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[2016] ZAGPPHC 932
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Motsepe v Nedbank Limited (19618/15) [2016] ZAGPPHC 932 (4 October 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER:19618/15
DATE:4
October 2016
MOTSEPE:
NOBUNTU
KANYISA
Applicant
v
NEDBANK
LIMITED
Respondent
JUDGMENT
MABUSE
J:
[1]
This is an application for rescission of a default judgment. By a
notice of motion signed on 16 March 2015 the Applicant, Mrs
Nobuntu
Kanyisa Motsepe ("Motsepe"), seeks rescission of a default
judgment that the Respondent, Nedbank Limited, ("the
Bank"),
obtained against her and her former husband on 18 July 2007 under
case number 26057/07. This application is opposed
by the Bank which
has, for that purpose, delivered an answering affidavit.
[2]
Motsepe described herself as an adult female and the Second Defendant
in case number 26057/07. The First Defendant in that matter
was one
Eugene Tebogo Motsepe. Through the entire judgment that follows I
will refer to the said Eugene Tebogo Motsepe as "the
First
Defendant". Motsepe and the First Defendant were married to each
other in community of propErfy on 13 December 2012.
Their marriage
endured until 19 November 2012when it was terminated by an order of
court. Despite the fact that the action in case
number 26057/07 was
instituted against both Motsepe and the First Defendant, and more
importantly, that the impugned judgment was
obtained against both of
them, the First Defendant plays no role in this application for
rescission. This Court will deal
with aspect and its effect
later in the judgment.
The
issues to be decided in this matter are:
(a)
whether the registrar of court should have referred the Bank's
application for default judgment to an open
Court so that such an
application could be considered by a Judge instead of the Registrar
himself granting the judgment;
(b)
secondly, whether the Bank was entitled to use a simple summons to
enforce its rights arising from a mortgage bond
or credit agreement;
and thirdly and lastly,
(c)
whether it was proper for the registrar to declare a judgment
debtor's propErfy executable. When the matter came before me on
7
June 2016, the Applicant was represented by Mr. Jansen while Mr
Minnaar represented the Bank. Heads of argument on behalf of
Motsepe
had been prepared by a cErfain Adv. Katlego Mahlase. In such
heads he had pointed out that the issues that the Court
was called
upon to decide were:
"(a)
whether or not the Respondent complied with the requirements of s 129
of the National Credit Act
54 (sic) of 2005 prior to issuing summons;
(c)
whether the registrar's grant of the default judgment was justifiable
in law; and
(d)
whether the Applicant meets the jurisdictional fact requirements as
set out in the Gundwana v Steko
Developments CC
[2011] (3) SA 608("
Gundwana")
, decision so as to declare the registrar's default
judgment of 18 July 2007 under case number 26057/07 retrospectively
unconstitutional
and therefore of no force or effect".
[3]
On 22 June 2007 the Bank, a general bank duly registered and
incorporated in accordance with the company and banking laws of
this
country instituted an action by way of a simple summons against
Motsepe and the First Defendant in which it claimed:
3.1
payment of the sum of R716,153.17 ("the amount claimed"),
as
set out in the certificates of balance. The said amount
represented monies due and owing by Motsepe and the First Defendant
to
the Bank as at 1 June 2007 under Mortgage Bond No. B53083/2005
("the mortgage bond") registered on 19 July 2005. The
said mortgage bond hypothecated Erf [.... M. E.], Ext 1 Township,
Registration Division l.R., Germiston North, the Province of
Gauteng,("the property") in respect of a sum of
R696,600.00. The amount claimed represented and included capitalised
interest of the balance of monies due and owing from time to time
under the said mortgage bond computed up to 1 June 2005. The
terms of
the mortgage bond and the loan of money by the Bank to Motsepe and
the First Defendant appeared to be common cause between
Motsepe and
the Bank. The amount claimed had become due and payable by Motsepe
and the First Defendant to the Bank by reason of
their failure,
notwithstanding lawful demand by the Bank, to pay the instalments
promptly on the due dates;
3.2
payment of interest on the said amount of claim at the rate of 13%
per annum calculated and capitalised monthly in advance in terms of
the mortgage bond from 1 June 2005 to date of payment;
3.3
an order declaring the aforementioned property executable for the
claim
plus costs. I wish to pause here and to point out that the said
summons contained the following warning:
"The
Defendant/s attention is drawn to section 26(1) of the Constitution
of the Republic of South Africa that accords to everyone
the right to
have access to adequate housing. Should the Defendant/s claim
that the order of execution
will infringe that
right, it is incumbent on the Defendant/s to place the
information supporting that claim before
the Court "
[4]
A copy of the summons was served on the First Defendant on 8 June
2007 at 06h03 at [.... S. R], Malvern East Ext 1, Germiston
North,
which address was his chosen
domiciliumcitandi
et
executandi
by affixing it to the principal door. There is
a complaint though by Motsepethatshe was not served with a copy the
relevant simple
summons. This complaint appeared for the first in her
replying affidavit only. I will deal with this aspect later in the
course
of the judgment. In the meantime in the bunch of papers placed
before me titled INDEX 1- RESCISSION APPLICATION UNDER CASE NO.
19618/15 at page 71 there is a copy of the Sheriff's return of
service of a copy of the simple summons served on Motsepe on 28 June
2007 at 06h03 at [.... S. R], Malvern East Ext 1, Germiston North,
her
chosen domiciliumcitandi et executandi
by affixing it to
the principal door. The case number in the said return of service is
2605712007.
[5]
Having been served with a copies of the summons it was required of
both of them, if for whatever valid reasons they disputed
the Bank's
aforementioned claim and wished to defend the action, to notify it
within 10 days of being so served. They were both
warned that if they
failed to defend the action judgment, as claimed in the
summons, may be given against them. Neither
of them heeded the
warning.
[6]
As neither of them had delivered any notice of intention to challenge
the Bank's claim, the Bank felt entitled, on 18 July 2007,
to
approach the registrar of this Court for judgment against both of
them as claimed in the summons. Rule 31(5)(a) of the Rules
of this
Court provided, as at 18 July 2007, as follows:
"Whenever
a defendant is in default of delivery of a notice of intention to
defend or of a plea, the plaintiff, if he or she
wishes to obtain
judgment by default, shall, where each of the claims is for a
debt
or liquidated demand,
file with the registrar
a
written a
p
plication
for
judgment
a
gainst such
defendant:.............
"
As
at 18 July 2007 it was a correct procedure for any party that sought
payment of a debt or liquidated amount from another to approach
the
registrar to grant judgment to such party if the other party had not
like in case number 265057/07, delivered any notice of
intention to
defend after being served with a copy of the summons. As at 18 July
2007, the registrar of court had the authority
to grant such relief.
Acting in terms of Rule 31(5)(b) as it then, and still does, provided
that the registrar may:
"(i)
grant judgment as requested.
"
The
purpose at the time of Rule 31(5)(a) was to take the burden off the
Judges' shoulders by authorising and empowering the registrar
to
grant judgments in certain matters including this one. A matter could
only be referred to an open court in the event of the
registrar
having doubts about his authority to grant the default judgment. The
need to do so fell away once the registrar was satisfied
about his
authority and powers to do so.
[7]
On 18 July 2007 the registrar of this Court, acting in terms of Rule
31(5)(b) granted a judgment by default against both Motsepe
and the
First Defendant as claimed in the simple summons. It is this default
judgment that is the target of the application for
rescission. It is
this default judgment that Motsepe alone is disgruntled with and for
which she now seeks an order to set aside.
Simultaneously with the
granting of the default judgment, the registrar also declared the
property specially executable. Sooner
thereafter the registrar
authorised the issue of a writ of execution which led to the
attachment in execution of the property.
In the alternative Motsepe
seeks an order of rescission of the relevant declaration that the
property was specially executable.
[8]
In challenging the said default judgment Motsepe has brought an
application in terms of Rule 42(1) of the Uniform Rules of Court.
According to her founding affidavit there is only one ground on the
basis of which the rescission of the judgment is sought in
terms of
the notice of motion. That ground is that the relevant default
judgment was granted by the registrar of this Court in
circumstances
other than in an open Court. She also challenges the declaration by
the registrar that the property was specially
executable. Rule 42(1)
contains several grounds on the basis of which orders and judgments
may be rescinded or varied. It provides
as follows:
"1.
The Court may, in addition to any
other powers it may have, meromotuor
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 party affected thereby;
(b)
an order o
r
judgment in which there is
ambigui
t
y, or a
patent error or omission,
but only
to
the
extent
of
such
ambiguity,
error
or
omission;
(c)
an order or judgment granted as a result of a mistake common
to the parties."
[9]
An order is erroneously sought and erroneously granted if there was,
as an example, no proper service of a copy of the legal
proceedings
on the absent party. Regardless of whether it was correct an order or
judgment granted where there there was no service
of a copy of the
legal proceedings on the party that was not before court at the
granting of the default judgment, is liable to
be set aside in terms
of Rule 42. A party against whom relief is sought must be notified of
any legal proceedings against him or
her so as to afford him or her
an opportunity to challenge such proceedings. As far as the action
against Motsepe and the First
Defendant was concerned, there was
proper service of copies of the simple summons on both of them.
[10]
Furthermore judgment will be deemed to be erroneously sought and
erroneously granted where the attorney has failed to carry
out the
client's instructions or where it was granted on a summons that did
not disclose any cause of action. Over and above such
an order or
judgment may be rescinded where the attorney to a consent order did
not have the authority to agree to such an order.
An order is
erroneously sought and erroneously granted if it was legally
incompetent for the Court to grant it; or if there was
an
irregularity in the proceedings or if the Court was unaware of the
facts, if known to it, would have precluded it, from a procedural
point of view, of making the order challenged. If procedurally a
party is entitled to judgment it cannot be said that the judgment
had
been granted erroneously because the Court was unaware of the defence
which an applicant could have raised.
[11]
In her founding affidavit, Motsepe admitted breach of the credit
agreement read with the mortgage bond. Accordingly, the Bank
was
entitled to enforce its rights in terms of such credit agreement and
such mortgage bond. As I understand it. it is not Motsepe's
case that
Rule 35(1)(b) was invalid at the time the impugned judgment was
granted and declaration made. While the court accepts
that under
certain circumstances the registrar has a discretion to refer a
matter to an open court, the question is whether the
registrar
exercised his discretion property when he decided that he himself
would grant the judgment. It is not for this court
to substitute its
discretion for that of the registrar. This court will only interfere
with the judgment or discretion of the registrar
if he has erred. In
order to succeed on this point the applicant would have to satisfy
this court that the registrar should have
had a doubt and that
because of that doubt he should have considered sending the matter to
the open court. In granting the judgment
as he did the registrar was
merely exercising the authority and powers granted to him at the time
by the Rules of Court. The invalidity
or irregularity of a conduct is
determined according the empowering legislation or rule that was in
force at the time of performance.
The aforegoing expositon, in my
view, answers the question whether the registrar should have referred
the bank's application for
default judgment to the open court.
[12]
Motsepe and the First defendant were married to each other in
community of property. For that reason they were jointly and
severally liable to the Bank for the monies that the Bank had loaned
and advanced to them. The fact that they were divorced and
that at
the termination of their marriage by a court they entered into a
settlement agreement in terms of which Motsepe took the
sole
responsibility to pay the outstanding balance of the mortgage bond
was of no consequence to the Bank or their joint liability
to repay
the loan or to comply with the terms of the mortgage bond and any
credit agreement they had concluded with the Bank. The
Bank was not a
party to the said settlement agreement, has not agreed to be bound by
it and for those reasons the settlement agreement
does not bind it.
[13]
The default judgment that Motsepe seeks to rescind and to have set
aside was obtained under case number 26057/07 of the then
Transvaal
Provincial Division, now known as the Gauteng Division of the High
Court of South Africa. It was expected of the attorneys
who launched
these rescission proceedings on behalf of Motsepe that, in all the
matters relating to the said case, including this
application for
rescission, they would bring them under the same case number. This is
a well-known convention which the attorneys
know or should have
known. The application for rescission was, for inexplicable reasons,
brought under case number 19618/15. The
Bank has complained about
that procedure and the Court has noted not only the Bank's complaint
but also the source of the complaint.
The Court would want to believe
that Motsepe would have dealt with this complaint in her replying
affidavit but she has failed
to do so. In his or her heads of
argument Katlego Mahlase down played this irregularity by stating
that nothing turned on it. He
or she is saying that attorneys may
flout the Rules of this court as long as nothing turns on it. In
paragraph 17 of the same Gundwana
the court had this to say:
"It
has become a disturbing feature of litigation in this Court that its
rules of practice and procedure are not meticulously
adhered to by
its litigants. This must stop."
[14]
In attacking the default judgment, Mr Jansen relied on what he called
several irregularities in the procedure that the respondent
followed
in its attempt to enforce the terms of the mortgage bond. He had not
crafted any heads of argument and for his argument
relied entirely on
the heads of argument drawn by the said Katlego Mahlase. In the first
instance he argued that in commencing
its litigation against the
applicant and the First Defendant, the Bank failed to comply with the
provisions of s 129 of the National
Credit Act 34 of 2005 ("the
NCA"). There was immediately an objection by Mr Minnaar against
the point taken by M. Jansen
on the said s 129 of the NCA. I
ruled that I would allow argument on that matter and promised to give
reasons with the judgment.
Mr Jansen then referred to what he called
the second irregularity in respect of which he argued that the
Respondent had chosen
to use a simple summons to enforce its rights.
He developed his argument and contended that the position was that
copies of the
mortgage bond and the credit agreement were not
attached to the summons as required by Rule 17(2) and Form 9. Rule
17(2) provides
that:
"(a)
In every case where the claim is not for a debt or liquidated
demand the summons shall be as near
as may
be
in
accordance
with Form 10 of the
First
Schedule to
which summons
shall be annexed a statement
of the material
facts relied upon by
the Plaintiff in support of
his cla
i
m,
which statement shall,
inter alia,
co
m
ply
with Rule
1
8
.
(b)
In every case where the claim is for a debt or liquidated
demand the
summons shall be as
near
as may
be
in
accordance
with
Form 9
of
the
first
schedule.
"
[15]
These points that Mr Jansen considered as irregularities that the
Bank had committed and on the basis of which he sought, on
behalf of
the applicant, rescission of the default judgment may not be
considered at this stage because they were never raised
in her
founding affidavit. The general rule is that the applicant must make
out his or her case in the founding affidavit. In
this regard
see the Director of Hospital Services v Misty 1979(1) SA 6269 (A).
An applicant must make a
prima
facie
case in the founding affidavit. She or he must set forth
the facts necessary to establish her or his
prima
facie
case in a complete manner as the circumstances or his or her case
may demand. Accordingly, an applicant stands or falls by his or
her
founding affidavit.
"When,
as
in
this
case,
the proceedings are
launched
b
y
w
a
y
of a
notice
of
motion,
it
is
the founding affidavit which
a Judge will look to determine
what the complaint is.
As
was
pointed out
by KRAUSE J in
Pountas' Trustee vs Lahamas 1924 WLD at 68 and as has
been said in many other cases:
"
...an Applicant must stand or fall by his petition and the facts
alleged therein and that, although sometimes it is permissible
to
supplement the allegations contained in the petition, still the main
foundation of the application is the a/legation of facts stated
therein, because those are the facts
which the
Respondent is called upon either to affirm or deny.
"
[16]
It is the principle of our law that a judicial officer in civil
proceedings must resolve the disputes between the parties on
issues
raised by the parties and confine the enquiry to the facts which the
parties have placed before Court. A judicial
officer shall not,
in resolving a dispute, have regard to extraneous issues or unproved
facts. The issues raised in the heads of
argument have not been
property raised. Such issues are regarded as extraneous or unproved
facts. By raising the aforegoing issues
in his heads of argument the
applicant's counsel wanted the Court to decide the disputes in this
application on issues which were
not raised in the founding
affidavit. When Mr Minnaar objected to Mr Jansen arguing issues not
raised in the founding affidavit,
Mr Jansen took the view that it did
not mean that the Court could not ignore the irregularity he pointed
out. Mr Jansen should
have known that if you want to raise a point
you must do so in an affidavit and not in your heads of argument. A
party must be
given an opportunity to agree or disagree with the
contents of its opponent's affidavit. Allegations referring to the
irregularities
should have been contained in the founding affidavit.
His argument that the court could not ignore what he called an
irregularity
raised in the heads of argument was in my view flawed.
[17]
Motsepe has raised three more new points in her replying affidavit.
Firstly, she stated that she was not personally served
with a copy of
the summons; secondly, that she was never warned of her
Constitutional rights in terms of s 26 of the Constitution;
and
thirdly and lastly she alleged, for the first time, that the Bank
claimed payment in terms of a written agreement but failed
to attach
copies of the written agreement and mortgage bond to the simple
summons. It will be recalled that the last of the three
was another
point that Mr Jansen regarded as an irregularity. Again these points
were not raised in the founding affidavit. ''lt
is not permissible
to make out new grounds for the application in the
reply
i
n
g affidavit."
See
in this regard the case of Director of Hospital Services v Misty
supra at page 636 paragraph a-b. This court finds that Motsepe
was
property served with a copy of the simple summons. She was insincere
when she testified that she had not been served. Again
her attention
was indeed drawn in the simple summons to the provisions of s 26 of
the Constitution.
[18]
Counsel for the applicant referred the Court to the cases of First
National Bank Ltd v Sonja Alfrede Charlotte Hardijzer, case
number
08/47568 by BAQWA J; Blue Chip 2 (Pty) Ltd t/a Blue Chip 49 vCedric
Dean Ryneveldt and 26 Others; and National Credit Regulator
Appeal
Number 82A233/2014, a decision of the Free State Division and
Standard Bank of South Africa Ltd vAbduraouf Dawood Case Number
15438/11. The court found these cases to be unhelpful to the
resolution of the fundamental points raised in this matter. The
question
being whether or not the applicant has made the necessary
allegations in her founding affidavit, the cases that the applicant's
counsel relied on did not pertinently address that issue. Accordingly
they offer no solution to the dispute at hand.
[19]
Again in the applicant's counsel's heads of argument the court was
referred to the authority of Gundwana v Steko Developments
supra.
This was in respect of a submission that the registrar should
have referred the Bank's application for default judgment to the open
court so that a Judge could look into the personal and pertinent
aspects of the matter before deciding whether to grant a judgment
or
not in favour of the plaintiff. In paragraph 55 thereof the
Court had the following to say:
"In
view of a conclusion that, to the extent that the High Court Rules
and Practice allow a registrar to grant the orders declaring
immovable property that is person's home executable, they are
constitutionally invalid, a declaratory order to that effect must
be
made."A declaratory order to that effect was made by the court
in paragraph 65(b) of the said authority
[20]
The authority of Gundwana was not the law on 18 July 2007 when
the registrar, acting in terms of the provisions of Rule
31(5),
granted a default judgment and when he subsequently made a
declaration that the property was executable. Secondly, it does
not
apply retrospectively. This is clear from paragraph [58] thereof
which states as follows:
"There
may be a fear that the decision in this matter would lead to large
scale- legal uncertainty about its effects on past
matters where
homes were declared specially executable by the registrar, and sales
in execution and transfers followed. The experience
following JAFTHA
may be an indication that this fear is overstated. It must be
remembered that these orders were issued only where
default judgments
were granted by the registrar. In order to turn the clock back in
these cases, aggrieved debtors will first have
to apply for original
default judgment to be set aside. In other words, the mere
constitutional invalidity of the rule under which
the property was
declared executable is not sufficient to undo everything that
followed. In order to do so the debtors will have
to explain the
reasons for not bringing a rescission application earlier and they
will have to set out defence to the claim for
judgment against them.
It may be that in many cases those aggrieved may find the
requirements difficult to fulfil''.
The
said authority made it clear that the order it made in paragraph
65(b) did not apply to past orders made by the registrar and
that the
aggrieved parties would have to apply for a rescission.
[21]
In summary, the legal principles laid down in Gwundana's case are
that
21.
1
the declaration that it is unconstitutional for the
registrar of a High Court to declare immovable property specially
executable
when ordering default judgment under rule number 31(5)) of
the Uniform Rules of Court, to the extent that it permits the sale in
execution of the home of a person is not retrospective;
21.2
the declaration in 21.1
supra
applies where the
default judgment was granted by the registrar;
21.3
the said default judgment may be set aside on application by the
aggrieved party;
21.4
the aggrieved party's application to set aside such a default
judgment is not there for the taking. The aggrieved
party must still:
21.4.1
explain the delay, where it existed, in bringing the application for
rescission;
21.4.2
still set out his defence to the claim for judgment to show the court
that she has a bona fide defence
and that the application for
rescission was not made merely with the intention to frustrate or
delay the Bank's claim.
21.4.3
where he or she seeks to set aside the default judgment and the
execution order
granted against him or her by the registrar shall
show, in addition to the normal requirements for rescission, that a
court, with
full knowledge of all the relevant facts existing at the
time of granting of the judgment, would nevertheless have refused
leave
to execution against specially hypothecated property that is
the debtor's home.
[22]
The declaration relates only to the order declaring immovable
property especially executable when granting default judgment.
It
does not take away the registrar's powers and authority to grant
default judgment and thereafter to declare a certain property
specially executable as long as such property is not a person's home.
An immovable property belonging to a legal person may still
be
specially declared executable by the registrar acting in terms of
Rule 31(5).
[23]
I now turn to the current application. It is common cause between the
parties that the default judgement and the order declaring
the
property in question executable were granted by the registrar. For
the aforegoing reason both the default judgment and the
resultant
order are subject to be set aside on application by the applicant as
the aggrieved party. Before this court is such an
application. The
question now is whether the applicant has complied with the
requirements set out in Gwundana for setting aside
of the default and
the declaration of the property especially executable? Answer is
negative.
23.1
firstly, the applicant has not explained the delay in bringing this
application for rescission. She has failed
to give this Court a
reasonable explanation why it took 7 to 8 years to apply for
rescission of the default judgment. An application
in terms of Rule
42 must be brought within a reasonable time. In my view, the
interval that it took Motsepe from
the date on which she
became aware of the default judgment to the date on which she
launched this application was unreasonably
long. There was an
unexplained and inordinate delay to bring the application. The
founding affidavit does not explain pertinently
what took Motsepe so
long to do so.
23.2
the applicant has failed to set out her defence against the
respondent's claim for judgment. On the contrary
she has admitted
that she and the first defendant failed to comply with the terms of
the mortgage bond and the credit agreement.
[24]
Finally there is another hurdle that the Applicant has to cross over.
I have dealt with this matter in the preceding
paragraphs. The
judgment was granted against both the Motsepe and the First
Defendant. The First Defendant has not applied for
rescission of the
said judgment. The default judgment and the declaration that the
property was especially executable would remain
valid as against the
First Defendant even if Motsepe succeeded with her application for
rescission. The Bank would be entitled
to execute the judgment in
respect of the First Defendant. Quite clearly she would be in a
sticky situation.
[25]
In my view the applicant has not made out a good case for the relief
she seeks in the notice of motion. The application cannot
succeed.
Accordingly,
I make the following order:
1.
The application for rescission, as well as for the relief sought in
the alternative, is hereby dismissed with
costs.
__________________________
P.M.
MABUSE
JUDGE
OF THE HIGH COURT
Appearances:
Counsel
for the applicant:
Adv.GF Jansen
Instructed
by:
MagezaRaffee Mokoena Inc
c/o Du Plessis
enKruyshaar Inc
Counsel
for the respondent: Adv.J Minnaar
Instructed
by:
Hammond Pole MajolaAttomeys
c/o Oltmans Attorneys
Date
Heard:
7June 2016
Date
of Judgment:
4 October 2016