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[2014] ZANCHC 25
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Nagel v Nedbank Ltd (138/13) [2014] ZANCHC 25 (6 October 2014)
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IN
THE HIGH COURT OF SOUTH AFRICA
[NORTHERN
CAPE HIGH COURT, KIMBERLEY]
C
ase
No: 138/13
In the matter between:
NAGEL
APPLICANT
AND
NEDBANK
LTD
RESPONDENT
CORAM:
LEVER AJ
JUDGMENT
Lever
AJ
1.
This is an application for rescission of a
default judgment granted by the Registrar of this court on the 22
nd
of October 2013. The said default judgment was granted by the
Registrar under the provisions of Rule 31 (5) as read with the
provisions
of Rule 46 (1)(a)(ii) of the Uniform Rules of the High
Court. In the heads of argument filed on behalf of the applicant, it
is
evident that applicant relies on Rule 31(2)(b) in her application
for rescission of the aforesaid judgment.
2.
The underlying cause of action for the
respondent’s claim was based on a loan that allowed the
applicant to purchase a residential
property, provided for the
registration of a mortgage bond over the relevant property in favour
of the respondent and provided
that the relevant property was
specially hypothecated and mortgaged as security for the applicant’s
obligations to the respondent
in terms of the said loan agreement.
3.
A second mortgage bond was registered over
the relevant property, also in favour of the respondent, under
similar terms and conditions
as the first mortgage bond.
4.
The relevant Order issued as a result of
the said default judgment provided for: the repayment of the capital
sum in the amount
of R545 084.67; interest thereon in accordance with
the terms of the mortgage agreement; and provided that the mortgaged
property
be declared specially executable.
5.
In her founding affidavit the applicant
contends that the said default judgment only came to her knowledge by
virtue of a writ of
attachment against the relevant immovable
property coming into her possession on the 11
th
November 2013. Thereafter the applicant consulted with her debt
counsellor on the 12
th
November 2013 who obtained copies of the court file. The applicant
then consulted with her attorney on the 13
th
November 2013. The present application for rescission of the said
default judgment was launched on the 18
th
November 2013.
6.
The
factual basis for the rescission application set out by the applicant
in her founding affidavit was, in summary, based on the
allegations
that she had approached the Magistrates Court, Kimberley for an order
under the provisions of the National Credit Act
[1]
(“the Act”) that she was over-indebted and
re-structuring her indebtedness. Such an Order was granted in her
favour on the 31
st
August 2011. For a time she paid the amounts required by the said
re-structuring order. The applicant concedes that she missed
one
months payment under the debt restructuring order. In fact applicant
seems to concede that she missed a second months payment
under the
said order. At the very least, she has succeeded in creating
confusion and doubt in this regard.
7.
The applicant then avers that respondent
brought an application to rescind the debt re-structuring order. She
further avers that
this application was dismissed with costs on the
10
th
September 2012. Thereafter applicant maintains that one month’s
debt review instalment was applied to legal fees and not
paid over to
the credit providers.
8.
Applicant also states that on the 29
th
July 2012 she was admitted to hospital and that she was discharged on
the 3
rd
August 2012. Applicant contends that due to her obligation to pay
legal fees as well as medical expenses due to her hospitalisation
she
was unable to make a payment during August 2012. Applicant then avers
that she paid the amount outstanding for August 2012
on the 15
th
of January 2013.
9.
Applicant then contends that the respondent
proceeded to enforce its claim by way of litigation without giving
notice of termination
of the debt review proceedings in the
magistrate’s court under and in terms of the provisions of
section 86(10) of the Act.
Applicant averred that the Act required
such notice and that consequently, in the absence of such notice, the
respondent’s
litigation to enforce its claim was premature.
10.
Applicant also attacks the order granted by
the Registrar declaring the relevant property specially executable.
She does so on two
grounds. Firstly, that there was no writ against
movables and no return indicating that there were insufficient
movables to satisfy
the judgment debt. Secondly, that the relevant
immovable property is the applicant’s primary residence.
11.
The respondent filed an answering affidavit
and a supplementary answering affidavit.
12.
The applicant then filed a replying
affidavit which revealed that the basis of her application for
rescission had undergone a complete
and fundamental change. The
applicant in reply contends that the original debt re-structuring
order provided that she only had
to pay the respondent R1,371.84 (one
thousand three hundred and seventy one Rand and eighty four cents)
per month. That she voluntarily
increased this amount to R2200.00
(two thousand two hundred Rand) per month and later she voluntarily
increased the amount to R3000.28
(three thousand Rand and twenty
eight cents) per month and again to R3294.00 (three thousand two
hundred and ninety four Rand)
per month. Applicant further contended
that even though she did not make at least one monthly payment, that
as a result of these
voluntary increases in monthly payments to the
respondent overall she has paid the respondent an amount in excess of
the amount
she was obliged to pay the respondent under the debt
re-structuring order for the relevant period and that thereby she was
not
in default of the debt re-structuring order.
13.
At the hearing hereof, the applicant
correctly abandoned the position adopted in her founding affidavit,
namely that the respondent
had to send a section 86(10) notice
terminating the debt re-structuring Order. Ms Stanton who appeared on
behalf of the applicant
also correctly conceded that section 88(3) of
the Act was applicable to the present circumstances. In the light of
these concessions,
it is not necessary to consider much of the
original basis for rescission as set out in the applicant’s
founding affidavit.
14.
In the heads of argument filled on behalf
of the applicant, it is clear that the applicant relies on the
provisions of Rule 31(2)(b)
as the basis for her application to
rescind the relevant default judgment. The provisions of the said
rule place upon the applicant
the burden of establishing “good
cause” for setting aside the relevant default judgment. In any
event the applicant
has not set out a basis for establishing grounds
for rescission under the provisions of Rule 42(1) or the common law.
15.
The applicant’s present contentions
raise four questions for the consideration of this Court. Firstly,
whether the applicant
is entitled to raise the ground for rescission
of the default judgment that she had voluntarily paid more than was
required by
the debt re-structuring order granted by the Magistrates
Court and the despite certain lapses in payment she had cumulatively
paid
more than was required by the Magistrate’s Court Order, in
her replying affidavit for the first time. Secondly, whether
the version applicant now wishes to rely on as the basis for her
rescission application is probable and consistent with the facts.
Thirdly, whether the provisions of section 88(3) of the Act can be
applied in the manner contended for by the applicant on the
facts of
the present case. Finally, after consideration of the preceding three
questions, has applicant established “good
cause” for the
rescission of the relevant default judgment.
16.
In order for the applicant to succeed in
her application for rescission of the relevant default judgment all
four of the questions
set out above will have to be answered in her
favour. If she were to fail on any one of them, then her application
for rescission
must fail.
17.
The Registrar’s order declaring the
property specially executable will be considered separately.
18.
Although the second, third and fourth
questions are somewhat interrelated, for the sake of convenience they
will be considered separately.
19.
In
considering the first question being whether or not the applicant is
entitled to raise both a legal and a factual basis for her
rescission
application in her replying affidavit for the first time, the obvious
point of departure is that in motion proceedings
the affidavits
constitute both the pleadings and the evidence in the matter. An
applicant is obliged to raise all legal and factual
issues necessary
to establish her case in her founding affidavit.
[2]
20.
The applicant is required to establish the
case she relies on in her founding affidavit because the respondent
is entitled to know
what case it has to meet and to be afforded a
fair opportunity to meet that case. Even though the respondent has in
fact dealt
with certain aspects of the applicant’s present
ground for rescission in its answering and supplementary affidavit,
it cannot
be said that the respondent has been afforded an
opportunity to deal with every aspect of the applicant’s
present contentions.
Nor can it be said that in framing its answering
and supplementary affidavits that the respondent was ever afforded
the opportunity
of appreciating the true significance of dealing with
the discrepancies in the cascade ostensibly annexed to the order that
the
Magistrate made. In the absence of such knowledge, it cannot be
said that the respondent has had a fair opportunity of dealing with
the applicant’s present case.
21.
The applicant has failed to establish or
even set out the necessary facts for her present defense and ground
for rescission in her
founding affidavit. Unfortunately, for the
applicant, the matter does not simply end there. The applicant has
placed a version
of events before the court on affidavit under oath
where she stated in her founding affidavit that: “…I was
ordered
to pay the respondent R2 200.00 per month.” In her
replying affidavit also under oath, the applicant does not explain
why
she made the positive averment that she was ordered to pay the
amount of R2200.00 per month in her founding affidavit. In her
replying
affidavit the applicant merely states: “…I
submit that paragraph 9 of my Founding Affidavit did not set out the
situation
sufficiently enough…”. Even though the
relevant annexure to the founding affidavit did not support the said
positive
averment in the founding affidavit, such averment still
constitutes evidence placed before this court under oath. In these
circumstances
the applicant is obliged to explain to this court why
she made such positive contention if it was not correct. An
allegation that
the founding affidavit does not explain the situation
sufficiently, without more, does not suffice in such circumstances.
22.
For the reasons set out above, the
applicant is not entitled to raise for the first time in her replying
affidavit, the ground for
rescission that despite certain lapses in
payment under the Order granted by the Magistrate, cumulatively she
had paid more than
she was ordered to.
23.
The above finding would be sufficient
ground to dismiss the present application, but for the sake of
completeness I will also consider
the other questions set out above.
24.
Turning to the second question, being
whether the version set out by the applicant in her replying
affidavit is probable and consistent
with the facts. The applicant’s
present ground for rescission, is that the Magistrate ordered her to
pay the respondent R
1 371.84 per month and that she had voluntarily
paid more than this amount which resulted in a position where
although she had
missed certain payments, cumulatively she had paid
more than she had been ordered to do by the Magistrate.
25.
When considering this question it is
legitimate to consider the overall manner in which the applicant has
conducted her case. It
is clear from considering the manner in which
the case developed that applicant had misconceived the provisions of
the Act. The
basis for rescission set out in her replying affidavit
was fundamentally different to the basis disclosed in her founding
affidavit.
In these circumstances I cannot escape the conclusion that
the applicant conducted her case opportunistically.
26.
Ms Stanton for the applicant argued that
the cascade annexed as annexure “MD3” to the applicant’s
founding affidavit
correctly reflected the re-distribution order made
by the Magistrate because that cascade bore the stamp of the
magistrate’s
court Kimberley and that the date reflected on
that stamp corresponded with the date on the Order itself being
annexure “MD2”
to applicant’s founding affidavit.
Whereas, she argued the cascade upon which the respondent sought to
rely, being the one
attached to annexure “DH2” to
respondent’s supplementary affidavit did not bear a stamp from
the magistrate’s
court. The cascade being annexure “MD3”
provided for a monthly payment to the respondent in the amount of R1
371.84.
27.
Mr Wessels SC, who appeared for the
respondent, argued that the cascade that correctly reflected the
re-distribution Order issued
by the Magistrate is in fact the one
attached to the Order being annexure “DH2” to
respondent’s supplementary
affidavit. Mr Wessels bases this
submission on two contentions. Firstly, that this is the Order upon
which respondent sought to
review (rescind) the distribution Order
approximately a year after it was originally granted. In support of
this contention he
points out that the relevant cascade bears the
initials of the deponent and the commissioner of oaths and that it
forms an integral
part of the application to review the first
re-distribution Order. Secondly, Mr Wessels submits that the
applicant’s behavior
throughout the relevant proceedings is
consistent with the cascade annexed to “DH2”
correctly reflecting the
Order issued by the Magistrate.
28.
Considering the evidence that emerges from
the application as a whole, it emerges that:
28.1.In
her founding affidavit, the respondent stated positively under oath
that in the applicable cascade the respondent was listed
at position
number 5 in the cascade and that she was “ordered” to pay
the respondent R2 200.00 per month.
28.2.Annexure
“MD3” to her founding affidavit does not support the
above mentioned positive averments in applicant’s
founding
affidavit.
28.3.As
already set out above the explanation given by applicant for the
difference does not suffice in the circumstances.
28.4.The
applicant in the debt re-structuring process is the Debt Counsellor.
The Debt Counsellor has filed a confirmatory affidavit
which formed
part of the applicant’s founding papers. In this confirmatory
affidavit the Debt Counsellor confirms that the
applicant was
“ordered” to pay the respondent R2 200.00 per month.
28.5.The
version that applicant was ordered to pay R2 200.00 per month is
supported by certain correspondence between the Debt Counsellor
and
the respondent. In this regard specific reference is made to:
28.5.1.
annexure “MD8” and “MD8a”,
being a chain of e-mail correspondence, where the respondent seeks
proof that
the applicant was entitled to pay R2 200.00 per month
despite the fact that this did not even cover the interest and that
the capital
sum continued to grow in these circumstances. “MD8a”
in response to the e-mail “MD8” purports to attach
a copy
of the relevant Order. Unfortunately, the Court is not favoured with
a copy of the said attachment to that e-mail.
28.5.2.
Annexure “MD16b” an e-mail
dated 16 June 2013 where the Debt Counsellor states, “The order
was granted 31/08/11
for the amount of R2 200.00 pm. See attaché
(sic).” Again the court has not been favoured with a copy of
the attachment
referred to herein.
28.6.The
Debt Counsellor has not filed a confirmatory affidavit to the
applicant’s replying affidavit. Neither the Debt Counsellor
nor
the applicant have explained why a positive averment was made in
these circumstances that the applicant was ordered to pay
the amount
of R2 200.00 per month if this was not in fact correct.
28.7.The
creditors listed on the cascade being annexure “MD3” are
as follows:
28.7.1.
Call Direct/Direct Axis …
28.7.2.
CT Internasional Finance Devel…
28.7.3.
Holiday Club …
28.7.4.
Nedbank Home Loans/Personal L …
R1 371.84 …
28.7.5.
Select Online (Pty) Ltd …
28.7.6.
Toyota Financial Services …
28.7.7.
Vodacom Service Provider Co …
28.8.The
creditors listed on the cascade annexed to the copy of the Order
being annexure “DH2” to respondent’s
supplementary
affidavit are as follows:
28.8.1.
Bernard Raaff …
28.8.2.
Call Direct/Direct Axis …
28.8.3.
CT Internasional Finance Devel …
28.8.4.
Holiday Club …
28.8.5.
Nedbank Home Loans/Personal L …
R2 200.00…
28.8.6.
Select Online (Pty) Ltd …
28.8.7.
Toyota Financial Services …
28.9.The
difference between the two cascades is that Vodacom Service Provider
Co. has fallen away and Bernard Raaff has been added
to the second
cascade.
28.10.
The applicant has annexed two distribution
accounts for the relevant debt administration to her founding
affidavit. The first one
dated 22 November 2012 annexure “MD8(b)”
to the founding affidavit. The second one dated 11 March 2013
annexure “MD8(c)”
to the founding affidavit. Both of
these distribution accounts include payments to Bernard Raaff and
make no provision for payments
to Vodacom Service Provider Co.
28.11.
One has to assume that the monthly
distribution would be made in accordance with the cascade that formed
part of the Order made
by the Magistrate. There would be no other
legitimate basis for making such distribution. Therefore, the fact
that the distribution
accounts give effect to the cascade attached to
annexure “DH2” to respondent’s supplementary
affidavit is strongly
indicative of the fact that it formed part of
the Order made by the Magistrate.
28.12.
At the hearing of this matter and before
argument commenced the applicant handed in by agreement a schedule of
payments made by
the applicant to the respondent over the period 8
July 2011 to 11 August 2014. In relation to the question presently
under consideration,
the interesting thing is that prior to the
Magistrate issuing the Order being considered, the applicant had
already commenced paying
the respondent monthly installments of R2
200.00 per month. This is clearly evidenced by the said schedule. The
applicant does
not tender any explanation why the Magistrate reduced
this payment in these circumstances.
28.13.
After considering all of the evidence set
out above, I am forced to conclude that applicant’s version
being that she was only
ordered to pay R1 371.84 and that she
voluntarily paid more, which resulted in the position that despite
certain lapses, at
the end of the day she had paid more than required
under the debt re- arrangement order made by the Magistrate, is not
probable,
nor is it consistent with the facts.
29.
Turning
to the third question set out above, Ms Stanton argued that in
applying section 88(3) of the Act, I should follow the approach
of
the Court in the matter of Nedbank Limited v Thompson and Another
[3]
,
where Gautschi AJ stated:
“
In
terms of section 2(1) of the NCA I am enjoined to interpret that Act
in a manner that gives effect to the purposes set out in
section 3.
Section 3 includes as a purpose of the NCA to protect consumers by
“promoting equity in the credit market by balancing
the
respective rights and responsibilities of credit providers and
consumers”. These sections would, I consider, require
me to
interpret the word “defaults” in section 88(3)(b)(ii) to
exclude minor, unwitting and excusable defaults of the
nature which
occurred here, with the result that I would for that reason too find
that the requirements of section 88(3) had not
been met.”
[4]
(references omitted)
30.
In the circumstances that prevailed in the
Thompson case, I would respectfully agree with Gautschi AJ. However,
on the facts of
the present case I have to decide whether the
applicant’s lapses are “minor, unwitting and excusable
defaults”.
31.
The applicant, during 2012, on her own
version did not pay one entire months installment under the
Magistrates re-distribution Order.
Applicant claims that she made up
the shortfall in January 2013. Respondent claims that in fact during
2012 the applicant missed
two months installments. Applicant disputes
this contention. However, as already stated above applicant handed in
a schedule of
payments by consent at the start of proceedings. This
schedule of payments handed in on the applicant’s behalf show
that
in fact in 2012 there were only 10 payments paid by the
applicant. In the context of the facts of the present case these
cannot
be considered minor defaults.
32.
In the context of the facts of the present
case, these cannot be said to be unwitting defaults.
33.
Furthermore, the contentions made that
these were excusable defaults because in the one case they covered
the legal costs of the
review referred to above and in the other
presumably the hospital expenses referred to. In circumstances where
the Magistrate made
a costs Order in the applicant’s favour in
the review application would militate against a finding that
non-payment on that
ground was excusable.
34.
If there was any substance to the
applicant’s contention that she made up the shortfall for
August 2012 in January 2013, one
would have expected to find two
payments or a double payment in the schedule for January 2013. This
is not the case.
35.
In these circumstances, I also cannot
answer the third question in favour of the applicant.
36.
The fourth and final question relates to
the question of whether or not the applicant has shown “good
cause” to rescind
the default judgment. Having regard to what
is set out above I do not believe that applicant has shown good cause
for the rescission
of the relevant default judgment.
37.
Turning now to deal briefly with the Order
made by the Registrar under the provisions of Rule 46(1)(a)(ii)
declaring the relevant
property specially executable. It is evident
that the said Order was made in circumstances where an affidavit was
filed on behalf
of the respondent alleging that the property appeared
to be occupied by tenants. It appears that this allegation was based
on the
contents of the Sheriff’s return of service for the
summons that a certain Mr and Mrs Haai were occupying the house and
that
the applicant had left the address. The only explanation given
by the applicant was that during the month of February 2013 she was
based in Rustenburg part of the time and part of the time based
in Bloemfontein. In these circumstances I cannot find that
the
Registrar ought not to have made the Order declaring the applicant’s
property specially executable.
38.
The applicant has not established a basis
for the rescission of the judgment concerned and her rescission
application is accordingly
dismissed with costs.
_____________________
L.
LEVER AJ
COUNSEL:
FOR
THE APPLICANT: ADV. STANTON
FOR
THE RESPONDENT: ADV. MH WESSELS SC
DATE
OF HEARING: 12 SEPTEMBER 2014
DATE
OF JUDGEMENT: 06 OCTOBER 2014
[1]
34
of 2005.
[2]
Quartermark
Investments (Pty) Ltd v Mkhwanazi and Another
[2014] 1 All SA 22
(SCA) at para [13] and Die Dros (Pty) Ltd v Telefon Beverages CC and
Others
2003 (4) SA 207
(C) at para [28].
[3]
SAFLII
ZAGPJHC 88 (23 April 2014).
[4]
Supra
para. 22.