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[2012] ZAFSHC 208
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Nophale v ABSA Bank Ltd and Others (489/2012) [2012] ZAFSHC 208 (21 June 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case no:
489/2012
In the matter between:
NONHLUPHEKO SINA
NOPHALE
...............................................
Applicant
and
ABSA BANK LIMITED
.....................................................
First
Respondent
KHELETSO PETRUS
KHUTLANE
.............................
Second Respondent
MASEBOLAI LYDIA
KHUTLANE
...................................
Third
Respondent
SHERIFF,
BLOEMFONTEIN EAST
..............................
Fourth
Respondent
REGISTRAR OF DEEDS
.................................................
Fifth
Respondent
DELIVERED BY:
SNELLENBURG, AJ
HEARD:
24
MAY 2012
DELIVERED:
21 JUNE 2012
[1] This is an
application for
(i) the rescission of a
default judgment granted in terms of Uniform rule 31(5)(b);
(ii) an order that the
transfer of immovable property pursuant to the judgment be set aside;
(iii) and ancillary
relief.
[2] The first respondent,
ABSA Bank Limited
, summonsed the Applicant,
Mrs Nophale
,
for
(i) payment of the amount
of
R40 883.60;
(ii) interest thereon at
a rate of
14
percent per year, calculated and capitalised in
advance from
18 February 2009
to date of payment in full;
(iii) an order to have
the immovable property decribed as
Erf 15190, Mangaung, district
BLOEMFONTEIN
,
Free State Province
, also known as
15190
Swanepoel Street, Bloemanda, BLOEMFONTEIN
[the immovable
property] declared specially executable; and
(iv) cost in the amount
of
R250.00
plus Sheriff fees in the amount of
R174.99
.
[3] The first
respondent’s cause of action is based on the applicant’s
failure to comply with her obligations in terms
of an agreement,
entered into during
1987
, between the applicant and the first
respondent’s predecessor in title,
Allied Building Society
,
in terms whereof the loan was extended to the applicant to purchase
the immovable property described as
Erf 15190, Mangaung, district
BLOEMFONTEIN
,
Free State Province
, also known as
15190
Swanepoel Street, Bloemanda, BLOEMFONTEIN
. The loan was secured
by a mortgage bond registered over the said immovable property. In
terms of the allegations in the particulars
of claim the applicant
had defaulted in her monthly payments, as a result whereof the total
outstanding balance as on
18 February 2009
became immediately
due and payable.
[4] Service of the
summons was effected on the Applicant on
28 April 2009
by
service thereof on the applicant’s daughter in the temporary
absence of the applicant at the immovable property, also being
the
domicilium citandi et executandi
. The applicant did not defend
the matter, where after the first respondent applied for default
judgment in terms of the provisions
of Uniform rule 31(5), the same
which was duly granted by the court registrar on
20 August 2009
.
[5] It is this judgment
that the applicant seeks to set aside.
[6] On
26 August 2009
a writ against immovable property was issued by the court registrar,
in lieu of the execution order, the same which was duly served
on the
applicant in person at the said
domicilium
address on
11
September 2009
.
[7] After attachment of
the said property it was sold to the second and third respondents by
public auction on
23 October 2009
. The immovable property was
transferred and registered in the said respondents’ names on
8
November 2010
. The second and third respondent purchased the said
immovable property for the sum of
R160 000.00
. They
borrowed
R130
000.00
of the said purchase price
from the first respondent and the loan was secured by way of mortgage
bond registered over the immovable
property.
[8] The Applicant applies
for an order in the following terms:
“
(a)
That, non-compliance with Rules of the Court relating to time limits
and/or late lodgement of the application shall be condoned;
(b) That, the default
judgment granted by the Registrar of the Court against the Applicant
in favour of the First Respondent on
20 August 2009 under case number
1865/2009 shall be rescinded and/or set aside;
(c) That, the
attachment and the subsequent judicial sale of the residential
property known as Erf 15190, Mangaung, district Bloemfontein,
Free
State Province, also known as 15190 Swanepoel Street, Bloemanda,
Bloemfontein by Fourth Respondent to Second and Third Respondent,
acting at their (sic the) behest of First Respondent, shall be
declared null and void and be set aside;
(d) That, the
registration of transfer by Fifth Respondent under title deed
T14965/2010 of the residential property referred to
in prayer (c), to
Second and Third Respondent, be declared null and void and thereby
set aside;
(e) That, Fifth
Respondent shall be directed to reverse the aforesaid registration of
transfer and revert ownership and/or title
in respect of the
residential property mentioned in prayer (c) to the Applicant;
(f) That, the
Applicant shall be liable for costs of the application, save in the
event of opposition by any of the Respondents.
”
[9] The application is
opposed by the first respondent and also by the second and third
respondents. The first respondent opposes
the application
in toto
,
whilst the second and third respondents only move for an order that
the relief set out in paragraphs (c), (d) and (e) of the notice
of
motion be dismissed.
[10] It is apposite to
firstly deal with the court registrar’s order that the
immovable property be declared specially executable.
[11] Execution against
immovable property which is the home of the judgment debtor, without
any judicial oversight in terms of the
provisions of section 66(1)(
a
)
of the Magistrate’s Court Act, 32 of 1944 [Magistrate’s
Court Act], was declared unconstitutional by the Constitutional
Court
in
JAFTHA v SCHOEMAN AND OTHERS; VAN ROOYEN v STOLTZ AND OTHERS
2005(2) SA 140 (CC) [
JAFTHA
]. The Constitutional Court
ordered that the defect in section 66(1)(
a
) of the
Magistrate’s Court Act be remedied by reading in the words ‘
a
Court, after consideration of all relevant circumstances, may order
execution
’ before the words ‘against immovable
property of the party’ in section 66’.
[12] Admittedly the
JAFTHA
-judgment gave rise to divergent judicial
interpretation, specifically with regards to the power of the court
registrar in terms
of Uniform rule 31(5) to order execution against
immovable property. The Supreme Court of Appeal however held, in
STANDARD BANK OF SOUTH AFRICA LTD v SAUNDERSON AND OTHERS
2006 (2) SA 264
(SCA) [
SAUNDERSON
] that, although the
issue did not strictly arise in that matter, the court registrar
could order execution of immovable property
which is the home of a
judgment debtor. A practice direction was however issued by the
Supreme Court of Appeal to the effect that
from date of that
judgment, in any summons initiating action in which the plaintiff
claims relief that embraces an order declaring
immovable property
executable, the summons shall inform the defendant as follows:
“
The
Defendant’s attention is drawn to Section 26(1) of the
Constitution of the Republic of South Africa which accords to
everyone the right to have access to adequate housing. Should the
Defendant claim that the order for execution will infringe that
right, it is incumbent on the Defendant to place information
supporting that claim before Court.
”
[13] The Constitutional
Court had the final say in
GUNDWANA v STEKO DEVELOPMENT AND
OTHERS
2011 (3) SA 608
(CC) [
GUNDWANA
], where
it was held unconstitutional for the court registrar to declare
immovable property specially executable when ordering default
judgment under rule 31(5) of the Uniform rules of Court to the extent
that this permits the sale in execution of a person’s
home. The
judgment specifically overruled the
SAUNDERSON
-judgment
to the extent that it had held that the registrar was
constitutionally competent to make execution orders when granting
default judgment in terms of rule 31(5)(b).
[14] In
GUNDWANA
,
Froneman, J
held [at para 53] that the constitutional
considerations do not challenge the principle that a judgment
creditor is entitled to
execute upon the assets of a judgment debtor,
in satisfaction of a judgment debt sounding in money. What it does is
to caution
courts that, in allowing execution against immovable
property, due regard should be taken of the impact that that may have
on judgment
debtors who are poor and at risk of losing their homes.
If the judgment debt can be satisfied in a reasonable manner, without
involving
the drastic consequences, then an alternative course should
be judicially considered before granting execution orders. The Court
furthermore reiterated 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.
[15] The court order in
GUNDWANA
placed no limit on the retrospectivity of the
order. That however does not entail that all transfers made
subsequent to invalid
execution sales are automatically invalid. It
is apposite to quote the remarks of
Froneman
J, with regards
to the effect of the retrospectivity of the declaration, as it is
particularly relevant to the relief that the
applicant claims:
“
[58]
There may be fear that the decision in this matter will lead to a
large-scale legal uncertainty about its effects on pass matters,
where homes were declared specially executable by the Registrar, and
sales in execution and transfers followed. The experience
following
JAFTA may be an indication that this fear is overstated. It must be
remembered that these orders were issued only where
default judgments
were granted by the Registrar. In order to turn the clock back in
these cases, aggrieved debtors will first have
to apply for the
original default judgment to be set aside. In other words, the mere
constitutional invalidity of the rule, under
which the property was
declared executable, is not sufficient to undo everything that
followed.
1
In
order to do so the debtors will have to explain the reason for not
bringing the rescission application earlier, and they will
have to
set out a defence to the claim for judgment against them
.
2
It
may be that, in many cases, those aggrieved may find these
requirements difficult to fulfil.
[59] From what has been
stated above, in relation to the legitimacy of resorting to execution
in order to obtain satisfaction of
judgment debts sounding in money,
and that only deserving cases would justify other means to satisfy
the judgment debt, it follows
that a just and equitable remedy,
following upon the declaration of unconstitutionality, should seek to
ensure that only deserving
past cases benefit from the declaration. I
consider that this balance may best be achieved by requiring that
aggrieved debtors,
who seek to set aside past default judgments and
execution orders granted against them by the Registrar, must also
show,
in
addition to the normal requirements for rescission
,
that a
Court, with full knowledge of all relevant facts existing at the time
of granting default judgment, would nevertheless have
refused leave
to execute against specially hypotheticated property that is the
debtor’s home
.
[60] Once these hurdles
have been cleared,
and
it is determined that special execution should not have been allowed,
the question of the effect of invalid execution sales
and subsequent
transfers will have to be considered as a next step
.
It is not possible to lay down inflexible rules to deal with all the
permutations that may arise in these cases. Existing legal
principles
and rules will be sufficient to deal with most cases in a just and
equitable manner.”
My
underlining.
[16] It is efficacious in
matters like these to keep in mind the object of judicial oversight,
namely to determine whether the rights
in terms of section 26(1) of
the Constitution are implicated.
MKHIZE
v UMVOTI MUNICIPALITY AND OTHERS
2012
(1) SA 1
(SCA) at para. 26. As stated in the
MKHIZE
-matter
by
Malan,
JA
applying
the
JAFTHA
-principle
does not mean that all past executions in which there was no enquiry
are rendered invalid. Once again, the validity of
such executions
will depend on circumstances of each case. Judicial oversight is
constitutionally required so that a judicial officer
can ‘
engage
in a balancing process
’
and
‘
consider
all the relevant circumstances of a case
’
to
determine whether there is good cause to order execution against
immovable property concerned.
[17] Willingness of
mortgagers to put their homes for the security of loans they acquire
is not but self-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.
3
[18] The requirements
that the applicant in this matter has to meet, are therefore to show
good cause:
(a) by giving a
reasonable explanation of her default;
(b) by showing that her
application is made
bona fide
;
(c) by showing that she
has a [prima facie]
bona fide
defence to the plaintiff’s
claim, which
prima facie
has some prospect of success.
COLYN
v TIGER FOOD INDUSTRIES LTD T/A MEADOW FEED MILLS (CAPE)
2003
(6) SA 1
(SCA), para. 11;
(d) by giving a
sufficient explanation why the application is only brought at this
stage;
(e) by showing that a
Court, with full knowledge of all relevant facts existing at the time
of granting default judgment, would
nevertheless have refused leave
to execute against specially hypotheticated property that is the
debtor’s home. (
GUNDWANA,
supra
para 59)
[19] Only after all the
requirements in para [18] have been met, and it is thus determined
that the execution should not have been
allowed, that the next phase
of the enquiry, relating to the effect of the invalid execution sales
and subsequent transfers, commences.
This means that even where the
applicant meets all the requirements for rescission, the court may
still refuse to set aside the
execution in light of consequences
flowing from transfers subsequent to the invalid execution. This
comprises that the court needs
to exercise its discretion judicially,
in light of the specific circumstances of the case.
[20] The distinction
needs to be made between the explanation required for default to
defend the action as referred to in para [18(a)]
above, and the
explanation for the fact that the application for rescission is only
brought at this stage, as referred to in para
[18(d)]. The
explanation for default to defend the action obviously only relates
to the period prior to the judgment being granted
as result of a
failure to either give notice to defend or of filing a plea. The
explanation required in terms of para [18(d)] should
explain the
entire delay from judgment until the time when the rescission
application is made.
[21] It remains to
consider whether the applicant has met the requirements to rescind
the judgment granted in her absence by the
Registrar.
[22] As has been
mentioned above, the summons was served on the applicant on
28
April 2009
.
[23] The applicant says
that, although she cannot recall the names and particulars of the
employees of the first respondent whom
she approached to make
arrangements to remedy the said default, they informed her that the
matter would be referred to the relevant
office within
ABSA,
whereafter they would revert to her with a response. She says
that she
bona fide
believed that, in light of the
“negotiations” that had ensued, it was not necessary for
her to enter appearance to
defend.
[24] The first respondent
denies that it made an arrangement or entered into negotiations with
the applicant. It admits that the
applicant, represented by Lesaka
Legal Advisors, indicated on the 3
rd
of April 2009, that
she was desirous to make arrangements to pay the amount of the arrear
instalments outstanding at that stage,
to wit R8218.72, before the
end of April 2009. This was before the summons was issued or served.
Two aspects emerge from these
facts. Firstly, the fact that the first
respondent proceeded to issue summons is indicative of the fact that
it did not accept
the proposed arrangement. Secondly, the bond
provides that upon failure to pay monthly instalments any outstanding
amounts would
immediately become due and owing. The applicant had
been in default with several months’ instalments at that stage.
I will
revert to this aspect as it is also relevant when evaluating
the prospects of success with the
bona fide
defence.
[25] Contrary to the
first respondent’s denial that the applicant had made the
payment that she had proposed, the applicant
appended a deposit slip
to her replying affidavit evidencing, at least
ex facie
the
document, that the amount was indeed deposited on 30 April 2009. The
account number on the deposit slip corresponds with the
account
number that appears on the statements of the home loan account,
appended to the first respondent’s answering affidavit.
It
appears therefore, at least
prima facie
, that the payment was
made. That however does not dispose of this part of the enquiry, as
the payment was made two days after the
summons was served and it
would not have purged the applicants default. It appears that the
applicant was advised, during
May 2009
, that the payments were
again in arrears with
R1864.56
.
[26] It is not the
applicant’s case that she had made any further payments before
the default judgment was entered. The question
remains, has the
applicant explained her delay to defend the matter sufficiently so
that the court can understand how it came about.
[27] The applicant does
not explain what transpired after the payment on her version. She
fails to deal with the letter of demand
during May 2009. No further
correspondence from her legal advisors is appended. She seems to rely
solely on the April payment for
support that she was under the
impression that the first respondent would revert regarding the
proposed arrangements. That can
however not be. Those arrangements,
on her version, were made well in advance of the summons. No details
appear regarding when,
where and to whom these enquires were directed
on which she relies. What stands undisputed is the fact that she
failed to make
any further payments until after the judgment had
already been granted.
[28] The applicant
already had the benefit of legal advice prior to service of the
summons and it raises some concern that she fails
to meaningfully
respond and deal with the events after the payment. As the papers
stand, the applicant has not even disclosed what
the arrangements
would have comprised of. The explanation is anything but sufficient
to fully explain the delay to defend the matter.
[29] The requirements for
rescission are not to be considered in isolation. The inadequacy of
the explanation for the applicant’s
default may well justify a
refusal of rescission on that account unless, perhaps, the weak
explanation is cancelled out by the
defendant being able to put up a
bona fide defence which has not merely some prospect, but a good
prospect of success.
COLYN
supra
para 12;
MELANE
v SANTAM INSURANCE CO LTD
1962
(4) SA 531
(A) at 532;
CHETTY
V LAW SOCIETY, TRANSVAAL
supra
(fn 22) at 767J - 769D.
[30] The applicant’s
bona fide
defence to
the first respondent’s claim sounding in money, is premised
solely on the contention that the 30 April 2009 payment
would have
satisfied the arrears on the loan. That is clearly not correct.
Notwithstanding the payment, on her version, the instalments
were
still in arrears at that time, namely when summons was served. The
fundamental problem for the applicant regarding the judgment
for
payment of the balance owing on the loan, is the fact that on her own
evidence she failed to make any further payments after
April 2009.
The judgment was only granted during August 2009. At best for the
applicant she would have been in arrears with her
instalments for at
least 5 months and the whole of the outstanding balance would in any
event be due and payable. The first respondent
was and would have
been entitled to a judgment against the applicant. There can be no
dispute about that. The fact that a payment
that did not purge the
default, seems not to have been taken into consideration regarding
the applicant’s indebtedness, does
not entitle the applicant to
rescission. It would not have had such material impact on the
judgment amount. To my mind that must
be sorted out when the
reconciliation is done regarding any monies still owing or that is
owed to applicant if the sale is not
set aside.
[31] The
bona fide
defence on which an applicant relies for rescission of the judgment
in money, must have existed when the judgment was entered.
The
applicant has failed to establish a
prima facie
bona fide
defence with any prospects of success, let alone some prospects of
success regarding the judgment sounding in money as well as
the
orders relating to payment of interest and costs.
[32] That still does not
dispose of this matter as at least the order for execution is struck
by the declaration of invalidity.
The court has a discretion at
common law to grant partial rescission.
DE WET AND OTHERS v
WESTERN BANK LTD
1979 (2) SA 1031
(A) at 1041C.
TERRACE
AUTO SERVICES CENTRE (PTY) LTD AND OTHERS v FIRST NATIONAL BANK OF
SOUTH AFRICA LTD
1996 (3) SA 209
(W) at 214E - F.
[33] In
TERRACE
AUTO SERVICES CENTRE
,
supra,
the court, with reference
to
KAVASIS
v SOUTH AFRICAN BANK OF ATHENS LTD
1980
(3) SA 394
(D) and
ZEALAND
v MILBOROUGH
1991
(4) SA 836
(SE) where it was held that a court did not have the power
under rule 31(2)(b) to rescind a judgment partially, refused to
exercise
its discretion at common law to grant only partial
rescission of a judgment. Rubens, AJ held in that case that where a
party disclosed
a
bona
fide
defence
to only part of a judgment, there was no reason why the plaintiff in
such matter should not be afforded all the procedural
advantages he
would have had, had the default not occurred. He accordingly held
that such party was entitled to rescission of the
judgment in its
entirety
.
In
so doing he declined to follow the reasoning in
MAIA
v TOTAL NAMIBIA (PTY) LTD
1991
(2) SA 188
(NM) and
SOS
KINDERDORF INTERNATIONAL v EFFIE LENTIN ARCHITECTS
1993 (2) SA 481
(Nm)
where it was held that rule 31(2)(b) did not preclude the partial
rescission of a judgment.
[34] As was the case in
TERRACE
AUTO SERVICES
,
I am not concerned with rescission in terms of rule 31(2)(b), but
rather with the Court's discretionary power at common law to
set
aside a judgment granted by default. I will add however,
that if the matter had
concerned an application of the rule,
I
would have been inclined to follow the
MAIA
line of cases. The facts
in the present matter illustrate the absurdity to which the full
bench in
SOS
KINDERDORF
referred.
The applicant has no bona fide defence to the part of the judgment
sounding in money. It is only the execution order that
can be
impeached. It would indeed be absurd in this instance to rescind the
judgment in its entirety.
[35] It is therefore
necessary to consider whether the applicant has shown that this is a
case deserving of the benefit of the declaration
of invalidity. As
stated above, the applicant must explain why she only now approaches
the court and, if the explanation is sufficient,
that a Court, with
full knowledge of all relevant facts existing at the time of granting
of the default judgment, would nevertheless
have refused leave to
execute against specially hypothecated property that is the debtor’s
home. Where relief in an application
for rescission will have final
effect, the principles enunciated in
PLASCON-EVANS PAINTS LTD v
VAN RIEBEECK PAINTS (PTY) LTD
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634E –
635C are applicable, at least to that part of the application. The
relief regarding the setting aside of the
execution order and the
subsequent transfer will constitute final relief
vis-à-vis
the second and third respondent.
[36] It is apposite to
point out that, in both the summons as well as the writ of execution
the applicant was referred to her rights
in terms of sections 26(1)
and (3) of the Constitution, as well as to the provisions of Uniform
rule 31(5)(
d
).
[37] The applicant relied
on the unreported decision in this division of
KAKELAME AND
ANOTHER v THOABALA AND OTHERS
[unreported case with FSB case
no 1267/2010] at p.5 where the Court held that, notwithstanding an
obvious and long delay which
was not explained sufficiently, it had
to grant the order for rescission, otherwise it would mean that the
Court would be ratifying
a nullity which in turn meant that the
applicants’ (in that matter) home would be taken from them
because of an irregular
step. The Court further held that the
prejudice that would stem from such an order could not be justified
just because of a long
delay that it took to make the application. In
light of
GUNDWANA
reliance on the judgment under
consideration is misplaced and its
dictum
is no longer
applicable.
[38] The applicant does
not say when she was advised of the constitutional declarator
regarding the invalidity of the execution
order. In light of the case
that the applicant advances that date is not decisive in this matter.
[39] The applicant
explains the delay from date of judgment to date of issuing this
application on the mainly two grounds. Firstly
the applicant relies
on arrangements made with the first respondent, according to her,
after the writ was issued but before the
sale in execution
transpired. The applicant says that in light of the fact that she
inter alia authorised a debit order in favour
of the first
respondent, she was under the impression that the sale, which should
according to her in any event not have taken
place, would be set
aside. Secondly the applicant relies on a lack of funds for not
taking any steps to issue this application
sooner.
[40] The applicant
enjoyed legal assistance from before the summons was served. After
she acquired knowledge of the sale she enlisted
the services of her
present attorneys. They held instructions but, according to the
applicant, she could not advance the funds
at once that was necessary
to make a rescission application.
[41] The period of the
delay needs to be evaluated in stages on the case that the applicant
advances. It is an obvious long delay.
[42] The applicant states
that she and first respondent had an arrangement that the sale in
execution would be cancelled, as she
would
(a) pay a capital amount
of R6559,29 and
(b) authorise a monthly
debit order for payment of
R1 500,00
. According to the
applicant, the payment only needed to be made the afternoon of the
day of the sale. Applicant says that she complied
with these demands
and that the sale should therefore have been cancelled. To this end,
she says that she phoned the first respondent’s
attorneys to
advise them that she was at the bank, and about to make the deposit,
ant that she was just waiting in the queue.
[43] The first respondent
disputes the applicant’s version. It relies on a letter of 1
October 2009 wherein the conditions
are contained for it to consider
cancelling the sale. The conditions comprises of payment of the
arrears; payment of legal costs
to date; payment of an instalment in
advance; proof of payment of all outstanding municipal accounts;
supply of the applicant’s
salary advice and either a written
undertaking to pay the monthly instalments, or authorisation of a
debit order for the amount
of the monthly instalment before 19
October 2009 in absence of which the sale would continue. None of the
conditions were met before
19 October 2009.
[44] The applicant’s
version does not withstand judicial scrutiny. The evidence of Me
Pretorius, supported by her handwritten
notes of telephone
conversations with the applicant on the day preceding as well as the
day of the sale, proves that the applicant
was advised to make at
least payment of the full amount of arrears as well as all the legal
costs to date, before 09h30, in order
to have the sale suspended. The
only reference to a debit order appears from the letter by the first
respondent’s attorneys
of 1 October 2009. The applicant clearly
received the same but failed to comply with the conditions. The
payment by her was not
in terms of the proposed conditions to suspend
the sale and only took place after the sale to the second and third
respondent.
The debit order was likewise only authorised after the
sale. It does not appear that the applicant informed the first
respondent
of the debit order. The arrangement on 22 October 2009 was
clearly another attempt to accommodate the applicant.
[45] The first
respondent’s version is neither farfetched, nor clearly
untenable. The auction was scheduled to commence at
09h30
on
23 October 2009
, as advertised and it would be nonsensical to
suspend the sale without having received confirmation of payment of
the amount as
agreed. The explanation does however explain how it
came about that the sale proceeded. It also evidences a willingness
by the
applicant to stop the sale at that stage. These facts need to
be given proper consideration if it be found that the delay can be
explained.
[46] On
18 November
2009
and subsequent to the sale in execution of the applicant’s
immovable property, the applicant’s current attorneys of
record
addressed a letter to the first respondent’s attorneys,
Messrs
Neumann Van Rooyen Sesele
,
Welkom
, in which it is
recorded:
“
Our
client’s instructions is that the said residential property was
allegedly attached and sold by a public auction following
a default
judgment granted on 20 August 2009 by the Registrar of the High
Court. Our client’s instructions is
(sic
are)
that
the
said judgment is void ab initio and that the
subsequent
attachment and sale
is,
by parity of reasoning,
also
void
.
Our client has instructed us to approach the High Court for the
set
aside of the said sale in execution
.
We
are
accordingly preparing the necessary papers in order to move the said
application without any avoidable delay
.
”
The letter continues to
place on record instructions from the client that she made
arrangements with the first respondent’s
attorneys to make
payment of the amount of
R6 559,29
on
23 October 2009
and that it was expressly agreed that, upon payment of the said
amount, the sale in execution would be cancelled, but notwithstanding
they have been informed of the payment, that the sale in execution
went ahead, contrary to the agreement reached. The letter then
continues:
“
We
therefore shall appreciate if you could favour us with the full names
and address of the third party who purportedly purchased
the said
residential property, as well as the purchase price. We believe that
the said third party has a material interest in the
matter and we
intend to serve him/her with the papers as well.
Lastly, we shall
appreciate if you could advise us in writing if your client is
willing to consent that the registration of transfer
to the third
party be suspended pending the determination of our client’s
said application. If we do not hear from you in
this regard by the
end of business on 23
instant
,
we shall approach the High Court for an appropriate relief.
”
[47] The first
respondent’s attorneys, by way of correspondence dated
respectively
7 December 2009
and
21 January 2010
,
responded to the applicant’s attorneys, informing them that, as
the money was not paid into the bank account on time of
the auction,
the sale continued.
[48] The said letter of
demand leaves no doubt that the applicant was of the opinion that the
judgment granted by the court registrar,
as well as the subsequent
attachment and sale, is
void ab initio
. It is also evident
that the attorneys held instructions, not only to apply to the High
Court to set aside the sale in execution,
but they were, at that
stage, already preparing the necessary papers in order to move the
said application without any
avoidable delay
. The letter of
demand also acknowledges the material interest which the second and
third respondents, as purchasers of the property,
hold in the matter.
[49] Notwithstanding the
said letter of demand, during
November 2009
, the applicant
took no further steps to set aside either the judgment and/or the
subsequent sale in execution until the present
application which was
issued on
6 February 2012
, therefore two years and two months
later.
[50] The second and third
respondents took transfer of the said property on
8 November 2010
,
therefore almost eleven months after the letter of demand. No
correspondence of any nature was addressed to them advising them
of
the applicant’s attitude regarding the sale or of her
intentions. No steps were taken to stop transfer of the immovable
property into the names of the second and third respondents.
[51] The applicant
continued to occupy the property as she still does. The second and
third respondents not only paid the purchase
price for the property,
partially financed by the first respondent and secured by mortgage
bond over the immovable property, but
they also paid the outstanding
municipal debt (arrear taxes and expenses incurred by the applicant)
with regards to the property.
They have made further payments in the
amount of
R13 457.05
, for taxes and expenses which had
accrued whilst the applicant has been occupying the property. The
second and third respondents
have continued to pay the taxes and
expenses in relation to this property.
[52] This application was
motivated by the fact that the second and third respondents issued an
application for the applicant’s
eviction in the Magistrate’s
Court, Bloemfontein. That application was already issued on
24
August 2011
in terms of the provisions of the Prevention of
Illegal Eviction and Unlawful Occupation of Land Act, 19 of 1998.
[53] The applicant’s
explanation for the delay of the two years and two months, since the
letter of demand, is contained in
paragraph 15 of the founding
papers, which reads as follows:
“
The
said residential property is my primary residence and I share same
with my eight children, of which two are minors. I am the
breadwinner
and the whole family is dependent upon me. After I consulted with Mr
Majola he informed me of his financial requirements
to enable that
this matter should be instituted in Court. Unfortunately, I could not
raise the said amount at once and had to pay
in trances from my
relatively meagre income.
The institution of
eviction proceedings also put strain on my finances as I had to
redirect some of the money I had accumulated
towards payment of the
defence of the eviction case.
I did explore the
possibility of representation by the Legal Aid Board, but my
application was unsuccessful, on account of the fact
that I was
employed and earned above the threshold of persons that are entitled
to free legal services. … As indicated herein
before the delay
was occasioned by a multiplicity of factors such as ignorance on my
part, impecuniosity, continued deduction of
monthly instalments, the
eviction application, to mention a few.
”
[54] A lack of finances
(inability to pay) is well recognised as an exculpatory ground which
may, depending on the circumstances
of a matter, constitute a
reasonable explanation for delay or default to act.
[55] The vague statement
that the applicant was advised what the financial requirements were
to enable the matter to be instituted
in Court and that she could not
raise the amount at once, but had to pay in trances from her
“relatively meagre income”,
is simply insufficient to
constitute a reasonable explanation for a delay of more than two
years. The applicant only appended two
salary advices for the time of
the sale in execution. It can be said, that from this it appears that
the applicant had substantial
deductions. But the applicant also
received a yearly bonuses and increases. That does not disclose what
her monthly income was
for the entire period of the delay and/or how
the income is dispersed; what the amounts were that she paid in
“trances”;
where she got the funds to pay to the
attorney; what the estimation of the costs were to institute the
application, in other words
a sufficient explanation to explain the
continued default. Obviously a respondent cannot be expected to
meaningfully respond to
a general and vague averment in this style;
nor is the Court in a position to evaluate not only the explanation,
but the applicant’s
bona fides
. It must be borne in mind
that, at
18 November 2009
, when her attorneys wrote the letter
of demand, they intimated to the first respondent’s attorneys
that they in fact were
already preparing the papers and they were
fortified in their view, that they would make the application without
unavoidable delay.
Financial instructions would at that stage have
been discussed in order for the attorneys to already have started to
prepare the
papers. The respondents, to my mind, also correctly
pointed out that the applicant failed to advise when she allegedly
applied
to the Legal Aid Board for assistance. The eviction
proceedings were only instituted during
August 2011
. It could
not have put strain on the applicant’s finances with regards to
the application for rescission of the default judgment
granted on
20
August 2009
and which she was of the opinion, at that stage
already, was
void ab initio
.
[56] The applicant also
relies on the debit order that was never cancelled as grounds for her
bona fide
belief that the sale had been set aside. But that
statement is at odds with her reliance on the fact that she made
payments in
trances to her attorneys to have the sale set aside.
Unfortunately, the applicant has again not made a proper disclosure.
The first
respondent says it was unaware that the debit order was
going off against the bond account monthly. When it was discovered,
the
necessary adjustments were made and it was refunded together with
the balance after the proceeds of the sale was taken into account.
It
is not clear why the applicant failed to stop the debit order before
May 2011. She has no received the benefit of those payments,
however.
[57] Even if I accept
that the debit order caused financial strain, that payment was
cancelled during May 2011. The applicant would
have had the benefit
of that amount monthly to give her attorneys instructions. That still
leaves an inordinate delay of 9 months
before this application was
made.
[58] From the
aforementioned it follows that the applicant has failed to give a
sufficient explanation for the entire period of
her delay. Whilst
financial inability may well have been a material factor at certain
periods of the delay, there are insufficient
averments or evidence so
as to conclude that it can be a reasonable explanation for the entire
period of the delay. Notwithstanding
that, the respondents challenged
the applicant’s allegations regarding her financial inability;
she failed to deal with the
matter more sufficiently in her replying
affidavit.
[59] The delay should to
my mind also not be evaluated in isolation of the fifth requirement,
although it will be relevant if at
the end a residual discretion must
be exercised.
[60] The Applicant deals
with the fifth requirement in paragraph 17 of her founding affidavit.
She relies on general, generic and
vague statements that the default
judgment would not have been granted if consideration of
circumstances such as the amount of
arrears outstanding as at date of
default judgment; the fact that the property concerned was acquired
partially with the assistance
of a State subsidy; the property was
occupied at all material times; the property was used for residential
purposes and not commercial
purposes; whether or not the applicant
had movables which could satisfy the judgment and the value of the
said property at time
of default judgment, had been taken into
consideration.
[61] During argument, it
was correctly conceded that the applicant had failed to advance
cogent evidence or facts to satisfy the
requirement. It was also
conceded that the property was not acquired partially with assistance
of a State subsidy. The fact that
the property was occupied at all
material times and used for residential purposes obviously brings the
matter within the ambit
of the said invalidity. The applicant submits
that the balance outstanding on the bond was not astronomical high
and was capable
of settlement by other means of debt recovery. The
applicant, however, fails to take the Court into her confidence with
regards
to how this would have been done. Contrary to the submission
by the applicant that the outstanding balance was a substantial
amount
at date that the order for execution was granted. The
applicant does not deal with whether she had movable assets that
could be
satisfied and merely states that the Court would have needed
to consider whether or not she had movable assets which could satisfy
the judgment. The applicant does not place any information before
Court with regards to what the value of the property was at time
of
the default judgment and simply refer to the purchase price during
October
of the next year when the property was eventually
sold.
[62] Save to rely on the
fact that the granting of the order and subsequent sale has been
declared invalid by the Constitutional
Court, the applicant never
states that she would be deprived of access to adequate housing. The
applicant was advised of her rights
in terms of section 26 of the
constitution on more than one occasion and had legal advice
throughout the proceedings. The applicant
was advised of her rights
in terms of Uniform Rule 31(5)(
d
) twice. Yet she did not avail
herself of these rights. I am not convinced that a court hearing the
matter would have been persuaded
not to grant the execution order.
[63] Even if I am wrong
with my aforementioned conclusions in finding that the applicant has
not satisfied the fourth requirement,
the next phase of the inquiry
entails consideration of other relevant circumstances that may
influence a court exercising its discretion
judicially, from still
dismissing the application.
[64] The applicant was
aware of the sale of the property, at the very best for her, on
18
November 2009
, when the letter of demand was sent and the first
respondent was requested to suspend transfer of the property into the
names of
the purchasers, to wit second and third respondents.
[65] The applicant took
no steps to avert the possible prejudice of which she now complains,
notwithstanding the fact that her attention
was repeatedly drawn to
the constitutionally guaranteed rights contained in section 26(1) and
(2) of the Constitution. As stated
above, the applicant had the
benefit of legal advice since before service of the summons and
thereafter. The possible transfer
of her immovable property to the
second and third respondents called for urgent action and her
inaction to take any steps whatsoever
constitutes a compelling
consideration which negates an order that the transfer be set aside.
The applicant had almost eleven months
to stop the transfer and as
already mentioned, has placed little to no information before Court
with regards to why she could not
do so during that timeframe. The
applicant could at least have interdicted the second and third
respondents from taking transfer
of the property.
[66] The consequences of
the orders that the applicant moves for must be considered now, as
the setting aside of the transfer, as
stated above, constitutes final
relief vis-à-vis the second and third respondent. They have
been paying the rates and taxes
with regards to the immovable
property since date of purchase and also had to pay all outstanding
municipal costs and rates and
taxes in order to secure transfer of
the immovable property into their names. The applicant does not deal
with her ability to repay
those amounts which was paid. The fact that
R158 477.34 was repaid to the applicant does not assist herm as
she will have
to repay the amount that was refunded to her if she
succeeds with the application.
[67] There is no
indication that the applicant would be able to reimburse the second
and third respondents for their expenditures.
They are innocent
parties that now also have legitimate interests in this matter. Their
interests could and should never have been
endangered had the
applicant acted when all the facts called for urgent action.
[68] Added to this the
second and third respondents were obliged to institute eviction
proceedings. Notwithstanding that those proceedings
were initiated in
August 2011
the present application was only issued
February
2012
, therefore six months after those proceedings were
initiated.
[69] The matter is to be
distinguished on the facts from cases that would normally serve. In
this matter the applicant has brought
about the consequences by not
acting. Her delay to make the application is inordinate.
[70] On a conspectus of
all the circumstances in this matter, the applicant’s conduct
has been inconsistent with a
bona fide
intention to seriously
protect her rights or to rescind the judgment. In any event, in light
of the consequences of the applicant’s
inordinate delay, I am
not inclined to exercise any discretion in the applicant’s
favour.
[71] In the result the
application is dismissed with costs.
_________________
SNELLENBURG, AJ
APPEARANCES:
On
behalf of the applicant:
Mr M N Majola
Majola
Attorneys
Bloemfontein
On behalf of first
respondent:
Adv C D Pienaar
Instructed by
Naudes
Bloemfontein
On behalf of second and
third respondents:
Adv S J Reinders
Instructed by
Webbers
Attorneys
Bloemfontein
NS/sp
1
OUDEKRAAL
ESTATES (PTY) LTD v CITY OF CAPE TOWN AND OTHERS,
2004
(6) SA 222
(SCA) ([2004]
3 ALL SA 1)
at paras. 27 – 38; and
BENGWENYAMA MINERALS (PTY) LTD AND OTHERS v GENORAH
RESOURCES (PTY) LTD AND OTHERS (CC),
case no
CCT39/10, 13 November 2010) ([2010] ZACC 26), as yet unreported in
paras. 81-85
2
GRANT
v PLUMBERS (PTY) LTD,
1949 (2) SA 470
(O);
CHETTY
v LAW SOCIETY, TRANSVAAL,
1985 (2) SA 756
(A) at
764I-765D; and
DE WET AND OTHERS v WESTERN BANK
LTD,
1979 (2) SA 1031
(A) at 1042
3
Gundwana
v Steko Development and Others
2011 (3) SA 608
(CC), supra para 49