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[2015] ZAFSHC 187
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Annandale v Standard Bank of South Africa Limited (4254/2014) [2015] ZAFSHC 187 (18 September 2015)
IN THE HIGH COURT
OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 4254/2014
In the
matter between
JAN
HERMANUS HENDRIK ANNANDALE
Applicant
and
STANDARD
BANK OF SOUTH AFRICA LIMITED
Respondent
CORAM:
NAIDOO, J
JUDGMENT:
NAIDOO, J
HEARD
ON:
25 JUNE 2015
DELIVERED
ON:
18 SEPTEMBER 2015
[1]
This is an application for the rescission of a default judgment
granted by the Registrar of this court
on 6 November 2014, as well as
an application for condonation for the late filing of the rescission
application. Mr JJ Buys appeared
for the applicant and Mr P Zietsman
SC for the respondent.
[2]
The respondent (as plaintiff) issued summons against the applicant
(as defendant) for payment of the
amounts of R 1 034 297.66 (claim 1)
and R551 200.00 (claim 2), together with interest thereon and costs.
For convenience, I shall
refer to the respondent as the plaintiff and
the applicant as the defendant. The plaintiff lent and advanced
monies in respect
of home loans to the defendant. As security for the
loans, the defendant registered mortgage bonds over his immovable
property.
The plaintiff alleges that the defendant failed to pay the
instalments as he had agreed to do. It consequently issued summons
against
the defendant for the recovery of the amounts owing as well
as for an order declaring the defendant’s immovable property
specially executable. The plaintiff also alleged in its Particulars
of Claim that it complied with section 129(1)(a) of the National
Credit Act 34 of 2005 (NCA) by sending the requisite notices in terms
thereof, in respect of claim 1 and claim 2. The notices,
which were
attached to the Particulars of Claim, are dated 21 August 2014.
[3]
The summons was served on the defendant on 25 September 2014, by
affixing it to the main entrance of
the applicant’s chosen
domicilium
citandi et executandi
,
being I Wilge Avenue, Bloemfontein. As there was no response from the
defendant, the plaintiff obtained judgment by default on
6 November
2014, with leave to refer to open court its application to declare
the defendant’s property executable. To this
end, the plaintiff
subsequently served on the applicant, on 24 November 2014, a notice
of set down and an affidavit in support
of its application to declare
such property executable, together with the application for default
judgment and the default judgment
granted by the Registrar. This
application was opposed by the defendant, who alleges that he
received the application some time
in November 2014. He immediately
consulted a debt counsellor who made an appointment with his current
attorney, with whom he consulted
on 3 December 2014. The application
to declare his property executable was postponed and he was given an
opportunity to file his
opposing affidavit, which was done on 16
January 2015. The application to declare his property executable was
enrolled for hearing
on 19 February 2015. The plaintiff’s Heads
of Argument in that matter was filed a few days before that and it
seems that
this application for rescission was launched on 12
February 2015, after the filing of the plaintiff’s Heads. The
application
to declare property executable has been postponed
sine
die
,
pending the hearing of this application. The plaintiff opposes the
present applications on the basis that the defendant failed
to give a
satisfactory explanation for his delay in bringing the application
for rescission and that he has not shown that he has
a
bona
fide
defence to the plaintiff’s claim.
[4]
The defendant alleges that he did not receive the summons, was
unaware of it and therefore
did not react to it. His first
notification of any legal action is the notice of set down, which he
saw in November 2014, and which
I have referred to above. The events
as I have outlined them above, then unfolded. The defendant further
alleges that he only became
aware of the default judgment during a
consultation with counsel on 13 January 2015, which was held for the
purpose of preparing
his opposing affidavit in the application to
declare property executable. I pause to note that the defendant
denies that there
was personal service of the latter mentioned
application on him, as reflected in the Sheriff’s return of
service. He alleges
that it was affixed to a pole at the front
entrance of his property. He only caught sight of the summons on 19
January 2015, at
which time he instructed his legal representatives
to launch the current application for rescission. The defendant also
indicates
that he applied for debt review in July 2014, due to his
over-indebtedness. The debt due to the plaintiff was included in such
application, which application was opposed by the plaintiff. The
plaintiff revealed that its two claims were ultimately excluded
from
debt review. The defendant therefore alleges that the plaintiff was
aware that he was subject to debt counselling and debt
review as
early as July 2014, but persisted with the summons in this matter.
The defendant’s contention is that the plaintiff
ought to have
terminated the debt review in respect of the credit agreements
between it and the defendant, by way of a notice in
terms of section
86(10) of the NCA, before it could issue summons against the
defendant. The plaintiff’s failure to do so
renders the summons
premature and, consequently, the default judgment was wrongly granted
on 6 November 2014. I will return to
this later.
[5]
Rule 27(1) of the Uniform Rules of Court provides:
“
In
the absence of agreement between the parties, the court may upon
application on notice and on good cause shown, make an order
extending or abridging any time prescribed by these rules or by an
order of court or fixed by an order extending or abridging any
time
for doing any act or taking any step in connection with any
proceedings of any nature whatsoever upon such terms as to it
seems
meet”
The
requirement of “good cause” to be shown is repeated in
sub-rule (3) which provides that “The court may, on
good cause
shown, condone any non-compliance with these rules”.
These
two sub-rules of Rule 27 provide the court with a wide discretion to
condone non-compliance with the Rules. It is clear, however,
that an
important safe guard is that good cause must be shown.
[6]
Rule 31(2)(b) of the Uniform Rules of Court provides that:
“
A
defendant may within twenty days after he or she has knowledge of
such judgment 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”
The
requirement of showing “good cause” must similarly be
complied with when an application for rescission is brought.
Although, in an application for rescission, wilful default, for the
purposes of this subrule is not a requirement, the
consideration
of what constitutes “good cause” usually
includes the element of wilfulness. More than six decades ago, the
court in
Grant
v Plumbers (Pty) Ltd 1949(2) SA 470 (O) at 476-7,
stated the following to be the requirements which an applicant must
comply with in an application for rescission:
“
(a) He must
give a reasonable explanation of his default. If it appears that his
default was wilful or that it was due to
gross negligence the
Court should not come to his assistance.
b) His application
must be
bona
fide
and not made with the intention of delaying the plaintiff’s
claim.
(c) He must show
that he has a
bona
fide
defence to the plaintiff’s claim. It is sufficient if he makes
out a
prima
facie
defence in the sense of setting out averments which, if established
at the trial, would entitle him to the relief asked for. He
need not
deal fully with the merits of the case and produce evidence that the
probabilities are actually in his favour”
(See
Erasmus
in
“
Superior
Court Practice”, page B1-20).
Grant’s
case has since been cited with approval in a long line of
decisions.
Harms
in Civil Procedure in the Superior Court B-204,
expresses
the view wilful default is normally fatal but gross negligence may be
condoned.
[7]
In this matter, the defendant consulted with his attorney on 3
December 2014, in connection with the
executability application. It
must have been immediately apparent to his attorney that a judgment
in favour of the plaintiff would
have been the forerunner to such an
application. Similarly, when the defendant consulted with counsel on
13 January 2015, the same
consideration must have been within the
contemplation of counsel. It is difficult to imagine that the
defendant would not have
been made aware by his legal representatives
that a judgment against him would have to have been granted for an
executability application
to be launched, and if it is in fact the
case that this was not brought to the defendant’s attention (as
he seems to suggest),
then one can only conclude that his legal
representatives were negligent. An attorney does not need to
physically see a summons
to know that an application to declare
property executable follows upon the granting of judgment (usually by
default). In any event,
the annexures attached to the notice of set
down were firstly, a supporting affidavit by an employee of the
plaintiff setting out
the facts leading up to the executability
application, the dates when the summons was issued and served on the
defendant and the
amounts owed by the defendant, secondly, the
application for default judgment and thirdly, the default judgment
granted by the
Registrar of this court. The Sheriff’s return
confirms this, and although the defendant denies that the documents
were served
on him personally, he does not deny receipt of the
annexures to the notice of set down, which he says were affixed to a
pole at
the main entrance of his residence.
[8]
These were the documents presented to his legal representatives. The
explanation, therefore, that he
became aware of the judgment only on
19 January 2015, after a copy of the summons was obtained by his
attorney on 14 January 2015,
rings hollow. I am more inclined
to believe that he was so focused on preventing an order declaring
his property executable,
that he did not immediately pursue the
application for rescission. It was only after this was pointedly
raised by the plaintiff
in its opposing affidavit and Heads of
Argument that he seems to have been spurred into action regarding the
rescission application.
But once again, he was dogged by some
“mishap” in the offices of his attorney resulting in the
application for rescission
not being issued and served until 12
February 2015. To my mind, the defendant’s opposing affidavit
in the executability application
seems to have all the elements for a
founding affidavit in an application for rescission, which may well
have been within his contemplation
at the time. It seems to me that
he was extremely negligent in not pursuing the rescission application
at that time. While it seems
that his legal representatives may not
be blameless, I will refrain from making any pronouncement in that
regard.
[9]
I turn to the defence raised by the defendant. In essence, he alleges
that the summons was premature
as he did not receive the notices in
terms of section 129 of the NCA sent to him prior to his application
for debt review in July
2014. My addressed the court extensively
regarding the post office at which the defendant receives his post.
It seems that although
the defendant lives in the Roodewal area, the
Renosterspruit post office services that area. A perusal of the
relevant section
129 notices, dated 4 June 2013 and 3 July 2014
indicate that they were sent to the Bloemfontein post office and
ultimately returned
to Standard Bank. The defendant seeks the setting
aside of the default judgment and the application to declare his
property executable,
with the ultimate aim of entering into the main
action for the purpose of having the debt owed to the plaintiff
included in the
debt restructuring and revive matter before the
Magistrates Court. It seems that he was advised (erroneously,
according to him)
to exclude the plaintiff’s claim from the
debt review. Technically there was no bar to the plaintiff’s
proceeding by
way of summons. There is, however, still the issue of
the section 129 notices which the defendant says he did not receive,
which
may go to the heart of whether the summons should have been
issued when it was. Furthermore, it is not in dispute that the
defendant
is over-indebted. It is unrealistic to expect him to
service the debt owed to the plaintiff, without losing his home.
[10]
The court, in exercising its discretion in this matter must do so
judicially and judiciously in ensuring that the
prejudice to the
plaintiff is minimised, while also bringing a measure of fairness to
the defendant. That the defendant was negligent
in not bringing the
rescission application timeously is without doubt, as is the fact
that the plaintiff is suffering prejudice
as a result of the delay in
payment by the defendant of the monies he owes to the plaintiff. Such
prejudice, in my view, can be
mitigated to some extent by an
appropriate order for costs. Regarding the defence of the defendant,
it may well be that a court
hearing the trial of this matter will
consider such defence sufficient for it to exercise its discretion in
granting the defendant
the relief he seeks. To refuse his application
for rescission would have the effect of unsuiting him and closing the
doors of the
court to him. I am of the view that this court should
exercise its discretion in favour of the defendant, with an
appropriate order
for costs to mitigate the prejudice to the
plaintiff.
[11] In the
circumstances, I make the following order:
11.1
Condonation is granted to the defendant for the late filing and
service of the application for rescission;
11.2
The Default Judgment granted by the Registrar of this Court on 6
November 2014, under case number 4254/2014, is hereby
set aside;
11.3
The defendant is ordered to pay the costs of this application
___________________
S. NAIDOO, J
On behalf of the
Applicant: Adv. JJ Buys
Instructed
by:
Willie J Botha Inc
95B
Kellner Street
Bloemfontein
(Ref:
WJ Botha/jg/Ann1/0001)
On behalf of
Respondent: Adv Zietsman SC
Instructed
by:
Matsepes Inc
26/28
Aliwal Street
Bloemfontein
(DH/NS444P)