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[2014] ZANCHC 5
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Wepener and Another v Firstrand Bank Limited (1826/2009) [2014] ZANCHC 5 (13 June 2014)
SAFLII
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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
[NORTHERN CAPE
DIVISION, KIMBERLEY]
JUDGMENT
CASE
NUMBER: 1826/2009
DATE:
13 JUNE 2014
DANIEL JOHANNES
WEPENER
.....................................................
FIRST
APPLICANT
RIA
WEPENER
.............................................................................
SECOND
APPLICANT
AND
FIRSTRAND BANK
LIMITED
.............................................................
RESPONDENT
Date of hearing:
28 March 2014
Date of judgment:
13 June 2014
Phatshoane J
1. Mr Daniel
Johannes Wepener and Ms Ria Wepener, the first and second applicants,
are married to each other in community of property.
They are applying
for the rescission of a default judgment dated 28 June 2013 entered
against them declaring their property known
as Erf [4………].
situated at No [..] [J…] Avenue, [H……] Park,
Kimberley, executable.
2. FirstRand Bank
Limited, the respondent, took two points in limine against the
application. Firstly it contended that the Wepeners
are not entitled
to condonation for the late filing of their application for the
rescission because they were aware of the action
proceedings
including all the applications that were filed in consequence of the
action. The second point raised is that the Wepeners
acquiesced in a
judgment by making certain payment arrangements before and after the
Rule 46 judgment was obtained.
3. Three mortgage
bonds were registered over the Wepeners’ property, Erf [4…]
Kimberley, in favour of the Bank as security
for loans advanced to
them between 14 February and 26 October 2005. The Wepeners’
initial monthly instalment on their bond
account was R8 839.27. From
the correspondence attached to the Bank’s papers they fell in
arrears for the first time on 02
June 2007. As at 14 November 2008
they were in arrears in the amount of R56 924.81. The Bank foreclosed
on the mortgage bonds and
issued summons against them in 2009 for the
payment of an amount of R 979 510.24 together with certain ancillary
relief with regard
to interest, costs and declaring their property
executable. The summons was personally served on Mr Wepener who
accepted service
on behalf of Ms Wepener on 12 November 2009. They
did not defend the action.
4. On 12 January
2011 the Registrar entered default judgment against the Wepeners for
the amount claimed in the summons, interest
on that amount at the
rate of 15.5% per annum a tempore morae, costs of suit and declared
their property executable.
5. Between 13 June
2011 and 19 August 2011 there were telephonic discussions between the
Bank and the Wepeners and certain proposals
were made with a view to
finding possible solutions towards the settlement of the bond
account. This came to naught. On 15 September
2011 the Banks’
deponent, Ms Amelia Du Buisson, intimated that a voice mail message
was left on Mr Wepener’s telephone
to call the Bank for the
conclusion of what is called a “payment arrangement”. Du
Buisson says that Ms Wepener was
also called but she intimated that
she be called at a later date as she had prior engagements. Mr
Wepener confirms that he indeed
received messages on his phone to
return the Bank’s calls but cannot say on which dates. He also
acknowledged that the telephone
numbers were left on his phone but
not the name of a contact person.
6. The Bank states
that on 19 September 2011 it directed a telephone call once more to
Mr Wepener regarding a payment arrangement.
He expressed his
dissatisfaction with the Bank’s conduct of the matter. Wepener
stated that he was aware of the sale in execution
scheduled for 29
September 2011 and requested a statement of his bond account from
January 2010 onwards. On Mr Wepener’s
request the statement was
forwarded to his branch. These allegations are denied by Mr Wepener.
7. The Bank
explained that it was copied a letter dated 26 September 2011 from Mr
Geoff Smith, an attorney, addressed to the sheriff
stating that his
firm had received instructions to make an application for the
surrender of the Wepeners’ estate on 20 October
2011. The Bank
states that on account of this information it instructed the sheriff
to stop the sale that was due to take place
on 29 September 2011. The
voluntary surrender of the Wepeners’ estate was not made. Mr
Wepener concedes that he intended
to surrender his estate but on
advice aborted this plan.
8. On 02 November
2011 the Bank contacted Mr Wepener who intimated that he was willing
to enter into a payment arrangement. Du Buisson
states that from then
on negotiations ensued between the Bank and Mr Mike Sassin, the Group
legal advisor of Midlink Financial
services, on behalf of the
Wepeners. With regard to these negotiations it suffices to mention
that according to the Bank certain
documents were sent to the
Wepeners for completion and were telephoned on numerous occasions to
return them but to no avail.
9. On 22 December
2011 Midlink Financial Services directed a letter to the Bank’s
attorneys in which Sassin made a proposal
on the instruction of the
Wepeners that their monthly instalment on the bond be escalated to
R10 000.00 until the arrears on the
bond were liquidated. At that
stage the Wepeners were in arrears in the amount of R342 200.87.
10. On 14 March 2012
the Bank addressed an e-mail to Sassin which reads:
“As discussed,
the Bank acknowledges receipt of a request to structure a payment
arrangement and advise that we agree to a
monthly instalment of R12
000.00 reviewable in 6 months. Please be advised that an immediate
payment of R12 000.00 is required
to pend our legal action and the
next instalment is to be paid on the 1st April 2012. A debit order
will be implemented for the
April instalment.
Please further be
advised that should Mr Wepener default on one payment, the
arrangement will be withdrawn and our legal action
will resume.
Please do not
hesitate to contact me should you have concerns”.(My emphasis).
11. On 26 March 2012
the Bank received a Distress Customer Debt Payment Arrangement
(DCDPA) agreement and a debit order authorisation
document signed by
the Wepeners. The following were the salient but elaborate terms of
the agreement as paraphrased:
11.1 That the
Wepeners were in default or otherwise experiencing financial
difficulty and that the parties had entered into a temporary
arrangement (DCDPA) to assist the Wepeners.
11.2 That the terms
and conditions of the main agreement [the mortgage bonds/ loan
agreements] would remain in full force and effect
except as amended
by the terms of the DCDPA.
11.3 That the DCDPA
would only apply for the duration stipulated therein and upon
termination the terms of the main agreement would
be enforceable.
11.4 That the
Wepeners agreed to pay R12 000.00 monthly for a period of six months
with effect from 01 April 201 to 01 September
2012.
11.5 That on the
expiry of the term the DCDPA arrangement would terminate
automatically without notice to the Wepeners. At that
stage the
monthly premiums would increase and the Bank would notify them of the
new monthly premiums in writing.
11.6 That the
Wepeners had to sign a Debit Order Authorisation in respect of all
amounts owing in terms of the main agreement and
the DCDPA.
11.7 That the
default clauses set out in the DCDPA were additional to those set out
in the main agreement. That the Wepeners would
be placed in default
of the arrangement if they failed to pay any amounts due in terms of
the arrangement or the main agreement.
That should the Wepeners be in
default of the arrangement the Bank may, without notice, in its
discretion, claim immediate repayment
of the full outstanding
balance; terminate the arrangement and the main agreement, upon which
all amounts owing to the Bank by
them shall then forthwith be payable
in full.
11.8 That no
extension of time, waiver or relaxation of any of the provisions or
terms of the DCDPA or the main agreement would
operate as estoppel
against the Bank in respect of its rights under the arrangement and
the main agreement, nor shall it operate
so as to preclude the Bank
thereafter from exercising its rights strictly in accordance with the
arrangement and the main agreement.
11.9 The DCDPA did
not constitute a novation of the Wepeners’ obligations in terms
of the main agreement.
12. The debit order
authorisation signed by the Wepeners selected the first day of each
month as the day on which the debit order
would be processed. The
Bank states that on 01 April 2012, the first day in respect of which
the debit order was to take effect,
it was returned unpaid clearly
for lack of funds. The Bank therefore applied “set off”
by debiting a different account
held by the Wepeners with an amount
of R12 000.00 and credited same to their bond account. This is
vehemently denied by the Wepeners.
They maintain that from annexure
“DJ5” attached to their Replying Affidavit the Bank
collected two payments of R12
000.00 from their account on 02 April
2012 resulting in one debit order being reversed. Be that as it may,
on 02 May and 02 June
2012 the debit orders were honoured.
13. The Bank
maintains that on 29 June 2012 Mr Wepener requested the extension of
time to make payment. According to Du Buisson,
the Bank’s
deponent, Mr Wepener was informed that in exceptional circumstances
monthly instalment could be paid up to 10
July 2012 but late payment
would not be tolerated for subsequent months. This averment is denied
by the Wepeners.
14. In the following
months the Wepeners paid their temporarily agreed instalment of R12
000.00 on 09 July 2012; 24 August 2012;
and 17 September 2012. On
these three months the debit orders were processed on the first day
of the months and were dishonoured.
As for the subsequent incidents
(in October 2012) Du Buisson states in her affidavit:
“6.40 On 08
October 2012, the respondent [the Bank] had a telephonic discussion
with the Cape Town office of the first applicant
[Mr Wepener]
regarding the non-payment in October 2012, and he said that there
were no funds in the account as he gets paid by
the 15th of the
month, and he was requested to telephone the respondent’s
Johannesburg call centre to discuss this.
6.41 On 16 October
2012, the respondent telephonically informed the first applicant that
the enforcement of the judgment would be
proceeding and that he
needed to pay the full arrears on the account to stay the execution.
On 16 October 2012, R12000.00 was paid
to the bond account. As at
that date, such arrears were R360992.44. On 29 October 2012, the
respondent telephonically informed
the first applicant that it had
noted that payment, and that it was holding over to see if the
November 2012 debit order would
be honoured on 01 November 2012 or if
a payment would be made by credit transfer on that date, and the
first applicant responded
that he should be telephoned the following
day as he would then give the way forward as he could not talk then.
6.42 On 01 November
2012, the respondent telephonically asked the first applicant if the
debit order was going to be honoured and
the first applicant just
hung up the call. The respondent immediately telephoned back and the
first applicant just hung up the
call again. On 01 November 2012, the
debit order was submitted and returned unpaid…
6.43 No payments at
all were made to the bond account during November 2012”
15. Save to admit
that he paid R12 000.00 on 16 October 2012 Mr Wepener claims not to
bear any knowledge of some of the aforesaid
averments. He intimates
that he had difficulties in receiving commission from his employer in
November 2012 and that he attempted
to explain the situation to the
Bank. However, he confirms that he did not make any payment in
November 2012.
16. On 01 December
2012 a debit order was submitted and returned unpaid. This had become
an established pattern of not effecting
payment on the first day of
the month as agreed with the Bank. In subsequent months the Wepeners
paid the R12 000.00 on 05 December
2012, 10 December 2012, 02 January
2013, 13 February 2013, 18 March 2013, 30 April 2013, 09 May 2013, 24
May 2013, 21 June 2013,
26 July 2013, and 30 August 2013. The Bank
states that none of these payments settled the arrears on the bond
account and were
not in terms of any arrangement made with it.
17. On 16 May 2013 a
writ was issued in terms of Rule 46(1) for execution against the
Wepeners’ movable assets. The Bank received
a nulla bona
return. On 30 May 2013 the Bank called Mr Wepener twice in an attempt
to conclude a new payment arrangement. The Bank
intimates that at
first Mr Wepener said he be called later. Later on that day when he
received the second call from the Bank he
informed the Bank that he
was in a hurry but undertook to return the call. He did not call the
Bank as promised. Mr Wepener did
not gainsay this statement except to
state that it was the Bank’s official that promised to call him
back which never materialized.
18. In Gundwana v
Steko Development and Others
2011 (3) SA 608
(CC) it was held: that
judicial oversight is required where execution is sought against the
homes of indigent debtors after judgment
on a money debt. After much
was said and done the Bank brought an application in terms of Rule 46
of the Uniform Rules on 04 June
2013 declaring the Wepeners’
immovable property executable. The application was personally served
on Mr Wepener. Once more
the Wepeners did not oppose the application.
In the unopposed Motion Court of 28 June 2013 before Erasmus AJ an
order was issued
declaring the Wepeners’ immovable property
executable. The order of Erasmus AJ supersedes that of the Registrar
to the extent
that Registrar declared the property executable whereas
he was incompetent to do so.
19. Following the
order declaring their property executable the Wepeners say that they
received a letter from the Bank advising
them to contact it for a
possible solution to the impending problem. They interpreted this
letter as an invitation for them to
apply for a fresh DCDPA, which
they did. They further claim to have and to still be paying the Bank
the amount of R12 000.00 monthly
since the implementation of the
terminated DCDPA. They submitted therefore that this would be an
alternative to the execution of
the property.
20. The Bank’s
response is that the payment of R10 000.00 which is proposed in the
new application for DCDPA was not acceptable
to it and that the
Wepeners and their legal advisor were informed that their proposal
had been rejected.
21. I now turn to
the points in limine raised by the Bank. Ms Sieberhagen, for the
Bank, contended that the application for condonation
of the late
filing of the application should fail because the Wepeners were aware
that the summons had been issued against them;
furthermore they were
knowledgeable of the fact that default judgment had been entered
against them by the Registrar; that following
this, an application in
terms of Rule 46 of the Uniform Rules to declare their property
executable was successfully launched against
them after which the
Bank proceeded with the execution steps against their immovable
property. The relevant part of Rule 46 provides:
“46(1)(a) No
writ of execution against the immovable property of any judgment
debtor shall issue until-
(i) a return shall
have been made of any process which may have been issued against the
movable property of the judgment debtor
from which it appears that
the said person has not sufficient movable property to satisfy the
writ; or
(ii) such immovable
property shall have been declared to be specially executable by the
court or, in the case of a judgment granted
in terms of rule 31(5),
by the registrar: Provided that where the property sought to be
attached is the primary residence of the
judgment debtor no writ
shall issue unless the court, having considered all the relevant
circumstances, orders execution against
such property.”
22. The application
for rescission of a default judgment is ordinarily brought under Rule
31(2)(b) which provides:
“A defendant
may within 20 days after he 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.”
23. For the sake of
completeness Rule 42 provides:
“42 Variation
and Rescission of Orders:
(1)The court may, in
addition to any other powers it may have, mero motu or 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 or
judgment in which there is an ambiguity, or a patent error or
omission, but only to the extent of such ambiguity,
error or
omission;
(c) an order or
judgment granted as the result of a mistake common to the parties.
(2) Any party
desiring any relief under this rule shall make application therefor
upon notice to all parties whose interests may
be affected by any
variation sought.
(3) The court shall
not make any order rescinding or varying any order or judgment unless
satisfied that all parties whose interests
may be affected have
notice of the order proposed.”
24.Mr Olivier, for
the Wepeners, contended that the Wepeners’ application was not
brought in terms of Rule 31 or Rule 42 of
the Uniform Rules of the
Court but was premised on Common Law. He relied on De Wet and Others
v Western Bank Ltd
1979 (2) SA 1031
(A) in support of his argument.
He contended that under common law it was only necessary for the
applicant to establish good cause
for his/her default; a reasonable
defence and good prospects of success at the hearing in due course.
He further argued that it
was not necessary for the application to be
brought within 20 days as set out in Rule 31(2)(b) but within a
reasonable time. Mr
Olivier invoked the following dictum at 1042 F-H
in the above case for his submission:
“Thus, under
the common law, the Courts of Holland were, generally speaking,
empowered to rescind judgments obtained on default
of appearance, on
sufficient case shown. This power was entrusted to the discretion of
the Courts. Although no rigid limits were
set as to the circumstances
which constituted sufficient cause (cf examples quoted by Kersteman
(op cit sv defaillant) the Courts
nevertheless laid down certain
general principles, for themselves, to guide them in the exercise of
their discretion. Broadly speaking,
the exercise of the Court's
discretionary power appears to have been influenced by considerations
of justice and fairness, having
regard to all the facts and
circumstances of the particular case. The onus of showing the
existence of sufficient cause for relief
was on the applicant in each
case, and he had to satisfy the Court, inter alia, that there was
some reasonably satisfactory explanation
why the judgment was allowed
to go by default. It follows from what I have said that the Court's
discretion under the common law
extended beyond, and was not limited
to, the grounds provided for in Rules 31 and 42 (1),..”
25. The Wepeners
aver that they consulted with their counsel on 12 August 2013 with a
view to launching this application. They gathered
the necessary
documents such as the application in terms of Rule 46, bank
statements, proof of payments and the like which they
provided to
their counsel on 23 August 2013. This application was served and
filed on 28 August 2013. Assuming that Rule 31 applied,
if days were
to be reckoned from 28 June 2013, date on which the order was made,
the application would be 22 days late but if days
were to be counted
from the date the writ was served on the Wepeners, that is on 16 July
2013, they would be about 10 days out
of time with their application.
The Wepeners do not say when they became aware of the order.
Nevertheless, in my view, the period
of delay is insignificant and
condonable.
26. Ms Sieberhagen
contended that the Wepeners cannot challenge the judgment given by
Erasmus AJ because they acquiesced in it and
therefore their right to
have same rescinded and set aside has become perempted. In my view,
the question of acquiesce in the judgment
is interrelated with the
enquiry whether the Wepeners established good cause and therefore the
two issues need to be dealt with
under the same rubric. The doctrine
of peremption was enunciated as follows in Standard Bank v Estate Van
Rhyn
1925 AD 266
at 268.
“It comes to
this, that if an unsuccessful litigant by unequivocal conduct,
inconsistent with an intention to appeal, shows
that he acquiesces in
the judgment, then he cannot continue to prosecute his appeal. The
principle was stated in Daner’s
case (1920, A.D. p. 594), as
follows:-
‘if the
conduct of an unsuccessful litigant is such as to point indubitably
and necessarily to the conclusion that he does
not intend to attack
the judgment, then he is held to have acquiesced in it. But the
conduct relied upon must be unequivocal and
must be inconsistent with
any intention to appeal. And the onus of establishing that position
is upon the party alleging it. In
doubtful cases acquiescence, like
waiver, must be held non-proven’.
This is the
doctrine. If a man has clearly and unconditionally acquiesced in and
decided to abide by the judgment he cannot thereafter
challenge it.”
27. The Wepeners
state that they did not oppose the application because their legal
advisor, Mr Sassin, informed them that this
may be an exercise in
futility due to the fact that the Bank had already obtained an order
from the Registrar declaring their property
executable; that they had
to avoid costs; that negotiations were underway and the likelihood
existed that the execution process
could be brought to a halt.
28. Mr Olivier
argued that an attorney’s negligence may not be imputed on his
client. He contended that irrespective of the
advice the Wepeners
received and even if the Court were to find that they failed to
establish good cause they have a bona fide
defence on merits.
29. In Hlatswayo v
Mare and Deas
1912 AD 242
at 253, in respect of an application to
re-open a default judgment Solomon J held:
“If therefore,
the party against whom judgment had been given had once acquiesced in
it, his right to re-open it is lost.
So far there is no
difficulty about the law, but then the important question arises as
to what is meant by a party to an action
acquiescing in the judgment.
In my opinion the effect of the authorities on this subject is to
show that when once a party to an
action has done an act from which
the only reasonable inference that can be drawn by the other party is
that he accepts and abides
by the judgment, and so intimates that he
has no intention of challenging it, he is taken to have acquiesced in
it. I do not think
that in order to show acquiescence on the part of
any person it is necessary to prove an agreement between the parties
that the
appeal should be abandoned; or that his conduct has been
such as to estop him from denying that he has acquiesced in the
judgment:
or even that he has in fact abandoned any intention of
appealing, provided only that his conduct has been such as to lead to
the
clear conclusion that he does not intend to assail the judgment.”
30. In Maujean t/a
Audio Video Agencies v Standard Bank of SA Ltd
1994 (3) SA 801
(C) at
804C-E the Court made the following pronouncement:
“It is clear
on authority that a defendant who knows that default judgment is to
be taken against him and does not demur but
allows the plaintiff to
take his course, is presumed to be in wilful default and is not
entitled to rescission of the judgment.
In this Division there are
the decisions of Hendricks v Allen
1928 CPD 519
(Gardiner JP and
Watermeyer J); Chedburn v Barkett
1931 CPD 421
(Gardiner JP and
Sutton J) and Newman v Ayten
1931 CPD 454
(Gardiner JP and Sutton J)
to the effect that, in the words of Gardiner JP in Hendricks v Allen
at 521:
'If he knows that a
case is coming on, and whatever his motive, deliberately refrains
from entering appearance, then it seems to
me there is wilful
default: His reason need not be, to my mind, that he knows he has no
defence; he may have some other motive,
but, knowing that he is
summoned to appear, if he deliberately fails to enter an appearance,
from whatever motive, it seems to
me there is wilful default. As my
brother Watermeyer points out to me, to quote the words of Bowen LJ,
if he knows what he is doing,
and intends what he is doing, and is a
free agent; if he knows he is neglecting the summons and intends to
neglect the summons,
then there is wilful default.'
31. Ms Sieberhagen’s
argument that the Wepeners acquiesced in the judgment is persuasive.
There is no doubt that from the
time that the summons was served on
them they have shown no interest in defending the matter
notwithstanding personal service of
numerous legal processes.
32. Mr Olivier
argued that primarily the basis of this application is that the
relevant circumstances were not placed before Erasmus
AJ and that she
did not properly consider all those circumstances that were placed
before her. This sounds more like an argument
in an appeal as opposed
to a rescission of a judgment. He contended further that the
applicants serviced their bond regularly although
they made payments
belatedly. Therefore, it was argued, the Court should not have
declared their property executable. He further
argued that the DCDPA
was not placed before Court when it considered the Bank’s
application and that had this agreement been
placed before the Court
it could have come to a different conclusion.
33. The Bank
concedes that in its application in terms of Rule 46 it did not deal
with the DCDPA because in its view it was irrelevant
because the
Wepeners failed to comply with same. In any event, it argued that
when it obtained the judgment the full amount of
the debt was due and
payable. In Lodhi 2 Properties Investments CC and Another v Bondev
Developments (Pty) Ltd
2007 (6) SA 87
(SCA) at 94 para 25 it was
held:
“[25] However,
a judgment to which a party is procedurally entitled cannot be
considered to have been granted erroneously
by reason of facts of
which the Judge who granted the judgment, as he was entitled to do,
was unaware, as was held to be the case
by Nepgen J in
Stander[Stander and Another v Absa Bank
1997 (4) SA 873
(E)]. See in
this regard Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills
(Cape)
2003 (6) SA 1
(SCA) ([2003]
2 All SA 113)
in paras 9 –
10.”
The learned judge
proceeds as follows at 95 para 27:
“[27]
Similarly, in a case where a plaintiff is procedurally entitled to
judgment in the absence of the defendant the judgment
if granted
cannot be said to have been granted erroneously in the light of a
subsequently disclosed defence. A Court which grants
a judgment by
default like the judgments we are presently concerned with, does not
grant the judgment on the basis that the defendant
does not have a
defence: it grants the judgment on the basis that the defendant has
been notified of the plaintiff's claim as required
by the Rules, that
the defendant, not having given notice of an intention to defend, is
not defending the matter and that the plaintiff
is in terms of the
Rules entitled to the order sought. The existence or non-existence of
a defence on the merits is an irrelevant
consideration and, if
subsequently disclosed, cannot transform a validly obtained judgment
into an erroneous judgment.”
34. Mr Wepener
states in the Founding Affidavit that in terms of the DCDPA the
payment to the Bank was to be made on the date he
received his
salary. Belatedly, in his Replying Affidavit he maintains that one Ms
Van Dieman, a Bank official, was informed that
Mr Wepener did not
earn a monthly salary but worked on a commission basis and that his
commission was not always paid on the first
of every month with the
result that the debit order put into effect on the first day of every
month was not feasible. Mr Wepener
also refers to a letter dated 23
August 2013, annexure “DJ3”, from his legal advisor
directed to the Bank’s attorneys
in which it is denied, inter
alia, that the debit order payment was a material term of the DCDPA.
What Mr Wepener states is clearly
irreconcilable with paragraph 3.2
of the DCDPA (see para 11.6 above) and the debit order authorisation
form which makes it plain
that he has selected the first day of each
month in respect of which the debit order is to be processed.
35. In my view, in
terms of clause 12.3 of the DCDPA, insofar as the Wepeners were in
default of payment, the Bank was entitled
without notice to them to
proceed and claim immediate repayment of the full outstanding balance
or to terminate the arrangement.
The fact that the Bank did not
contact them after the lapse of the six months of the DCDPA for
possible review of the repayment
does not advance their case because
by that time they were in default of payment. They were also in
default of the main agreement.
Clause 19 of the mortgage bonds reads:
“Any failure
by the Bank to exercise its rights in terms of this bond and any
indulgence allowed to the mortgagor shall not
operate as a waiver or
abandonment by the Bank of any of its rights hereunder”.
Clause 27.3 thereof
stipulates:
“No latitude,
extension of time or indulgence which may be given or allowed by the
Bank to the mortgagor in respect of any
payment provided for in this
bond or the performance of any other obligations hereunder shall
under any circumstances operate as
a waiver or a novation of, or
otherwise affect any of the Bank’s rights in terms of or
arising out of this Bond, or preclude
the Bank from enforcing, at any
time and without notice, strict and punctual compliance with each and
every provision or terms
hereof”
36. The Wepeners
explained that the property in issue is their primary residence. They
reside with their 6 year old daughter and
that Ms Wepener is
unemployed. Mr Wepener further says that he is only left with R10
000.00 as disposable income with which to
pay off the bond. Despite
this, he maintains that he is in a position to pay the amount R12
000.00 as per the lapsed DCDPA. He
states that the couple’s
original monthly obligation towards the Bank was R8 800.00. The
Wepeners maintain that if they lose
their primary residence they will
be out in the street. In Standard Bank of South Africa Ltd v
Saunderson and Others
2006 (2) SA 264
(SCA) at 269 paras 2-3 the
Court held:
“[2] A
mortgage bond is an agreement between borrower and lender, binding
upon third parties once it is registered against
the title of the
property that upon default the lender will be entitled to have the
property sold in satisfaction of the outstanding
debt. Its effect is
that the borrower, by his or her own volition, either on acquiring a
house or later, when wishing to raise
further capital, compromises
his or her rights of ownership until the debt is repaid. The right to
continued ownership, and hence
occupation, depends on repayment. The
mortgage bond thus curtails the right of property at its root, and
penetrates the rights
of ownership, for the bond-holder's rights are
fused into the title itself.
[3] The value of a
mortgage bond as an instrument of security lies in confidence that
the law will give effect to its terms.”
37. See also ABSA
Bank Ltd v Petersen
2013 (1) SA 481
(WCC) at 495-496 para 34 and
authorities quoted therein.
38. It is important
to mention that Standard Bank of South Africa Ltd v Saunderson and
Others (supra) was overruled by the ConCourt
in Gundwana v Steko
Development and Others
2011 (3) SA 608
(CC) only to the extent that
it held that a Registrar is constitutionally competent to make
execution orders in respect of immovable
property when granting
default judgment in terms of Rule 31(5)(b). In the Gundwana case the
ConCourt stated authoritatively as
follows at 625 paras 48-49 with
regard to a default judgment vis-a-vis the issue of a primary
residence defence:
“[48] An
agreement to put one's property at risk as security in a mortgage
bond does not equate to a licence for the mortgagee
to enforce
execution in bad faith.
[49] I conclude that
the willingness of mortgagors to put their homes forward as security
for the loans they acquire is not by itself
sufficient to put those
cases beyond the reach of Jaftha. An evaluation of the facts of each
case is necessary in order to determine
whether a declaration, that
hypothecated property constituting a person's home is specially
executable, may be made. It is the
kind of evaluation that must be
done by a court of law, not the registrar. To the extent that the
High Court Rules and practice
allow the registrar to do so, they are
unconstitutional.”
The Court proceeded
as follows at 626 para 54:
“[54] In
Jaftha, Mokgoro J, before listing some relevant factors that needed
to be considered in judicial oversight of the
execution process,
warned that 'it would be unwise to set out all the facts that would
be relevant to the exercise of judicial
oversight'. Mindful of that
warning, I would merely add the following. It must be accepted that
execution in itself is not an odious
thing. It is part and parcel of
normal economic life. It is only when there is disproportionality
between the means used in the
execution process to exact payment of
the judgment debt, compared to other available means to attain the
same purpose, that alarm
bells should start ringing. If there are no
other proportionate means to attain the same end, execution may not
be avoided.”
39. The papers
demonstrate overwhelmingly that there have been considerable
indulgences afforded to the Wepeners by the Bank in
an effort to find
solutions towards the settlement of their debt. It also shows clearly
that they were not always appreciative
of the Bank’s
magnanimity and created their own way of effecting payment contrary
to what they agreed upon with the Bank.
At their current rate of
payment and the proliferating interest the Wepeners will only sink
deeper into debt as has been the case
for a lengthy period.
40. In the final
analysis I am satisfied that the Wepeners did not establish good
cause and have no reasonable prospects of success
or a bona fide
defence at a hearing in due cause. Their application stands to be
dismissed. Costs on an attorney and client scale
are provided for in
the loan agreements and/or the three mortgage bonds and should
therefore follow.
ORDER:
1. The application
for rescission of Judgment is dismissed with costs on an attorney and
client scale.
MV PHATSHOANE
JUDGE
For the
applicants: Adv A.D. Olivier
instructed by
Haarhoffs Inc
For the
respondent: Adv A.S. Sieberhagen
instructed by
Duncan & Rothman Inc