner of oaths.”
[19]
On a careful perusal of the “affidavit”
of Wampach it cannot be gainsaid that it falls shy of the
requirements of the
Regulations. At most the "affidavit”
of Wampach is tantamount to a statement. Counsel for the applicant
has submitted
that even if the statement falls shy of the
requirements of the Regulations, Wampach has supplied a Valuation
Certificate wherein
he states the forced value of the immoveable
property.
[20]
Save for the challenge to the
“affidavit” of Wampach no issue is taken with his
qualifications and registration as a
professional valuer in terms of
the Property Valuers Profession Act, Act 47 of 2000. Wampach is
subject to the Code of Conduct
for the Valuers Profession 1 of
2004(“the Code of Conduct”). Insofar as the valuation
certificate is concerned, the
Code sets out what a registered person
is required to do in the conduct of his profession at section 5:
“In
carrying on the property valuers profession, a registered person
shall:
“(b)
order his or her conduct so as to uphold the dignity, standing and
reputation of the property valuers profession by maintaining
a high
standard of professionalism, honesty and integrity;
(h)
sign all property valuation reports and other documentation relating
to his or her work in the property valuers profession,
prepared by or
for him or her, and use his or title as provided for in section 22(3)
of the Act; and (i) ensure, where possible,
that his or her name is
shown on all accounts rendered in connection with property valuations
signed by him or her”.
[21]
I am accordingly satisfied that the
valuation certificate of Wampach is in compliance with the high
ethical standards as set out
in the code of conduct and suffices for
reliance on the forced sale value of the immoveable property as
relied upon by Pienaar
in the founding affidavit.
[22]
The forced sale value of the immoveable
property is challenged by the wife of the first respondent. In
addition thereto her affidavit
indicates that she has been making
regular payments to the applicant and appears to be in advance with
the payments. Counsel for
the applicant submits that this evidence
rather than advancing a case to dismiss the rescission application
supports the application.
[23]
A stark reality that the wife of the
first respondent has to face is that any sale in execution of the
half share of the first respondent
in the immoveable property will
have the undesirable effect of her having to share a half interest in
her home with a stranger.
THE APPLICANT’S CASE
[24]
The applicant relies on rule 42(1 )(a)
in submitting that the order granted by default was “erroneously
granted” The
crux of the submission is that had the judge known
that there was no benefit to the creditors of the first respondent in
sequestrating
his estate, no default judgment would have been granted
in favor of the second respondent. The applicant relies in this
regard
on Naidoo v Matlala
2012 (1) SA 143
(GP) at 153C where it was
found that a judgment is erroneously granted if there existed at the
time of its issue a fact of which
the judge was unaware, which would
have precluded the granting of the judgment and which would have
induced the judge, if aware
of it, not to grant the judgment.
[25]
Whilst Section 10(c) and 12(1 )(c) of
the
Insolvency Act 24 of 1936
, has been argued in seeking dismissal
of the sequestration order as one of the initial prayers, it is
relevant in my view to the
submission that default judgment was
granted erroneously. The crux of the provisions being that there must
be an advantage to creditors
of the debtor if a final order of
sequestration is granted. A fact the applicant submits was unknown to
the judge in granting the
sequestration order.
[26]
The applicant submits that the following
basic calculation illustrates that the sequestration of the first
respondent holds no advantage
to any of the creditors alternatively
no dividend will accrue to any of the concurrent creditors:
ASSETS BALANCE
Immoveable
property bonded to R1 000 000.00
Nedbank
Less
bond debt
(R1 095 641.97)
TOTAL
(R 95 641.97) A.
ADMINISTRATION COSTS
3%
on value of immoveable property R30 000.00
VAT
@14% R 4 200.00
R34 200.00
6%
auctioneers costs on value of R60 000.00
immovable
property
R 8 400.00
VAT
@14%
R68 400.00 B.
OTHER
ADMINISTRATION COSTS
Master
Fees R 205.00
Costs
to arrange security R 216.00
TOTAL COSTS OF SEQESTRATION R103
021.00
(A+B)
AMOUNT
AVAILABLE FOR
DISTRIBUTION
ASSETS TOTAL -(R 95 641.97)
LESS SEQUESTRATION COSTS -(R103
021.00)
TOTAL
AMOUNT AVAILABLE FOR -(R198 662.97)
DISTRIBUTION
DIVIDEND PAYABLE TO R0.00
CONCURRENT CREDITORS
[27]
On the common law requirements it is
submitted that the applicant was not in willful default as it was not
aware of the sequestration
proceedings and that it has a bona fide
defence to the second respondent’s sequestration application of
the first respondent
with the crux being that there is no reasonable
belief that there is any advantage to the creditors.
THE RESPONDENTS CASE
[28]
Counsel for the second respondent
submits that “
Rule 42
does not purport to amend or extend the
common law. Its object and purpose is to provide the procedure for
the rescission of judgments
and it has no effect on common law
principles”. In support of this submission reliance is placed
on the case of Theron NO
versus United Democratic Front (Western Cape
Region) and others
1984 (2) SA 532
(C). Counsel submits that the
factual and legal conclusions of Strauss J in the sequestration
application cannot be attacked on
the basis that it was wrongly
decided and was not the intended purpose of
Rule 42.
[29]
Relying on Colyn supra at para 6, it is
submitted that the rule is only a procedural rule and does not create
substantive law. On
the requirements of
Rule 42
it is further
submitted that there was no procedural defect in the matter. Whilst
the applicant’s interest in the matter
is not disputed it is
submitted that the failure to serve notice of the sequestration
proceedings on the applicant does not necessarily
constitute a
procedural error.
[30]
It is submitted with reliance on
National Pride Trading 452 Pty Ltd v Media 24 Ltd
2010 (6) SA 587
(EC) that a mistake in the proceedings is the operative requirement.
It is contended that the mistake/error must appear from the
record of
proceedings. The basis of this submission is founded in Bakoven Ltd v
G J Howes (Pty) Ltd
1992 (2) SA 466
(E) at 472D, where it was said
that judgment granted in the absence of the applicant Bakoven could
not have been said to have been
granted erroneously “in the
sense contemplated in
Rule 42(1
)(a), as applicant cannot point to an
error or irregularity appearing from the record of proceedings".
In the final analysis
it is submitted that the application cannot be
brought under the guise of an “erroneously” granted
provision thereby
seeking a total appeal of the facts and the
decision of the court that granted the order sequestrating the estate
of the first
respondent.
THE LAW APPLICABLE TO THE RESCISSION APPLICATION
[31]
The applicant seeks rescission of the
default judgment in terms of Uniform
Rule 42(1
)(a) or in the
alternative in terms of the common law.
Uniform
Rule 42(1
)(a) provides that:
“The
Court may, in addition to any other powers it may have, mero motu or
upon 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;...”
[32]
In terms of the common law a judgment
may be rescinded provided *sufficient or good cause” has been
shown by the applicant.
Our courts have accepted that sufficient or
good cause entails two essential elements:
(1)
a reasonable and acceptable explanation
for the default (otherwise stated as an absence of wilful default;
and
(2)
a
bona fide defence on the merits
with prima facie prospects of success (a bona fide
defence).
See Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape)
2003 (6) SA 1
(SCA) at 9C; Silber v Ozen Wholesalers (Pty) Ltd
1954
(2) SA 345
(A) at 352H- 353A.
It
may be added that the application must be made bona fide.
DISCUSSION
[33]
It is a basic principle of our law that
an order of court or judgment stands until set aside by a court of
competent jurisdiction.
Even in the event of such order or judgment
being wrong it is presumed until the contrary is proven that the
judgment is correct.
Rule 42(1
)(a) provides one of the remedies to
rescind an order or judgment erroneously granted. Whilst a court of
competent jurisdiction
is afforded a discretion whether or not to
grant an application in terms of this sub-rule, the common law remedy
is not excluded
by the sub-rule.
Rule 42(1)
is unambiguous in this
regard in the words “...in addition to any other powers it may
have...”.
[34]
The difference between the sub-rule and
the common law is that a finding that a judgment or order has been
granted erroneously should
as a matter of cause lead to the
rescinding of the judgment without any further enquiry needed. In
terms of the common law, the
applicant is required to show good
cause.
[35]
The respondent relying on Bakoven
submits that the mistake or error must appear from the record of
proceedings. The Supreme Court
of Appeal in Colyn, however, has made
it clear that that in deciding whether or not a judgment has been
granted erroneously a court
would not be confined to the record of
proceedings. It is my view accordingly that the submission by the
respondent that the applicant
is bringing an appeal under the guise
of an application for rescission is misplaced. This Court is at
liberty to revisit the sequestration
proceedings if it is shown that
the judgment was granted erroneously because of some fact which was
unknown to the court when granting
such order.
[36]
The absence of any advantage to the
creditors of the first respondent in his sequestration by the second
respondent is a fact that
clearly was not part of the papers. On the
papers the court was satisfied that the final sequestration of the
first respondent
was merited. I have no basis to fault the finding
leading to the final sequestration order. I am likewise not in
position to say
if the court would have refused the application for
sequestration of the first respondent had the absence of advantage to
his creditors
been shown. It is my considered view that the intention
of the legislature could not have been to afford the courts an
opportunity
to create a list of circumstances which would constitute
a circumstance to find that a judgment has been granted erroneously.
I
am accordingly not inclined to exercise my discretion in favor of
the relief sought in terms of Uniform
Rule 42(1
)(a).
[37]
I turn to the common law. It is my view
that the requirements at common law do not require of me to revisit
the merits of the sequestration
proceedings leading to the
sequestration of the first respondent. Upon a careful preponderance
of the requirements, I am satisfied:
(1)
that the applicant for obvious reasons
was not in willful default as it had never been notified of the
sequestration proceedings
and the explanation furnished by the
applicant is reasonable and acceptable.
(2)
that the application by the applicant
has been made bona fide after having been informed of the
sequestration of the first respondent,
causing the sequestration to
be investigated and initiating this application within two and half
months of such knowledge.
(3)
that the applicant has a bona fide
defence to the sequestration of the first respondent with prima facie
prospects of success.
[38]
I am further satisfied that on the
subject matter of the default judgment that the applicant has a
direct and substantial interest
in the sequestration of the first
respondent.
COSTS
[39]
In the ordinary course costs follows the
successful party. Counsel for the respondent has urged the court not
to grant costs against
the second respondent in opposing this
application. Counsel for the applicant seeks a costs order.
CONCLUSION
[40]
In the result it is ordered:
[40.1]
That the order of final sequestration of
the first respondent issued on 19 November 2014 be rescinded;
[40.2]
That the applicant be allowed to
intervene in the sequestration proceedings of the first respondent by
the second respondent.
[40.3]
Costs are awarded to the applicant on an
attorney and client scale.
AH PETERSEN
ACTING JUDGE OF THE HIGH COURT OF
SOUTH AFRICA
Appearances:
On behalf of the Applicant:
Advocate R. Carvalheira
Instructed by Enderstein and Van
Merwe Incorporated
On behalf of the Second Respondent:
Adv K Lewies
Intsructed by Heckroodt and
Associates
DATE HEARD: 04 May 2016
DATE OF JUDGMENT: 22 June 2016