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[2015] ZAGPPHC 461
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Masondo and Another v Nedbank Ltd (1824/14) [2015] ZAGPPHC 461 (19 June 2015)
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Certain
personal/private details of parties or witnesses have been
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IN THE HIGH
COURT OF SOUTH
AFRICA
(GAUTENG
DIVISION,
PRETORIA)
CASE NO: 18241/14
IN THE MATTER BETWEEN
SODUMO
MASONDO
First Applicant
THANDIWE
SHIRLEY
NDLOVU
Second Applicant
and
NEDBANK
LTD
Respondent
JUDGMENT
LEGODI
J
[1] Before me there are two applications. The first one is an
application for eviction against the respondents (Sodumo Masondo
and
Thandiwe Shirley Ndlovu) who had failed to perform in accordance with
Mortgage Loan agreement. The second application is for
the rescission
of default judgment obtained by Nedbank Ltd (the respondent in the
rescission application) against the applicants.
[2] For convenience, the parties will be referred to as in the main
action, that is, Nedbank Ltd as the Plaintiff and the other
parties
as the first and second defendants respectively. I prefer to start
with the application for rescission of the default judgment
as any
finding in favour of the defendants, might have a bearing on the
application for eviction.
[3] As a brief background, on 18 April 2010, the plaintiff issued
summons against the defendants, which was allegedly served by
affixing at the
domicillium citandi
at [……..],
Rooihuiskraal. The defendants contend that they have never received
the summons and that the sheriff could
never have affixed the summons
to the principal door of the property regard been had to the
following allegations and challenges
made in paragraphs 6 and 7 of
the founding affidavit:
3.1
In order for the sheriff to affix summons
on the principal door, he
had to gain first entrance into the premises area by passing through
the security gate of the said
domiciliam citandi et excutande;
3.2
There is also an intercom facility in which
for one to gain access,
they had to communicate to a person present at the house before they
can be allowed access;
3.3
Furthermore, that at the time of the alleged
affixing of the summons,
there was an assistant working at the premises and that she indicated
that no one came and left the summons
at the main door.
3.4
Lastly, there were two dogs which were
guarding the yard and the
sheriff would have required the services of a person to whom the dogs
were used.
[4] Before the issuing of the summons and the alleged service of the
summons by affixing, the first defendant had agreed with the
plaintiff that for any written communications between the parties,
the address: [……….] IN KWAZULU - NATAL
must be
used. This was in line with clause 18.2 of the loan agreement which
provides that either party, to the agreement may change
the address
by delivering to the other party a written notice of the new address
by hand, registered mail or electronic mail, if
that other party has
provided an email address. The first defendant has attached to his
founding affidavit, a letter of demand
dated the 2 October 2009 in
terms of which the plaintiff used the Gator Manor address. Based on
this, the first defendant contended
that the plaintiff knew which
address to use to send whatever communication it needed to convey to
the defendants. However, the
plaintiff sent both the letter of 2
October 2009 bearing Gator Manor address and the summons at [………],
Rooihuskraal,
Gauteng Province.
[5] Two issues are raised by the nature of the dispute outlined
above. That is, whether there has been proper service of section
129
of the National Credit Act and the summons. I deal later with the
alternative defence to this.
SECTION 129 NOTICE
[6]
In paragraph 12 of the founding affidavit, the first defendant
stated:
"I
have already indicated that the respondent
sent
a
letter to me dated 2 October 2009
which
is
marked
Annexure "SM1".
Subsequently
I
received
that letter somewhere
around the second
week
of March 2
006. The second
page
of
the letter
has
registered
post slip
which
bears
the
post office
stamp
and
this
is indicated of the time
frame I could have received the letter''.
[7] The notice in terms of section 129 came to the attention of the
first defendant before the issuing of summons and judgment
was
obtained thereafter. That in my view, destroys any defence, the first
defendant might have had regarding section 129 notice.
SERVICE OF SUMMONS
[8]
Clause 18.1 of the loan agreement provides as follows:
"18.1
Whenever
a
party
to
this
agreement
is
required
or
willing
to
give
legal
notice to the other party for any purpose
contemplated
in this
judgment,
the Act or any
other law, the
party giving notice must deliver that
notice to the other party at the address of the other party as set
out in clause 2 of this
agreement or at the address most recently
provided by the recipient in accordance with
clause
18.1
".
[9] There are two addresses mentioned in clause 1. In clause 2.2.3 of
the agreement, the address of the "client" i.e.
the first
defendant is recorded as:
“
[……….]"
Then in clause 2.2.10 the address of the property is recorded as:
"[……….]”
[10] Neither of the address can be construed as "the address
recently provided" by the first defendant, nor can it be
said
that the first defendant complied with the provisions of clause 18.2
which provides that either party to the agreement may
change its
address for the purposes of clause 18 by delivering to the other
party a written notice of the new address by hand,
registered mail or
electronic mail, if that other party has provided an email address.
The change of new address must be in writing
and that is not what
happened in this case. Both addresses are recorded in clause 2 and
the plaintiff elected to use Rooihuiskraal
address for service of the
summons and I can find nothing wrong with this.
WHETHER
THE
SUMMONS
WAS
PROPERLY
SERVED?
[11] The sheriff in this case did not file a supporting affidavit to
deal with the challenge and allegations made by the first
defendant
as indicated in paragraph 3 of this judgment. The challenge is
vaguely dealt with in the answering affidavit as follows:
"6.1 The
Respondent's
summons was in fact served on the First Applicant at [...........],
Rooihuiskraal, by the Sheriff affixing the
summons to
the principal
door,
and
was
in
fact
served
on
the
second
applicant
at
[……..], Redgeview,
Cato Manor,
Durban, by affixing
a
copy to the
main
entrance
and
the Applicant's
allegations
to
the
contrary are
d
enied.
[My emphasis].
[12] It is not enough to deny the allegations in paragraphs 6 to 7 of
the founding affidavit summed up in paragraph 3 above without
filing
a supporting affidavit by the sheriff. In paragraph 9 of the founding
affidavit, the first defendant pleads as follows:
"In
the light
of
the above
I
can confirm
to the Honourable
court
that
I have
not have not
(sic) at any point
in
that after
the purported
service
had
a
copy
of the summons and
should
I
had
them
I
would
have
approached
an
attorney
for assistance".
[13] I must say, experience had shown that service by affixing can
sometimes be abused and when a red light is raised, it is incumbent
on the court, to be cautious in accepting such service as a proper
service. Failure to file the supporting affidavit of the sheriff
on
the challenge and allegations made, is in my view, fatal. Just on
this point alone, rescission of judgment ought to be granted.
It is
because of the serious nature of the allegations made against the
sheriff, which allegations are not refuted, that I am unwilling
to
condone any such conduct as alluded to by the first defendant. I now
turn to deal with another issue
NOVATION
[14] On the 20 April 2015 this matter was laid before me in the
unopposed motion roll. I made an order to the effect that the
plaintiff files a supplementary affidavit to the defence of novation
raised in the replying affidavit as follows:
"23.
Novation
of
the original loan agreement
23.1
The respondent
and
I
entered
into
a
Distressed
Restructure
Agreement
.
This agreement
amended
the original loan
agreement.
It is
important
to
note
that
the Distressed
Restructure
Agreement
was
entered
into on
the
25th
August 2011.
23.2
It is
further important to note that the default
judgment
was
granted on the 05
1
h
October
2010. It
i
s
further
important
to
note
that
the property
was
attached
on the
15th February
2011.
By entering into a new agreement with me,
the respondent represented
to me that our
relationship
will from then
onward
be
governed
by
the
new
agreement, namely,
Distressed
Restructure
Agreement.
23.3
In terms of the Distressed Restructure Agreement, the
respondent was not entitled
to fall
back
on
the benefits
of
the
original
loan
agreement
in
the event of default under Distressed Restructure Agreement.
The terms and conditions
of
the
Distressed
Restructure
Agreement
imply
that
the respondent
has
waived
its
right
to
the judgment obtained.
This is
son, when
clause 19
and
21
of
the
Distressed Restructure
Agreement are properly
considered.
23.4
I own substantial movable
assets.
This constitutes mostly of furniture and household goods.
The realization
of these assets would have been
close to
sufficient to
satisfying th
e
judgment debt."
[15] I do not intend to waste much time on this defence. Clause 19.1
of the loan agreement provides as follows:
"19.1
Should
the
Client
breach
any
condition
contained
in
this
Agreement, or should the
Client breach a condition of any other agreement with Nedbank (which
breach shall constitute a breach of
this Agreement), Nedbank
will
have
the right,
to the
extent permitted
by
the Act,
to
claim repayment
of
the Loan
or the balance thereof outstanding which will thereupon become
immediately due and payable,
together with interest and
all other amounts owing to or claimable by Nedbank in terms of this
Agreement,
and to have the
Property
declared
executable''.
[16] The plaintiff in its supplementary affidavit dealt with clause
19 as follows:
"10.
7
Clause
19 of the ORA deals with default by the First
Applicant
in terms of
the ORA, and in
particular
clause
19.1
provides
for immediate repayment by
the
First
Applicant of
the
balance
outstanding
in
the
event
of
non payment
by
the
First Applicant. Clause
21
of
the
ORA provides
for
the debt
enforcement procedure as envisaged in terms of section 129
and
130 of the NGA, in respect of the ORA.
10.8
Neither clause
19 nor clause 21 of the ORA in
their terms effect any prior judgment
granted against
the First Applicant or the Second Applicant, and neither these terms
nor any other terms of the ORA are such that
it can be inferred
that the Respondent
has
waived
the default
judgment
and
attachment of the
immovable property that had already
taken
place.
10.9
There
is
no
conduct on the part of the Respondent,
whether in the
form of the conclusion of the ORA or otherwise,
from
which it can be inferred that the
Respondent waived
its
rights
in
regard
to
the judgment by
it
or
in regard to the attachment of the
immovable
property.
10.10
It
is
common cause that the First Applicant
default
in his obligations to the Respondent
in terms of the
ORA and in particular
that he failed
to
make payments
in
terms of the ORA and
only
made a payment
of R30 000,00 on 4
June 2013.
10.11
Thus,
the
Respondent
was
entitled
to proceed
to
execute
its
judgment already
obtained prior
to the
ORA and to proceed
to execute against
the
immovable property already attached prior to the
ORA".
[17] I cannot agree more with what is stated above and therefore a
defence of novation and or waiver ought to be rejected. I now
turn to
deal with the application for eviction.
EVICTION
[18] Judgment by default was granted on the 5 October 2010 by the
Registrar in terms of which the property in question was declared
especially executable.
[19] In
Gundwana v Skelo Development
CC
and Others
2011 SA 608
(CC) the court declared the Uniform Rules and
practice to the extent that they allow the Registrar to grant orders
declaring immovable
property that is a person's home executable, to
be constitutionally invalid. The court considered also prospective
and retrospective
effect of such orders. It was held that declaration
of invalidity of the legislative provisions did not entail that all
transfers
made subsequent to invalid execution sales were
automatically invalid. Individual persons affected by the ruling
still needed to
approach the courts to have the sales and transfers
set aside if granted by default. In order
to
turn the clock
back in these cases, aggrieved debtors will first have to apply for
the original default judgment to be set aside.
The mere
constitutional invalidity of the rule under which the property was
declared executable is not sufficient to undo everything
that
followed. It was further held that the aggrieved debtors who seek to
set aside past default judgment and execution orders
granted against
them of the Registrar, must also show in addition to the normal
requirements for rescission that a court with the
full knowledge of
the relevant facts existing at the time of granting default judgment,
would nevertheless have refused leave to
execute against specially
hypothecated property that is the debtor's home.
[20] In other words judicial oversight is required when dealing with
specially hypothecated property that is the debtor's home.
In
paragraph 3 of this judgment I dealt with the challenge by the first
defendant to the service of the summons. Furthermore in
paragraphs 11
to
13 above, I dealt with service of the summons and in
particular whether they were properly served. I do not intend to
repeat what
has already been said in the aforementioned paragraphs.
It suffices to state that, had the Registrar or the court have the
full
knowledge of all the relevant facts existing at the time of
granting of the default judgment, would nevertheless have refused to
execute specially against hypothecated property in question.
[21] There are other factors which have been set out by the first
defendant in resisting the eviction as follows:
"11.
The first respondent had been staying in that premises for more
than three years and the applicant had only given the first
respondent
30 days to vacate the premises.
12.
REASONS WHY
EVICTION SHOULD
NOT
BE GRANTED
(i)
I
am
currently
staying
in
this
property
in
issue
with
my
wife
and
three minor
children.
(ii)
All my children go to school in Centurion.
(iii)
It
will not
be just and
equitable
that
the
children
be
evicted
from
the property
as
it is near their schools.
(iv)
It
would be
very prejudicial
for
all
my
children
to be evicted
here
as
this would
affect their schooling and it would not be in the
interest
of
justice.
(v)
The other reason is based in the rescission
that
I have made and I attach the copy
hereof
as
annexure
"JM?" the
contents
thereof
must
be incorporated
herein.
(vi)
The
Act also requires that the applicant find
a
suitable accommodation for the respondent and in
this instance the applicant has done
so".
[22] In paragraphs
24 and 25 of the
rep
l
ying
affidavit
in the
rescission application,
the first defendant
states as follows:
"24.
I own substantial movable assets. This
constitutes mostly of furniture and household goods. The
realization of these assets would have been close to
sufficient to
satisfy th
e
judgment
debt.
25.
I
was
and
still
am
employed
and
earning
a
salary.
If
these
was
any
shortfall on the realization of the movable assets, I would
have been able to
make
the
necessary
arrangement
to
pay
off
that
short
fall.
Had
the
known
of
these
facts
at the
time
the
default
was
granted, it would nevertheless have
refused
to order
mv
home
specially
e
xecutable".
[The
underlining my emphasis].
[23] I tend to agree with the latter statement quoted above. The
default judgment granted against the first defendant did not enjoy
judicial oversight. It was granted by the Registrar and I want to
believe that if he or she was aware of the challenge to the service
of the summons and other personal factors alluded
to
in the
preceding paragraphs, he or she would not have granted the default
judgment and based on the same facts, eviction order cannot
be
granted.
[24] Consequently an order is hereby made as follows:
1. Condonation for the late filing of
the application for rescission of judgment is hereby granted.
2. The judgment granted by
default by the Registrar of this Court on 5 October 2010 is hereby
rescinded and set aside.
3.
The plaintiff to pay the costs of the application.
4. Application for eviction is
hereby dismissed with costs.
______________
M F (EGODI
JUDGE OF THE
HIGH COURT
FOR
THE APPLICANTS:
VICTOR MABE INC.
Mabe Law Chambers
545 Begemann Street Elloffsdal, PRETORIA
TEL:
012 335 4455
REF: VPM/CIV/masndl/15
FOR
THE RESPONDENT:
LEVINE AND FREEMAN ATTORNEYS
C/O CHRISTO BEKKER INC.
No 43, 13
th
Avenue, MENLO PARK
REF: ANDRI DU TOIT/EVIC0011