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[2015] ZANCHC 20
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Changing Tides (Pty) Ltd v Danster and Another (359/2013) [2015] ZANCHC 20 (29 May 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape Division, Kimberley)
Saakno
/ Case number:
359/ 2013
Datum
verhoor/Date heard:
17
/ 04 /2015
Datum
gelewer/Date delivered:
29 /
05 /2015
In
the matter between:
CHANGING
TIDES (PTY) LTD
Applicant
and
FERDINAND
ALI DANSTER
First
Respondent
GERTRUDE
TRUDY DANSTE
,R
Second Respondent
Coram:
Erasmus, AJ
JUDGMENT
ERASMUS,
AJ
BACKGROUND
[1]
Action was instituted during March 2013. On 24 October 2013 the
Registrar of this court granted default judgment against
the
respondents and in favour of the applicant for payment of the amount
of R243189.18, plus interest and costs.
[2]
On 2 July 2014 the applicant lodged this application to have the
property, described as Erf 22656, situated in the Sol Plaatje
Municipality and also known as 28 Owl Crescent, Kimberley
(hereinafter referred to as ‘the property’), declared
specially
executable and further that the Registrar be authorized to
issue a writ of execution to give effect to such order and the
respondents
be ordered to pay the costs on a scale as between
attorney and own client. This application was to be made on 1
August 2014.
The respondents gave notice of their intention to
oppose this application on 29 July 2014 and the matter did not
proceed on 1 August
2014.
[3]
As no opposing papers were filed on behalf of the respondents, the
application was enrolled to be heard on 5 December
2014.
On 2 December 2014 the respondents filed and served the opposing
affidavit, accompanied by an application for condonation
of the late
filing of the opposing affidavit. The applicant opposed the
application for condonation and the matter was postponed
to the
opposed roll, to be heard on 17 April 2015. The applicant
proceeded to file replying papers on 26 February 2015.
[4]
At the hearing of the application, on 17 April 2015, the applicant
abandoned its opposition to the application for condonation.
The parties indicated that argument would be directed at the merits
of the main application in respect of the relief as set out
in
paragraph [2]
supra.
THE
LEGAL POSITION
[5]
The legal position in respect of applications to have immovable
property declared specially executable has been spelt out in
numerous
decisions and more specifically in
GUNDWANA
v STEKO DEVELOPMENT AND OTHERS
.
[1]
A court has to
consider
all relevant circumstances before ordering execution against the
property
if
such property is
the
judgment debtor's primary residence.
[2]
[6]
The
Constitutional Court has provided guidance and set out examples of
such ‘relevant circumstances’ in
JAFTHA
v SCHOEMAN & OTHERS
;
VAN
ROOYEN v STOLTZ AND OTHERS
.
[3]
[7]
Execution shall not issue against immovable property until the
movable property has been excussed.
[4]
It
should further be taken into account that execution may not be
avoided if there are no other proportionate means to attain the
same
end.
[5]
[8]
It is against the background of these principles that the facts of
this matter should be considered.
THE
FACTS
[9]
The respondents did not challenge the correctness of the default
judgment or seek the judgment to be rescinded and, in my view,
rightly so. The facts, as alleged by the applicant in support
of the application to have the immovable property declared
executable, appear mostly to be common cause between the parties.
[10]
The claim of the applicant was based on the breach of a loan
agreement, entered into with the respondents during 2008,
in that the
respondents failed to regularly pay the instalments. The only
security of the applicant for the loan granted
to the respondents is
the mortgage bond registered over the property in favour of the
applicant. The respondents, in order
to secure the loan,
mortgaged the property in favour of the applicant with the full
knowledge that the applicant would be entitled
to rely on its
security and seek an order to have the property declared specially
executable and ultimately sell it in execution.
[11]
The applicant has, as far back as 2011, endeavoured to make contact
with the respondents in an effort to obtain payment
of the arrears.
The respondents applied for debt review during July 2011. This
application was withdrawn in September
2011. On 25 July 2012
the applicant agreed to capitalize the arrears in an effort to assist
the respondent in bringing their
loan account up to date.
Despite these efforts, the account of the respondents has been in
arrears since November 2012.
Despite several undertakings and
arrangements by the respondents, the arrears escalated dramatically
from April 2013.
[12]
Even after the matter was handed over to the applicant’s
attorney for legal action, the applicant continued its
efforts to try
and collect the arrears and make alternative arrangements, once again
without success. The applicant went
as far as to suggest that
the respondents sell the property privately, but they refused to do
so. The respondents continued
to make erratic payments.
[13]
After default judgment was granted, the applicant attempted to
execute against the movable property of the respondents
on 7 February
2014.
Nulla bona
returns
were received from the Sheriff. As at 18 June 2014, shortly
before this application was launched, the total indebtedness
of the
respondents amounted to R264,815.90 and the arrear instalments
amounted to R36,027.96, such arrears representing more than
eleven
monthly instalments.
[14]
The respondents are not receiving a state subsidy in respect of the
loan. The property is used for residential
purposes and is
occupied by the respondents as their primary residence.
[15]
The facts pertaining to other persons occupying the property with the
respondents were unknown to the applicant.
The respondents
(then defendants) were, in the Particulars of Claim, informed about
the provisions of section 26(1) of the Constitution
of the Republic
of South Africa and that such right might be implicated by an order
for execution. They were invited to supply
information
supporting any alleged infringement on their right of access to
adequate housing before the court and that failure
to do so might
result in such an order being made.
[16]
In his opposing affidavit dated 2 December 2014, the first respondent
averred that he has experienced great financial
difficulty for the
past three years, as he has been struggling to source work as a
building contractor. His
total
income
for the six months
preceding this period
is
alleged to have been R17
,
500.00.
[17]
The first respondent further stated that he had been approached
telephonically by an employee of the applicant,
who
enquired
how he intended settling his obligations towards the
applicant. From the timeframe of the events, this conversation
appears
to have taken place during the beginning of November 2014.
During this telephonic discussion, the first respondent undertook
to
make monthly instalments of R2
,
500.00 per
month,
the
first payment
of
which was
due on 7 December 2014.
[18]
This agreement, according to the first respondent, was accepted by
the applicant
. The First Respondent averred
that
it was agreed that
,
if the
payment is made, the application
to
declar
e
the property executable will not be proceeded with. As proof of
this alleged agreement, the first respondent attached copies
of
e-mail correspondence
and a
letter
,
dated 1 December 2014
,
from his attorneys
of record to the applicant’s attorneys. In this letter
the first respondent’s attorney stated
that it is their
instructions that
the first respondent
has
made arrangements with an employee of the applicant
to
the effect
that the application to have the property declared
executable would not be proceeded with
,
provided that monthly payments of R2
,
500
.00
are
made
and
the
first
of
such payment
s
to be
made
on or
before
7 December 2014. The applicant’s attorneys were requested
to advise whether the matter was proceeding.
The
applicant’s attorneys
appear not to have
responded to this letter, but proceeded on 2 December 2014 to enrol
the application to be heard on 5 December
2014
.
[19]
The first respondent, in his opposing affidavit, confirms that he is
in a position to pay the sum of R2
,
500.00
per month and that he made payment thereof
into
the loan account
on 2 December 2014. He submitted that
the application could not be proceeded with in the light of the
agreement referred to
above.
The respondents
however have not made any further payments thereafter.
[20]
The first respondent further averred that, when the Sheriff served
the warrant of execution on him, he informed
him
that he had no money to pay the judgment debt
,
but that he had a vehicle on the premises valued at approximately
R35
,
000.00 and that he was prepared to sell
this vehicle in lieu of his indebtedness. He denies that the
Sheriff searched inside
his home. He stated further that his
household furniture is worth approximately R150
,
000.00
.
He submitted
that he
thus
has a
substantial amount t
o
cover the
indebtedness of the respondents and that there is no need to execute
the immovable property.
[21]
The only
other
facts
disclosed
in respect of
the personal circumstances of the respondents
are that they, together with their two children, aged 18 and 11 years
and two grandchildren,
aged 9 and 5 years, reside on the property
sought to be declared executable. The first respondent is a
building contractor
and second respondent is a housewife.
[22]
The second respondent filed neither an opposing nor a confirmatory
affidavit.
[23]
The applicant, in the replying affidavit dated 20 February 2015,
denied that any agreement was reached, as alleged by
the first
respondent. It was reiterated that all attempts to settle the
dispute were
made
by the applicant.
In support of its denial of the agreement, the applicant attached a
copy of an extract of its official
workflow system in this matter,
compiled and confirmed by Priscilla Hoosen.
[24]
The interaction between the said Priscilla Hoosen and the first
respondent, as set out in the workflow system document,
appear
to have been
as follows:
24.1
The first respondent indicated on 14 May 2014 that he would be able
to pay R2
,
500
.00
at the end of the month after completion of his
contract,
but
that he had still not secured permanent employment.
He was informed that the amount of R2
,
500
.00
was
too little and that the applicant was proceeding to attach
the property.
24.2
On 4 September 2014 the first respondent promised to pay R2
,
500
.00
on the
following
Saturday.
24.3
On 16 October 2014 the first respondent was informed
via
‘
SMS
’ that the applicant was
proceeding with
steps to
attach the
property to be sold at an auction.
24.4
On 10 November 2014 the first respondent was reminded of his earlier
promise. He
undertook
to pay
R2
,
000
.00
on the
Monday, as he had started working at
a
church
. H
e could not tell
Hoosen
when he
would be able to
start addressing
the arrears and maintain the instalment. On this day the first
respondent was advised that legal action
was
proceeding and that he should consider selling the house, to which he
responded that he would call Hoosen by the Monday
subsequent
to having made
the payment.
[25]
The amount of
R2
,
500
.00,
paid
on 2 December 2014
,
was the
first payment that the applicant received in seven months and no
further payments ha
ve
been received since.
This is confirmed by the updated payment history attached to the
replying affidavit.
[26]
The applicant denies the first respondent’s allegations
pertaining to the availability of movable assets to satisfy
the
debt. In the returns of the Sheriff, in respect of both
respondents, the Sheriff specifically states that the respondents
informed him that they had ‘
no money, disposable property or
assets
’ to satisfy the warrant or any portion thereof.
The Sheriff also stated that no movable property/disposable assets
were either pointed out or could be found after a diligent search and
enquiry at the given address and therefore that his return
is one of
nulla bona.
[27]
It was submitted on behalf of the applicant that a proper case ha
d
been made out for the relief sought and that
t
he
first respondent’s opposition of the application is merely a
delaying tactic.
[28]
It was submitted on behalf of the respondents that the application
should be dismissed, alternatively that it should
be referred
for
oral evidence as a result of the first respondent’s
alleged
agreement with the representative of the applicant
to
make payments
of R2
,
500
.00
and the
applicant’s undertaking that the
sale in execution of the property would not be proceeded
with. The first respondent only made one payment
as
the applicant has continued with the application to have the property
declared executable.
[29]
It was further submitted that it would not be just to declare the
property executable under the circumstances.
The applicant has
not exhausted all its remedies, as the respondents have movables
which, if sold, could result in a substantial
amount of the
indebtedness being extinguished.
[30]
It is trite law that an applicant who seeks final relief in motion
proceedings must, where a dispute of fact arises,
accept the version
set up by the respondent unless the respondent’s allegations
are such that they do not raise a real, genuine
or
bona
fide
dispute
of fact or are so far-fetched or clearly untenable that the court is
justified in rejecting those allegations merely on
the papers.
[6]
[31]
I have no hesitation in rejecting the first respondent’s
version that an agreement had been reached between himself
and
Priscilla Hoosen
during November 2014
.
These allegations are contradicted by the contents
of the workflow system document, as confirmed by Hoosen. It is
also highly
improbable that the applicant would have accepted such an
offer, given the amount of the arrears and the history of this
matter.
It is also improbable that the applicant then would
have proceeded to enrol the application if the first respondent had
effected
payment in accordance with the agreement on 2 December 2014.
[32]
I deal secondly with issues raised in respect of the
nulla
bona
returns,
issued by the sheriff of this court. In terms of section 43(2)
of the Superior Courts Act
[7]
,
the return of the sheriff or a deputy sheriff
about
what has been done upon any process of a court, shall be
prima
facie
evidence of the matters therein stated. An impeachment of the
return will not be lightly upheld and the clearest evidence
must be
adduced
in
contradiction and/or rebuttal of such evidence.
[8]
[3
3
]
The allegations in respect of the availability of movable property
that can be sold in execution are bald allegations, not
substantiated
by facts and/or proper valuations of the property. These
allegations are also not confirmed by the second respondent,
who
was
present when the Sheriff attempted to execute against the movable
property of the respondents. The respondents have not rebutted
the
prima facie
proof and I accept the
nulla bona
returns
as correct and as proof of what is stated therein.
[34]
Even if the first respondent’s version is accepted, the total
value of the movables
,
at best
,
amount to R185
,
000.00. In the event
that
such
amount is raised at an auction,
it still is clearly insufficient to satisfy the writ and/or
extinguish the debt. Given the
dire financial position the
respondents find themselves in and the payment history, I am of the
view that the respondents will
not be in a position to settle their
debt towards the applicant.
[3
5
]
The respondents have failed to place sufficient relevant
circumstances before the court warranting the exercise of my
discretion
in their favour.
Taking into
account
the
history of this matter, the
substantial amount of the judgment debt and the respondents’
inability to pay the instalment and arrears
, t
he
only
realistic
manner in which the
applicant can protect its interests is by means of the relief sought
herein. In my view
there are no other
proportionate means to attain the same result and therefore execution
cannot be avoided.
[3
6
]
In respect of the costs
,
it was submitted
on behalf of the respondents that there was no need for the applicant
to approach the High Court in this instance
and that the respondents
should not be ordered to pay the costs on
the
High
Court scale, let alone on a scale as between attorney and own
client.
The respondents, i
n t
he
loan agreement
,
consented and submitted to
the jurisdiction of the Magistrate’s court in respect of all
proceedings connected with this agreement,
notwithstanding the amount
claimed or the value of the matter in dispute exceeding such
jurisdiction. This however did not
preclude the applicant from
having instituted proceedings in the High Court. The loan
agreement further provides for legal
costs to be paid on a scale as
between attorney and own client. The amount claimed was
substantial. Despite the summons
having been served on the
respondents in person, they elected not to defend the action.
Default judgment was granted by the
registrar of this court, hence
the application to have the property declared executable was lodged
in this court.
It was not unreasonable of
the applicant to litigate in this court. On the other hand, t
he
respondents were invited and entitled to place information before the
court why this order should not be granted. Even
though they
were unsuccessful in opposing the application, the
re
is no reason why they
should
be
punished for doing so
by way of
a cost
order on attorney and own client scale.
WHEREFORE
I
MAKE THE FOLLOWING ORDER:
1.
THE PROPERTY DESCRIBED AS ERF 22656,
SITUATED IN THE SOL PLAATJE MUNICIPALITY AND ALSO KNOWN AS 28 OWL
CRESCENT, KIMBERLEY IS DECLARED
SPECIALLY EXECUTABLE;
2.
THE REGISTRAR IS AUTHORIZED TO ISSUE
A WRIT OF EXECUTION TO GIVE EFFECT TO SUCH ORDER;
3.
THE RESPONDENTS ARE ORDERED, JOINTLY
AND SEVERALLY, THE ONE PAYING THE OTHER TO BE ABSOLVED, TO PAY THE
COSTS OF THE APPLICATION
ON A SCALE AS BETWEEN PARTY AND PARTY.
_________________
SL ERASMUS
ACTING JUDGE
For
the Applicant:
Adv. A.D. Olivier (oio Haarhoffs Inc)
For
the Respondent:
Mr.
S.J. Groenewaldt (oio Towell & Groenewaldt Attorneys)
[1]
2011
(3) SA 608 (CC)
[2]
FirstRand
Bank Ltd v Folscher and Another, and Similar Matters
2011
(4) SA 314 (GNP)
at
330C–D;
Jaftha
v Schoeman & Others; Van Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005
(2) SA 140
(CC)
at
161I
[3]
Jaftha
v Schoeman & Others supra
at
161I–163B; See also
Nedbank
Ltd v Mortinson
[2005] ZAGPHC 85
;
2005
(6) SA 462
(W)
;
Standard Bank of South Africa Ltd v Saunderson
2006
(2) SA 264
(SCA)
at
277C–F;
FirstRand
Bank Ltd v Folscher and Another, and Similar Matters
2011
(4) SA 314 (GNP)
at
332C–333D;
Absa
Bank Ltd v Ntsane
[2006] ZAGPHC 115
;
2007
(3) SA 554
(T)
at
567A–568A
[4]
Barclays
Nasionale Bank Bpk v Badenhorst
1973
(1) SA 333
(N)
;
Standard
Bank of South Africa Ltd v Bekker and Another and Four Similar Cases
2011
(6) SA 111
(WCC)
at
116B-117A
[5]
Gundwana
v Steko Development and Others
supra
at
626F–G par [54]
[6]
Wightman
t/a JW Construction
V
Headfour (Pty) Ltd
2008(3)
SA 371 at 375 par [12];
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984(3)
SA 623 (A) at 634E-635C
[7]
No.
10 of 2013
[8]
Sussman
& Co (Pty) Ltd v Schwarzer
1960
(3) SA 94
(O) at 96F-G;