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[2016] ZAGPPHC 891
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Harbor Pointing CC v Absa Bank Ltd (13117/12) [2016] ZAGPPHC 891 (23 September 2016)
REPUBLIC OF SOUTH AFRICA
GAUTENG
HIGH COURT DIVSION, PRETORIA
23/9/2016
CASE NO: 13117/ 12
Reportable:
No
Of
interest to other judges: No
Revised.
In
the matter between:
HARBOR
POINTING
CC
Applicant
and
ABSA
BANK
LIMITED
Respondent
JUDGMENT
MNGQIBISA-THUSI,
J:
[1]
The applicant seeks the following relief:
1.1 that the default
judgment granted against it be rescinded.
1.2 that the applicant is
granted leave to defend the action.
1.3 Costs.
[2]
During 2007, the respondent and the applicant concluded a loan
agreement for the purchase of an immovable property situated
at Erf
29, Bushveld View Estate, Hartebeesfontein, Brits, ('the immovable
property'). In the loan was secured by a mortgage bond
over the
immovable property. The loan agreement the applicant's
domicilium
address is the mortgaged property or any other mortgaged property
(clause 10 of the agreement).
[3]
As appears from the papers filed of record, on 11 April 2012 the
responded issued summons against the applicant for the payment
of an
amount of R611 073.69 and that the immovable property be declared
specially executable. In the summons the applicant is cited
as Harbor
Point Investments 6 CC. However, attached to the summons is a
certificate of balance (in compliance with clause 9 of
the mortgage
agreement), indicating the client as Harbor Point Investments 3 CC.
Furthermore, the summons were served at Erf 28,
Bushveld View Estate,
Hartebeesfontein, Brits, and not at the chosen
domici/ium
address.
It is the applicant's contention that there was no effective service
of the summons which was served on a vacant stand.
[4]
On 26 January 2015, the respondent sold the property to a third
party, Mr William Teague. The property has since been registered
in
Mr Teague's name.
[5]
The
respondent has applied for the striking out of the applicant's
replying affidavit in that it was filed out of time (i.e 10 months
after service of the answering affidavit)
[1]
and that the applicant has not sought condonation of its late filing
of its replying affidavit.
[6]
Cognisant
of the failure by the applicant to seek condonation for the late
filing of its replying affidavit, in view of the decision
This court
is going to make, I am of the view that the replying affidavit should
not be struck out in order for this court to be
apprised of all the
relevant facts in this case and also bearing in mind that a third
party's rights might be affected. Furthermore,
I am also of the view
that the respondent's application, in the alternative, that certain
paragraphs
[2]
in the replying
affidavit should be struck out as the applicant is only allowed to
make its case in its founding affidavit. Having
considered the
paragraphs referred to, I am of the view that the applicant was
entitled to respond to the issues raised by the
respondent in its
answering affidavit.
[7]
The applicant seeks the rescission of a default judgment on the
grounds that at the time default judgment was granted the applicant
was not in arrears. Further, the applicant alleges that at the time
judgment was obtained the parties had reached settlement and
that it
had subsequently paid an amount of R100 000.00 in terms of the
settlement agreement. In support of its allegation, the
applicant
attaches to its founding affidavit a copy of a settlement agreement.
However, it is apparent from the settlement
agreement that
reference is made to Harbor Point Investments 3 CC. I am of the view
that the applicant's contention in this regard
is misplaced in that
the settlement agreement relates to another entity (Harbor Point
Investments 3 CC) and not the applicant.
Furthermore, the applicant
contends that had the court been aware that service was not effected
at the chosen domicilium address,
it would not have granted the
default judgment.
[8]
With regard to its default the applicant contends that it only became
aware of the default judgment during May 2015 when it
received
information that the immovable property has been sold. This
information was only confirmed by the respondent during May
2015.
[9]
The
respondent is opposing the application that the respondent was in
wilful default
[3]
in that it
must have been aware of the judgment, particularly as execution over
the property had been effected. Furthermore, it
is the respondent's
contention that the applicant should have been aware of the judgment
in that the sale in execution was postponed
on several occasions due
to the fact that the each time the applicant had made payment shortly
before the day of execution.
[10]
The main ground upon which the applicant is seeking the rescission of
the default judgment granted against it is that it was
not aware that
the applicant had instituted an action against it as the summons were
not served at the chosen
domicilium
address. In short, it is
the applicant's contention that the judgment was erroneously granted
in view of the defective service.
Furthermore, the applicant relies
on the fact that the summons was defective in that the certificate of
balance related to a different
entity and therefore the amount
claimed as owing at the time the application was made could not have
been correct. In its replying
affidavit, the applicant clarifies that
it is seeking the rescission of the default judgment in terms of the
provisions of Rule
42, alternatively, under common law.
[11]
Rule 42(1)(a) provides that a court may, in addition to any other
powers it may have,
mero motu
or upon 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.
This means that the applicant has to show that the court in granting
the default judgment
had committed an error "in the sense of a
mistake in a matter of law appearing on the proceedings of a Court of
record.
Bakoven Ltd v GJ Howes (Pty) Ltd
1992 (2) SA 466
(ECO). If the applicant can prove the error committed by the court,
it is not necessary for him to explain his default.
[12]
Under the common law, in order for the court to grant an order
rescinding a previous order or judgment the applicant has to
show
sufficient cause. In other words the applicant must give a reasonable
explanation for his default, must show that he has a
bona fide
defence and must also show that he has a bona fide defence which
prima facie
has some prospect of success.
Chetty v Law
Society, Transvaal
1985 (2) SA 756
(A) at 765.
[13]
In terms of clause 10 of the mortgage agreement, the applicant chose
as its
domicilium
address the mortgaged property situated at
Erf 29, Bushveld View Estate, Hartebeesfontein, Brits. Even though
the respondent did
not attach the return of service for the summons,
from the summons it is clear that the
domici/ium
address is
indicated as Erf 28, Bushveld View Estate, Hartebeesfontein, Brits.
Furthermore, the respondent's notice in the government
gazette (dated
9 January 2015) the applicant's physical address is listed as Erf 28,
Bushveld View Estate, Hartebeesfontein, Brits.
[14]
Rule 4(1) (a) (iv) provides that:
"Service of any
process of the court directed to the sheriff and subject to the
provisions of paragraph (aA) any document initiating
application
proceedings shall be effected by the sheriff in one of the following
manners:
…
(iv) if the person so to
be served has chosen a
domicilium citandi,
by delivering or
leaving a copy thereof at the
domicilium
so chosen".
[15]
In
Shepard
v Emmerich
[4]
the
court held that where a
domicilium
address
has been chosen in an agreement, strict compliance with the clause in
the agreement is required. Erasmus
[5]
states that "To effect service on a neighbouring property, even
if it belongs to the same owner, is not proper and effective
service
as required by this subrule". The risk of non-receipt of legal
notices where a consumer has chosen a
domicilium
address
lies with the consumer.
Rossouw
v Firstrand Bank Limited
2010
(6) SA 439
(SCA);
Munien
v BMW Financial Services (SA) (Pty) Ltd and Another
2010
(1) SA 549
(KZD).
[16]
As appears from the applicant's explanation for failing to defend
that action, I am satisfied that the applicant was not in
wilful
default. As indicated above, there was no proper and effective
service of the summons in that the summons were served at
an
incorrect address which was not the applicant's chosen
domicilium
address. I am satisfied that the applicant has shown sufficient
cause for the rescission of the default judgment and that the prayers
sought ought to be granted.
[17]
As the judgment was obtained erroneously and I intend granting the
applicant prayer 2 of its notice of motion, Mr Teague is
an
interested party and ought to be joined in the main action.
[18]
It is not necessary at this stage to determine the issue of costs and
costs will be costs in the cause.
[19]
Accordingly the following order is granted:
1. The default judgment
granted against the applicant on 11 April 2012 is rescinded.
2. The applicant be
granted leave to defend the action.
3. Mr Teague to be joined
in the main action.
4. Costs to costs in the
cause.
___________________
NP
MNGQIBISA-THUSI
Judge
of the High Court
Appearances:
For
Applicant: Adv N Alli
Instructed
by: Ramolao Ramotsehoa Attorneys
For
Respondent: Adv J Eastes
Instructed
by: Delport Van Dr Berg Inc
[1]
In terms of Rule 6(5)(e) of the Uniform Rules of Court a replying
affidavit may be delivered within 10 days of service of the
answering affidavit.
[2]
Paragraphs 6; 9.2; 10.2-10.4; part of 18.1; 18.2-18.3; 22; 25 and
32-34.
[3]
Rule 31(2)(b) provides that a defendant may within 20 days after he
has knowledge of a judgment against him by default apply
to court
upon notice to the plaintiff to set aside such judgment, and the
court may, upon good cause shown, set aside the default
judgment on
such terms as to it seems meet. In terms of Rule 31(2) (b) an
applicant for rescission of a judgment must show good
cause. This
means that the applicant has to give a reasonable explanation for
the default, must show that his application is
bona fide, and be
able to show that he has a bona fide defence to the respondent's
claim which prima facie has some prospect
of success. Grant v
Plumbers (Pty) Ltd
1949 (2) SA 470
(0).
[4]
2015 (3) SA 309 (GJ).
[5]
Erasmus Superior Court Practice at 01-34.