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[2015] ZAGPPHC 781
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Badela v FirstRand Bank Limited and Others (30497/12) [2015] ZAGPPHC 781 (11 August 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
NUMBER: 30497/12
DATE:
11 Aug 2015
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
MBELELO
BADELA Applicant
v
FIRSTRAND
BANK
LIMITED
First Respondent
LIZELLE
SUSAN
STRAUSS
Second Respondent
THE
SHERIFF JOHANNESBURG
NORTH
First Respondent
THE
REGISTRAR OF DEEDS,
JOHANNESBURG Second
Respondent
JUDGMENT
MABUSE
J:
[1]
On 30 July 2012 this Court granted default judgment against
the applicant in favour of the respondent. The judgment was
for
payment of a sum of R565,058.69 and, apart for an order of costs,
also for a declaration that a certain immovable property
("the
property") belonging to the applicant specially executable.
[2]
The applicant describes himself as a major male businessman who
resides at [.....], Doornkop, Soweto. According to the applicant
the
purpose of this application is twofold. The first purpose of this
application is to set aside the aforementioned judgment and
secondly
to set aside the subsequent sale in execution of the said property.
[3]
The applicant seeks rescission of the aforementioned judgment on two
grounds, firstly, that it was erroneously granted as contemplated
by
Rule 42 of the Uniform Rules of Court. In the alternative it is
contended by the applicant that the application is brought on
the
foundation that good cause exists on the basis of which the judgment
could be assailed. He contends, in respect of these grounds,
that he
was not in wilful default in defending the first respondent's action
and furthermore that he has a
bona fide
defence.
[4]
In addition he seeks an order setting aside the aforementioned sale
in execution. He contends that the attachment and subsequent
sale of
the said property are null and void as they were followed on an
invalid judgment. He seeks in effect an order in terms
of which the
said property is de-registered from the second respondent's name and
re-registered in his names.
[5]
The application is opposed on such grounds as are set out in the
first respondent's answering affidavit and to which I will
in due
course refer. The orders sought are strictly speaking sought against
both the first and second respondents. Notwithstanding
the relief
sought in respect of the property, the second respondent has not
filed any papers. This seems to be so as a result of
the applicant's
failure to serve a copy of the application on the second respondent.
I have not seen any proof in the papers of
any proof of service of
the application on the second respondent nor has there been any
explanation by the applicant as to whether
there has been service of
the application on the second respondent. Equally I was not able to
establish from the papers that copies
of the application were served
on the third and fourth respondent. The fact that it was contended
that no specific order against
them did not relieve the applicant to
serve copies of the application on them.
[6]
The applicant has set out the facts of the matter as follows.
By a financial loan of R522 000.00 ("the
loan") which he
had obtained from the first respondent, the applicant had purchased
the property. The loan was secured by
a mortgage bond. While the
property was registered in the names of the applicant, a mortgage
bond was registered over the property
in favour of the first
respondent. The first respondent had granted the applicant the said
loan on certain terms and conditions.
The terms and conditions of the
loan agreement which are relevant for the purposes of this
application were as follows:
6.1
that the said loan was refundable by the applicant to the first
respondent in monthly instalments of R4679.80
("the
instalment");
6.2
that failure by the applicant to pay any instalment or any amount in
respect of his liability would be regarded
as the default;
6.3
that in the event of the applicant defaulting the first respondent
would be obliged to send him a written
notice in which he would
demand that the applicant should remedy or cure the default within
ten days of such notice;
6.4
that in the event of the applicant failing to remedy the default the
first respondent would, as it chose,
claim immediate payment of the
full outstanding balance of the loan. The first respondent would also
be entitled to sue for an
order declaring the property executable;
and,
6.5
lastly that the applicant had chosen the address [.....], Houghton
Estate as the address where all the
legal proceedings with regard to
the loan should be served.
[7]
The applicant states that after the sale of the property to him and
the grant of the loan to him by the first respondent and
even after
the property had been registered in his names, he did not reside at
the property. In terms of an oral agreement that
he had concluded
with one Dumile Robert Badela, his brother, he had rented the
property to him. Furthermore, in terms of the said
oral lease
agreement, he and his brother had agreed that his brother should pay
the levies and the instalments in terms of the
loan agreement that he
himself had with the first respondent. His brother stayed in the
property from 2 December 2009 up to 30
March 2013.
[8]
The applicant has raised a number of reasons why the judgment should
be rescinded. Firstly, he contends that the amount of R565,058.68
claimed by the first respondent is incorrect; secondly that he was
unaware that his brother failed to pay the monthly instalments
due in
terms of the loan agreement; thirdly that he was unaware of the first
respondent's action against him until several months
after judgment
had been granted against him; fourthly that there was no proper
service of the papers relating to the action
that resulted in the
impugned judgment on him and; sixthly, that at the time the
proceedings were instituted by the first respondent
against him the
first respondent did not have a claim for the full amount outstanding
on the home bond.
[9]
As correctly pointed out by Mr. Pool
in his heads of argument, in terms of
our
law, an application for rescission of a judgment may be brought
in one of the following three ways:
11.1
in terms of common law;
11.2
in terms of Rule 31(2)(b); and,
11.3
in terms of Rule 42.
This
judgment is not designed to be a treatise on all the
aforementioned three ways. On the contrary it is designed to deal
with the manner in which the applicant contends he brought this
application.
[10]
It will be recalled that the applicant asserted in his founding
affidavit that he brought thisapplication
for rescission
of the judgment in terms of Rule 42 or in the alternative that
there is good cause to rescind the judgment.
Rule 31(2)
(b) provides as follows:
"A
defendant m
a
y,
with
i
n
20
d
a
ys after he or she has the knowledge
of such judgment
a
pply
to
Court
u
pon
notice
to
t
he
plaintiff
to
set
aside
such judgment
and
t
he
Court m
a
y,
upon
good
cause
shown, set
a
side
t
he judgment
on
such
t
e
rms
a
s
to
it
seems
meet.
"
Rule
31(2) (b) is employed to set aside default judgments granted in terms
of Rule 31(2) (a). It is evident that, based on the allegations
contained in the founding affidavit, this application is brought in
terms of Rule 31(2) (b) and neither in terms of Rule 42 nor
in terms
of common law. Applications in terms of Rule 42 can only be brought
in order to set aside or vary; (a) an order or judgment
erroneously
sought or erroneously granted in the absence of any other party
affected thereby; (b) an order which is ambiguous,
or contains a
clear error or omission; (c) an order or judgment granted by the
court following a common mistake to the parties.
The purpose of Rule
42 clearly is to correct obviously wrong judgments or orders. The
judgment granted by the Court on 30 July
2012 against the applicant
in his absence and in favour of the first respondent is not such a
judgment. It cannot be said to have
been granted by error. In his
heads of argument Mr Pool referred the Court to the case of Lodhi 2
Properties Investments CC v.
Bondev Developments (Pty) Ltd 20070(6}
S.A. (SCA) at p. 950-E and submitted that a judgment to which a
Plaintiff is procedurally
entitled to in the absence of the defendant
cannot be said to have been granted erroneously as contemplated in
Rule 42 in the light
of the subsequently disclosed defence. Such a
defence cannot transform a validly obtained judgment into an
erroneous one.
[11]
No case has been made out in the application for an application
brought on common law grounds.
[12]
I now turn to deal with the applicant's reasons for bringing
this application and I deal with them singly.
[12]
1.
The amount of R565 058.69
claimed by the respondent
in the main action
i
s in
correct. The applicant and the first respondent had
agreed that the nature and amount of the applicant's indebtedness to
the
first respondent as well as the annual financial charge rate
payable would at any time be determined and proved by a written
certificate
purporting to have been signed by a Manager or
Accountant, for the time being, of any branch or Head Office of the
first respondent
whose capacity or authority it would not be
necessary to prove and which certificate would upon its mere
production be binding
on the applicant and be
prima facie
proof
of its contents of the fact that such amount was due and payable in
legal proceedings against the applicant. This is
a clause in
the agreement of loan to which the applicant has agreed. Such
certificate was annexed to the application by which payment
of the
aforementioned amount was claimed as Annexure 'E'. It was signed by
the Manager Foreclosures. Accordingly there is no merit
in the
argument that the amount that the first respondent claimed was
incorrect.
[12.2].
He
was unaware that his brother fai
l
ed
to pay
the monthly
i
installments
due in
terms of
the
loan agreement.
In 2008 the applicant concluded a loan agreement with the first
respondent. In terms of the said agreement the
applicant had himself
undertaken to pay the monthly instalments. Accordingly the applicant
was a party to the loan agreement responsible
for due performance.
The applicant's brother was no party to the said agreement. From the
point of view of the first respondent
the applicant's brother had no
obligation arising from the loan agreement requiring him to pay
anything. When no payment was forthcoming
in respect of the loan
agreement the first respondent was entitled to look to the applicant
for payment. The applicant has provided
no proof of cession to his
brother of his contractual responsibilities to pay the instalments of
the loan agreement. The duty was
on the applicant to make sure that
the debt was paid, whether by him as he had undertaken in the loan
agreement, or by his brother,
as they had agreed between the two of
them.
[12.3.]
The applicant signed an agreement of loan with the first respondent.
In the said agreement of loan he undertook to make
payments of
certain amounts on a regular basis. He certainly was made aware of
the repercussions of failure to comply with the
terms of the
agreement. And he takes his brother and puts him in the house and
arranges with him to continue with payment of the
instalments in
respect of the said property. However, he failed to make sure that
his brother makes regular payments of the loan
agreement. He has not
checked on him, he fails to make enquiry on both his brother and the
first respondent as to whether the first
respondent was receiving any
payment of the loan agreement. For a further period of 7 months after
his brother had left the premises
he fails to check on the property
and to make sure that everything is in good condition.
[12.4]
That he
was unaware of
the
respondent's actions against him
. The law requires that a party
should be warned about a case against him and that he be given chance
to defend himself. Such warning
is constituted by serving a copy of
the claim documents on a party who is notified about a claim against
him after which it is
expected that as soon as that party receives a
copy of the summons he will take steps fend off the claim. According
to the papers
before us there is proof that a copy of the summons was
served upon the applicant in this matter. The return of service
states
that on 9 day of June 2012 and at 10h30 at Unit 198, door G32
Houghton Village Estate, 32 Boundary Road Houghton Estate annexed
the
notice of motion was served on the applicant by affixing a copy of
the original notice of motion, founding affidavit and annexures
to
the main door of the given address, such address being the
applicant's chosen
d
omicilium
ci
t
an
d
i
et
e
xecutandi.
In that manner it is accepted
by this Court that a copies of the first respondent's claim documents
were properly served on the
applicant at the designated address.
[12.5].
Secondly there seems to have been an inordinate and long delay in the
applicant bringing this application. He contends that
he only became
aware of the action on 31 October 2013 when he had gone to prepare
the property so that his new tenant could move
in. On that day he
discovered that the property had been sold to the second respondent
on 25 April 2013. He then made enquiries
with the first respondent
and on 30 October 2013 he was advised by email that the property had
been sold in a sale of execution.
It is argued by counsel for
the first respondent that had the applicant paid a reasonable amount
towards his asset he would
have been able to stave off the execution
that took place prior to 31 October 2013.
[12.6].
After receiving the email from the first respondent he immediately
contacted his attorney, a certain Mr. Eli Chitowitz who
investigated
further and who ascertained the identity of the first respondent's
attorneys. The said attorneys requested to be furnished
with the
relevant documents relating to the matter in which judgment was taken
and the documents were only received on the 101h
of December 2013. By
this point his attorney was already on leave and he only came back
from leave on the 13th of January 2014.
The attorney was available
for a period of more or less three months and then all of a sudden he
was again away for seven days
in April 2014. The applicant has
furnished no explanation as to why firstly, there was such a long and
inordinate delay in obtaining
the documents from the first
respondents or why the documents were only received on 10 December
2013. There is also no explanation
as to why the application was not
brought during the three months period to the applicant's legal
representative's absence in April
2014. The applicant's main
affidavit dated 12 June 2014 by the applicant was only issued from
this Court on 20 July 2014. From
12 June 2014 to 20 July 2014 a
period of six weeks passed and there has been no explanation
forthcoming from the applicant as to
why there was such a long delay.
T exacerbate matters his averments have not been supported by Mr Eli
Chatowitz.
[12.7].
In my view there has been a long unnecessary and unexplained delay in
bringing the application for rescission by the applicant.
[12]
8. According to the first respondent, the applicant was sent a notice
in terms of s 129 of the NCA on 23 March 2012. The said
notice, whose
purpose was primarily to draw the attention of the applicant his
failure to comply with the terms of the loan agreement,
to request
him to take steps to regularise the situation within a given time, to
advise him to seek assistance from certain institutions
and to warn
him of the dire consequences if failed to hearken their advice, was
posted to his designated address by registered
post on 23 march 2012.
The applicant contends that said notice was not delivered in terms of
the loan agreement; that no such notice
was delivered to him in terms
of the NCA. This assertion by the applicant has its genesis in a
report to the applicant by his afore
mentioned brother in which he
denied ever receiving such any documents or registered post office
slips notifying him of any item
sent to him by registered post. On
this basis he denied that he was in default with the terms of the
loan agreement. Furthermore
he contend that even if the first
responded proved that it complied with s. 129 of the NCA, the said
notice was premature as he
was not in arrears at the time such a
notice was dispatched to him.
[12.9].
According to the Randurg Post Office's list of registered item dated
23 March 2012 there was a registered item to the applicant's
designated address. It is not the applicant's case that the said
address is not his address or that it is wrong. It is for the
court
difficult to fathom out why a postman would fail to deliver the
necessary document at the given address. In the premises
this court
must accept that in the absence of any explanation, the notice in
terms of s 129 was delivered properly delivered at
the applicant
designated address. In terms of Kubyane v Standard Bank of S A Ltd
2014 (3) S A 56
CC the court had this to say:
'TJ9]
In sum, the Act does not require the credit provider to bring the
contents of a section 129 notice to the subjective attention
of a
consumer. Rather, delivery consists of taking certain steps,
prescribed by the Act, to apprise a reasonable consumer of the
notice. Thus, a credit provider's obligation may be to make the
section 129 notice available to the consumer by having it delivered
to a designated address. When a consumer has elected to receive
notices by way of the postal service, the credit provider's
obligation
to deliver generally consists of dispatching the notice by
registered mail ensuring that the notice reaches the correct branch
of the Post Office for collection
and
ensuring
t
h
at
the
post Office
notifies
the
consumer (at
her des
i
gnated
address)
that
a r
e
gistered item is awaiti
n
g
her collection.
11
According
to Sebola v Standard Bank of S A Ltd 2012 (5) 142 CC:
"
When a consumer has elected to receive notifications through the
postal service, the credit provider must show that-
(i)
the section
1
29
notice
w
a
s
sent
b
y r
e
gistered mail and de
l
ivered
to the c
o
rrect branch
of the Post Offic
e
,
generally to be deduced from a
t
rack and trace r
e
port,·
(ii)
the Post Office informed the c
o
nsumer t
h
at
a r
e
gistered item was ava
i
lable
for collection,·
(iii)
the
notification from
the
Post
Office
reached
the
consumer
,
w
hich
m
a
y
generally
be inferred if
t
he
notification
w
a
s sent to the correct
postal ad
d
ress (as des
i
gnated
b
y
the consumer
)
, unless there is an indication to the
contrary; and
(iv)
a reasonable consumer
would have ensured
retrieval of the registered item from
the
Post
Office.
“
[13]
The relevant notice convincingly shows that as at 22 march 2012, the
applicant was in arrears in the total sum of R65694. 29.
Clause 4.28
of the loan agreement provided that if the applicant should be in
default of the agreement, the first respondent may
choose to claim
immediate payment of the entire amount outstanding from the applicant
or terminate the said agreement. Upon termination
of the agreement,
all the amounts owing by the applicant to the first respondent would
forthwith become payable. Accordingly this
Court is satisfied that
the s 129 notice was properly delivered to the applicant's designated
address; that at the time it was
dispatched the applicant was in
arrears; that therefore the said notice was not sent prematurely and
that in terms of clause 4.28
the first respondent was entitled to
claim from the applicant immediate payment of the entire outstanding
amount. This Court is
not satisfied that the applicant has not shown
any bona fide defence at all
[14]
In my view, the applicant has failed to satisfy the Court that the
judgment obtained against him by default should be rescinded.
Accordingly
the application for rescission is dismissed with costs.
__________________
P.
M. MABUSE
JUDGE
OF THE
HIGH COURT
Appearances:
Counsel
for the Applicant: No Appearance
Instructed
by:
Counsel
for the respondents: Adv. D. Pool
Instructed
by: Bezuidenhout van Zyl Inc.
Date
Heard·11 August 2015
Date
of Judgment: 11 August 2015