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[2016] ZAGPPHC 748
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Mohlahlo and Another v Standard Bank of South Africa (52592/2014) [2016] ZAGPPHC 748 (12 August 2016)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH
AFRICA,
NORTH
GAUTENG DIVISION,
PRETORIA
CASE
NO:
52592/2014
DATE:
12/8/2016
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
MAHLAKENG
JANUARY
.
MOHLAHLO
…................
First
Applicant
MMASHOTO
..
EMILY
..
MOHLAHLO
Second
Applicant
and
THE
STANDARD BANK OF SOUTH
AFRICA
…..........
Respondent
JUDGMENT
MSIMEKI
J,
INTRODUCTION
[1]
The applicants, in this application, seek an order rescinding a
default judgment which the respondent obtained against them
on 11
September 2014. The application is opposed.
BACKGROUND
[2]
The applicants and the respondent concluded loan agreements which
were secured by mortgage bond numbers [ 8.../1994], [8…/2006]
and [8…/2007]. The total amount due, owing and payable by the
applicants, to the respondent, at the time of the default
judgment
application, according to the papers, amounted to R985 647 21. The
arrears at the time amounted to R85 011 56. Default
judgment was
granted on 11 September 2014. The respondent obtained a writ of
execution to have the applicants immovable property,
namely Erf [2..]
Raceview Township Registration Division IR, The Province of Gauteng
also known as[ 4.. Glen Albyn Street, Raceview],
sold on 26 November
2014 at Alberton. The applicants were served with the Warrant of
Execution and Notice of Attachment on 11 October
2014. The applicants
launched an urgent application seeking an order stopping the sale. On
25 November 2014 the parties agreed
that the sale in execution be
stayed. The applicants were ordered to launch an application for the
rescission of the default judgment
"within 20 (twenty) days of
the date of this order for failing which, the sale in execution shall
proceed". The costs
of the application were reserved. Letters
were exchanged between the parties relating to the rescission
application. There are
disputes relating to the launching of the
rescission application, the
Section 129
Notice
and whether the application should succeed or not.
[3]
The applicants' case, in a nutshell, is that it is, indeed, correct
that they concluded agreements with the respondent in respect
of
loans that the respondent advanced to the applicants. The loans were
secured by the mortgage bonds that were registered over
the
applicants property referred to above. It is also their case that the
respondent, when they defaulted with their payments,
sent them a
Notice in terms of
Section 129
read with
Section 130 of the
National Credit Act 34 of 2005 (the NCA).
They also concede that
following the
Section 129
Notice, summons was also
served on them. Their argument is that upon receipt of the
Section
129
Notice, same was taken to Mr Jaco Joubert (Jaco) of the
respondent's attorneys and that they had a discussion with regard to
the
Notice. Again, upon receipt of the summons, Jaco was again
approached. The promise he made to them was that he would attend to
the matter and revert to them. This, according to them, created a
legitimate expectation that the respondent would not proceed with
the
matter before reverting to them. This is denied by the respondent.
[4]
The first applicant telephoned Jaco when he heard nothing from him.
An undertaking, according to him, was again given that they
would be
contacted as soon as the matter was discussed with the respondent. To
their surprise, they were, this time, served with
a Warrant of
Execution and Notice of Attachment of their property on 11 October
2014. They then contacted their attorneys.
[5]
Mr S Laka (Mr Laka), the applicants' attorney, submitted that the
respondents had disregarded the provisions of
Section 9 of the
Constitution Act 108 of 1996
as well as
Sections 129, 130 and
61
and 66 of the NCA
in that the action was brought
prematurely. It appears that the applicants' case is based on what
they call a "legitimate expectation"
-that the respondent
would not proceed with the matter until Jaco reverted to them. The
respondent contends that the applicants
were assisted by Mr Jaco
Posthumus, an employee and administrative clerk at the respondent's
attorney's office and not Jaco Joubert.
[6]
The respondent contends that the application for rescission of
judgment was brought out of time. In other words, it was not
launched
as the Urgent Court ordered on 25 November 2014.
[7]
The respondent contends that no legitimate expectation was ever
created by it or anyone on its behalf. The respondent concedes
that,
a meeting was held but states that the first applicant was advised
that the matter would be proceeded with until an agreement
had been
reached. The first applicant, according to Posthumus, was requested
to furnish documents which would enable him to obtain
instructions
from the respondent. A list of the required documents, according to
Posthumus, was given to the first applicant who
had to furnish them
to enable the respondent to instruct its attorneys. The documents, up
to the time the answering affidavit was
deposed to, had not been
given as requested. Posthumus states that it was made abundantly
clear to the first applicant that the
respondent would proceed with
the legal action unless the applicants participated as they were
required to. The applicants, according
to Posthumus, did nothing and
never defended the matter which was proceeded with until judgment by
default was obtained.
[8]
The respondent contends that:
1.
the applicants failed to make out a case for the relief they seek on
their papers.
2.
they have failed to sufficiently explain why they disregarded the
advice of the respondent's attorney, namely that the legal
process
instituted would proceed until an acceptable solution was found.
3.
they have failed to sufficiently explain their failure to defend the
action.
4.
they have failed to show a good cause for the rescission of the
judgment.
5.
they have failed to set up a
bona fide
defence.
6.
they have failed to comply with the requirements for any application
for rescission of judgment set out in the
Uniform Rules of Court
or as required by the common law.
[9]
It is noteworthy that:
1.
the applicants acknowledge their5 obligations and debt in terms of
the loan agreements.
2.
the applicants concede that they were in arrears with their payments
in terms of the loan agreements. This clearly comes out
in paragraph
19 of annexure LA1 to the founding affidavit. Annexure LA1 is a
letter from the applicants' attorneys to the respondent's
attorneys.
3.
In the third last paragraph of their letter to the respondent's
attorneys dated 31 October 2014 appearing on page 37 of the papers,
the applicants' attorneys state:
"We
are of the view that
while our clients may not have
a
defence to the arrears amount due as at date of ju
dgment,
they do have
a
valid reason to rescind the Default
Judgment based
on the procedural aspects
mentioned
in our letter of
31st ultimo."
(my emphasis).
4.
the applicants received the Section 129 Notice.
5.
they concede that the summons was duly served on them although they
state that it was prematurely issued.
6.
they were served with a Warrant of Attachment issued on 29 September
2014. The property was attached on 13 October 2014.
7.
the applicants were supposed to have launched the rescission
application within 20 (twenty) days from the date of the order.
[10]
The applicants contend that the rescission application was launched
within the time period stipulated by the Court on 25 November
2014
while the respondent, disagrees.
[11]
Mr Laka submitted that while the applicants may not have a defence to
the arrears, the application is nevertheless based on
the procedure
which the respondent did not observe up to the time of the default
judgment. It is the applicants' contention that
upon receipt thereof
they took the
Section 129
Notice to the respondent's
attorneys. The respondent's attorneys, told them to wait. "Without
any feedback", according
to them, they were served with the
summons. Further the respondent, according to them, disregarded the
representations and applied
for default judgment.
[12]
It is submitted on behalf of the applicants that the summons was
issued while the applicants were waiting for a feedback regarding
the
Section 129
Notice. This, according to the submission, was in
contravention of
Sections 66
and,
130 of the NCA
and
Section 9 of the
Constitution Act 108 of 1996 ("the
Constitution").
It is their submission that the rights
mentioned in
Section 9
of the Constitution are protected by
these sections of the
NCA.
Mr Laka, for the applicants,
submitted that the respondent failed to observe the provisions of
Section
66(1)
(d)
in that it took
an action which accelerated and enforced the credit agreement.
[13]
Mr Richard, for the respondent, submitted that the respondent's case
is simple and clear. The applicants, according to him,
were in
arrears with their payments. A Section 129 Notice was sent to the
applicants. The applicants, because they wanted the matter
resolved
were required to produce documents which would assist the respondent
to consider the matter. It is denied that the applicants
would not
proceed with the matter before the applicants heard from the
respondent. Nothing worthwhile was done by the applicants
who had not
been paying as they were expected to for a while. Summons was issued
and served on the applicants who again took the
summons to the
respondent's attorneys. Mr Richard specifically submitted that no
undertaking or legitimate expectation was created
by the respondent
or its attorneys. However, according to him, what the applicants were
informed was that the respondent would
proceed with the action until
same was satisfactorily resolved. After obtaining default judgment,
the respondent instructed the
Sheriff of the High Court to attach and
sell the property in execution.
[14]
The sale in execution as explained above was stayed and the
applicants had to comply with the Court order of 25 November 2014
regarding the launching of the rescission application. The applicants
and their legal representatives hold the view that the application
was properly launched while Mr Richard, the respondent's attorney
holds a different view.
[15]
The respondent contends that although the applicants had to comply
with the payment of the monthly instalments of RB 584 26,
throughout
the period from 2011 up until 2013 certain debit orders were
returned. The respondent contends that the applicants'
payment
history reveals that only two payments of R1000 00 and R500 00 were
received during 2014. The end result was that arrears
amounted to R85
011 56 when the respondent took action against the applicants.
[16]
Mr Richard submitted that the
Section 129
Notice preceded the
summons which was procedurally correctly issued and served. Reference
was made to
Nedbank Ltd and Others v The National Credit Regulator
2011 (3) SA 581
(SCA) in
which the purpose of the
Section 129
Notice was spelt out. The purpose is to enable the parties to
resolve the dispute under the agreement or to develop or agree on a
plan to bring the agreement up to date prior to the enforcement of
the credit agreement and to avoid enforcement once the matter
is
amicably resolved.
[17]
Mr Laka, for the applicants, submitted that the enforcement of the
agreement was hastily made in that the matter was prematurely
brought
before the Court.
[18]
It must be borne in mind that the applicants were given the
Section
129
Notice. This was after the applicants had not been paying
properly for a long time. They received the Notice which called on
them
to have the matter resolved. They were aware they were not
complying with the agreements they had concluded. Considering the
dates
of the agreements the matter is indeed old. It, indeed, should
have been incumbent upon the applicants to have the matter resolved
as speedily as possible. They received the summons which again
informed them of the significance of the matter. They appear to
have
done nothing save to say that they were waiting for a feedback. I do
not think that this constitutes sufficient explanation
for their
default. It is in any event not convincing.
[19]
The particulars of claim alert the applicants to the provisions of
Section 26(1)
and
26(3)
of
the
Constitution
(the
Bill
of Rights)
dealing with access to adequate housing,
execution and eviction from one's home.
[20]
What is very important is whether the applicants are entitled to the
relief that they seek.
[21]
The applicants had been in arrears for a long time. They received the
Section 129
Notice. It was submitted that they may not have a
defence relating to the arrears. Indeed, no defence has been shown.
In
Absa Bank v Peterson
2013 (1) SA 481
(WCC) 25
the application
for rescission where the applicant had not received the
Section
129
(1)
(a)
Notice was refused. The applicants in this matter received the
Section 129
Notice. The applicants themselves clearly did not
furnish a reason demonstrating that they have a valid defence in the
action. The
applicants up until the matter was argued did nothing to
show their willingness and ability to bring the monthly payments up
to
date.
[22]
Mr Laka, submitted that the respondent could not in terms of
Section
129 (1) (b) of the NCA
commence any legal proceedings to enforce
the agreement before giving the applicants the required notice and
complying with the
other requirements set out in
Section 130.
The applicants, as I pointed out above, received the notice and,
according to them, proceeded to the offices of the respondent's
attorneys. They duly received the summons but say nothing about
paying the respondent the money that was due owing and payable.
[23]
Regarding delivery of the application as directed by the Court, Mr
Laka submitted that no condonation was required as the application
was served via fax on 20 December 2014. What transpired in the
matter, according to respondent's attorneys, is as follows:
1.
On 1O December 2014, by way of a letter addressed to the respondents
attorneys, the applicants attorneys requested an extension
of time
within which to launch the application. The extension was refused.
2.
on 18 December 2014, the respondents attorneys of record reminded the
applicants attorneys that 24 December 2014 was the last
day on which
they could launch their application. However, they informed the
applicants attorneys that they could serve the application
by e-mail.
3.
On Saturday 20 December 2014 at 10:13am the applicants attorneys
through an e-mail requested another extension of the time period.
At
15:13pm which was five hours later, the request was refused by the
respondent's attorneys. At 11:30am the same day, according
to Mr
Richard, the applicants' attorneys "ostensibly" faxed the
application to the respondent. The application appears
not to have
been received by the respondent's attorneys who, instead, received a
Notice of Set Down of the application which was
served on the
respondent's correspondent attorneys in Pretoria. The respondent's
correspondent attorneys immediately informed the
respondent's
attorneys who immediately enquired about the status of the
application from the applicants attorneys.
4.
The parties on 18 December 2014 and 20 December 2014 communicated via
e-mail. The respondent's attorney's e-mail of
18
December 2014, to assist the applicants' attorneys, confirmed that
they would receive the applicants' application for rescission
on or
before 24 December 2014 via e-mail. The e-mail addresses were
furnished.
5.
Despite the confirmation that service of the application would be via
e-mail, same, according to the applicants' attorneys was
faxed to the
respondent's attorneys. The respondent's attorneys do not seem to
have received the faxed application. Instead, it
is said that the
first document which they received from the applicants' attorneys was
the Notice of Set Down. Secondly, why would
they at 15:13pm on 20
December 2014 refuse the extension if the application by then had
been received by them? The applicants'
attorneys, if indeed they
faxed the application, must have done that 47 minutes after their
request without even waiting for the
reply to their request. What
transpired on 20 December 2014 appears strange. The application,
according to the respondent's attorneys,
was furnished on 18 February
2015.
6.
Mr Richard submitted that the Registrar's date stamp on the
application shows that the Notice of Motion was only issued on 9
January 2015 and that the application could not have been launched
within the time period stated in the Court order granted on
25
November 2014. Condonation, according to Mr Richard was not set out
and sought in the founding affidavit. Only a cursory reference
to
condonation, which is sought, according to him, appears in the
replying affidavit while this ought to have been properly done
in the
founding affidavit. (See:
Bayat
and
Others v
Hansa and Others
1955 (3) SA 547
(N)
and
Herbstein and
Van Winese:
'Civil Practice
of
the
High Court of
South Africa'. Volume 1. 5th Edition at
429)
.
[24]
Mr Richard submitted that the application was fatally defective
because it was brought out of time with no proper application
for
condonation to rectify the defect. Mr Laka's submission, in any
event, is that condonation was not necessary. The application,
at any
rate, was according to him, delivered within the ordered time limit.
[25]
Even if condonation was granted there still would be the problem
pertaining to the applicants defence to the respondents action.
It
has been conceded that the applicants may not have a defence to the
arrears that have accumulated. The applicants received the
Section
129
Notice and the summons was properly served on them. The
legitimate expectation that the applicants refer to is denied by the
respondents.
One may ask: why would the respondent create such an
expectation if it had been waiting for payment for a long time? The
respondent's
version on this aspect is much more probable. The
respondent's version is also supported by
Plascon-Evans Paints
Ltd
v
Van Riebeeck
Paints
(Pty)
Ltd
[1984] ZASCA 51
;
1984
(3)
SA
623
(AD)
at
634E-1
and
Stellenbosch Farmers Winery (Pty) Ltd
v Stellenbosch
Winery (Pty)
Ltd
1957
(4)
SA
234
(C)
at
235E-G
where the
court said:
"...where
there is a dispute as to the facts a final interdict should only be
granted in notice of motion proceedings if the
facts as stated by the
respondents together with the admitted facts in the applicant's
affidavits justify such an order...Where
it is clear that facts,
though not formally admitted, cannot be denied, they must be regarded
as admitted."
Granting
the relief that the applicants seek, in my view, will serve no
purpose.
[26]
The application is based on
Rule 42 of the Uniform Rules
of
Court.
This appears from paragraph 57 of the founding affidavit
on page 15 of the papers. Mr Richard submitted that the applicants
made
no attempt to rely on
Rule 31(2)(b)
or the common law.
This is in fact correct.
Rule 42
provides:
"42
Variation and rescission of orders
(1)
The Court may, in addition to any other powers it may
have, mero motu or upon the application of any party affected,
rescind
or vary:
(a)
An order or judgment
erroneously sought or
erroneously granted in the absence of any part y
affected thereby
:
(b)
An order or judgment in which there is an ambiguity or
a
patent error or omission, but only to the extent of such
ambiguity, error or omission;
(c)
An order or judgment granted as the result of
a
mistake
common to the parties."
(my emphasis).
[27]
Mr Richard submitted that
Rule 42 is
designed to correct
expeditiously an obviously wrong judgment or order. (See:
Bakoven
Ltd v G
J
Howes (Pty) Ltd
1992 (2) SA 466
(E) at 471 E-F
and
Promedia
Drukkers
&
Uitgewers
(Edms)
Bpk v Kaimowitz and Others
1996 (4) SA
411
(C)
at
417 B-1).
In the absence of the
jurisdictional facts contained in
Rule 42 (1)(a)-(c),
the
Court has no discretion to set aside an order in terms of this Rule.
(See:
Van der Merwe v Bonaero Park (Edms)
Bpk
1998
(1) SA 697
(T) at 702H
and
Swart
v Absa Bank Ltd
2009 (5) SA 219
(C) at 222B-C).
Mr
Richard submitted further that the trend by the Courts over the
years, has been to interpret the Rule in such a way that it did
not
include "all
kinds of mistakes or irregularities"
(See:
Colyn v
Tiger Food Industries Ltd t/a Meadow Feed Mills
(Cape) 2003 (6)
SA 1
(SCA)
at
7D).
[28]
Mr Richard's interpretation of
Rule 42
is that
Rule 42 (b)
and (c)
are excluded in this application which then, according to
him, means that only
Rule 42 (a)
remains applicable.
[29]
For
Rule 42 (a)
then to apply, the applicant must demonstrate
that the order of 11 September 2014 was erroneously sought or
erroneously granted.
An order or judgment, according to Mr Richard,
is erroneously granted if there is an irregularity in the proceedings
or if the
Court was not legally competent to grant the order. (See:
Athmaram v Singh
1989 (3) SA 953
(D) at 956D, Primedia Drukkers &
Uitgewers (Edms) Bpk
v Kaimowitz
1996 (4) SA 411
(C) at
417G-H
and
First
National Bank of Southern
Africa Ltd v Jurgens and others
1993
(1) SA 245
(W) at
247 D). In Lodhi 2 Properties Investment
CC and Another
v Bender Developments (Pty) Ltd
2007 (6)
SA 87
(SCA),
Streicher JA at (27]
said:
"
Similarly, in
a
case where
a
plaintiff is
procedurally entitled
to judgment in the absence of the
defendant the judgment if granted cannot be said to have been granted
erroneously in the light
of
a
subsequently disclosed
defence. A Court which grants
a
judgment
by
default like the judgments we are presently concerned with, does not
grant the judgment on the basis that the defendant does
not have
a
defence: it grants the judgment on the basis that the
defendant has been notified of the plaintiff s claim as required by
the Rules,
that the defendant, not having given notice of an
intention to defend, is not defending the matter and that the
plaintiffs in terms
of the Rules entitled to the order sought. The
existence or non-existence of
a
defence on the merits is an
irrelevant consideration and,
is subsequently
disclosed, cannot transform
a
validly obtained
judgment
into
an
erroneous
judgment."
[30]
Mr Richard submitted that the applicants received the
Section 129
Notice and that the summons was duly served on the applicants.
The applicants, according to the respondent, were duly warned that
the action would not be stopped for as long as the matter remained
unresolved. This, according to Mr Richard, precluded the applicants
from employing
Rule 42 (1) (a).
The further submission was
that the respondent was procedurally entitled to the judgment
obtained by default. The order according
to the submission, was
neither erroneously sought nor erroneously granted. The applicants,
in my view, aware of the
Section 129
Notice and the summons,
failed to persist in getting the matter properly resolved or pay the
money which became due owing and payable
to the respondent by them.
Nothing, as correctly submitted by Mr Richard, has been demonstrated
to show that the judgment ought
to be rescinded.
[31]
The respondent is honest enough to admit that the applicants attended
at the offices of its attorneys to discuss the matter
and to consider
a solution to the outstanding arrears. However, the applicants,
according to Mr Richard, did not want to take the
Court into their
confidence by disclosing that they were supposed to have furnished
the respondent's attorneys with documents which
would have enabled it
to consider the matter. These documents to date, still have not been
furnished. From the time the matter
was argued to date nothing has
been said regarding payment of the arrears. Had the matter been
resolved, this, no doubt, would
have been communicated to the Court.
This simply explains the absence of a valid defence to the
respondent's action and payment
of the arrears.
[32]
It is Mr Richard's submission that the applicants demonstrated a
wanton disregard of the respondent's request that required
documents
be furnished. This, once more, demonstrates the absence of any
defence on the part of the applicants. The submission,
in my view,
seems to have merit. Indeed, the respondent, for a number of years
now, has been waiting for payment which has not
been forthcoming. The
applicants' explanations, in my view, reveal no good cause of their
wilful default.
[33]
Section 66 (1) of the NCA,
according to Mr Richard, is not
there for the credit consumers to frustrate the legal process of
credit suppliers. I agree. Further,
according to Mr Richard,
Section
129
Notice is there to invoke equal participation by the parties
to achieve a speedy resolution of a matter. This is also true.
[34]
That the applicants were not given sufficient time to amicably settle
the matter, according to Mr Richard, appears to be ill-founded
and
without basis. I agree. The application in my view, should fail and
be dismissed with costs.
[35]
The following order is made:
The
application is dismissed with costs.
___________________________
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION OF THE HIGH COURT,
PRETORIA