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[2012] ZAKZDHC 77
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Nebank Ltd v RZT Zelpy 4808 (Pty) Ltd and Others (3591/2012) [2012] ZAKZDHC 77 (8 November 2012)
IN THE KWAZULU-NATAL
HIGH COURT, DURBAN
REPUBLIC OF SOUTH
AFRICA
Case no.: 3591/2012
In the matter between:
NEDBANK LIMITED
..........................................................................................
APPLICANT
and
RZT ZELPY 4808 (PTY)
LTD
(REGISTRATION NO:
2006/016287/07)
...........................................
FIRST
RESPONDENT
THEMBA WELCOM MTETWA
(IDENTITY NO: )
...........................................................................
SECOND
RESPONDENT
GEORGINA MTETWA
IDENTITY NO: )
................................................................................
THIRD
RESPONDENT
JUDGMENT
Date
of Judgment: 08 November 2012
Vahed J:
The applicant seeks an
order evicting the respondents (but essentially the second and third
respondents) from certain immovable
property situated at 15
Greenacre Place, Kloof, KwaZulu-Natal (“the property”).
The application is brought in terms
of the Prevention of Illegal
Eviction from and Unlawful Occupation of Land Act, 19 of 1998
(“PIE”). The respondents
resist that relief. The basis
for their opposition will become clear after I recount briefly the
relevant background facts.
It is common cause or
not seriously in dispute that:-
2.1 During September 2006
the first respondent and the applicant concluded an agreement in
terms of which, against the security
of a mortgage bond over the
property, the applicant lent and advanced the sum of R1 685 500,00 to
the first respondent. In terms
of that agreement the second and third
respondents agreed to bind themselves as sureties and co-principal
debtors, together with
the first respondent, for the repayment of
that debt. In due course the mortgage bond was registered and the
suretyshipagreements
by the second and third
respondentswereconcluded.
2.2 During August 2010
the applicant instituted action against the respondents out of the
KwaZulu-Natal High Court, Pietermaritzburg
under case number
7046/2010, for the repayment of that loan and for an order declaring
the property speciallyexecutable. In that
action it was alleged that
the first respondent had breached the loan agreement thereby
entitling the applicant to proceed as it
did.
2.3 On 28 September 2010
judgment by default was granted against the respondents.
2.4 On 2 December 2010
the respondents were notified of a sale in execution of the property
which was scheduled to take place on
26 January 2011.
2.5 On 26 January 2011
the sale in execution scheduled for that day was cancelled as result
of entreaties made by the second and
third respondentsconcerning the
repayment of the judgment debt. Further correspondence was exchanged
between the parties during
that month.
2.6 On 10 February 2011
the respondents were again notified of a further sale in execution
scheduled for 13 April 2011. There is
a suggestion in the papers that
the second respondent was also advised, both by electronic mail and
telephonically, of that sale,
those communications having taken place
on 31 March 2011.
2.7 On 12 April 2011 an
exchange of correspondence took place with the respondents attempting
to settle the matter with the applicant.
Nothing came of that and on
13 April 2011 the applicant bought the property at the sale in
execution.
2.8 On 2 August 2011 the
property was transferred to the applicant.
In its founding papers
the applicant indicates that it has now sold the property to a third
party to whom it has promised vacant
possession. It cannot deliver
on that promise and comply with its obligation to give vacant
possession because the respondents
remain in occupation of the
property and refuse to vacate it.
The respondents contend
that the judgment taken against them, in default of entry of an
appearance to defend, on 28 September
2010 falls to be rescinded.
They contend further that once that rescission takes place
everything that flowed from the grant
of that judgment, including
the sale to the applicant and transfer to it, and indeed the
subsequent sale by the applicant to
a third party, is of no moment
and falls to be set aside as well.
The facts underlying
that contention appears to be the following:-
On 15 September 2010 the
respondents’ attorney wrote to the applicant’sattorneys
advising them that he had been approached
by the respondents after
receipt of the summons and indicated that the respondents were “in
an unfortunate position”
and as a result thereof made certain
settlement proposals. That letter reflected two indicated methods of
delivery, firstly by
telefax and secondly via a courier service. For
reasons which are not explained, and although the letter is dated 15
September
2010, it was only telefaxed to the applicant’s
attorneys at 15H27 on 27 September 2010. It appears that the courier
may
have delivered a copy of the letter to the applicant’s
attorneys on the previous day.
On 28 September 2010 the
respondents’ attorney wrote to the applicant’sattorneys
indicating that he was anxious to
receive a response to the
settlement proposal. That letter was telefaxed to the applicant’s
attorneys at 15H06 on 29 September
2010.
On the same day the
respondents’ attorney telefaxed a copy of the Notice of
Intention to Defend to the applicant’s
attorneys. That notice
was also forwarded to the Registrar of the High Court in
Pietermaritzburg and to theapplicant’s
attorneys via courier
and it was lodged with the Registrar on 29September 2010 and
physically delivered to the applicant’s
attorneys on 1 October
2010.
On 1 October 2010 the
applicant’s attorneys acknowledged receipt of the letters of
28 September and the Notice of Intention
to Defend of 28 September
but by then default judgment had already been applied for and was
granted on 28 September 2010.
Thereafter
correspondence was exchanged between the parties with a view to
settling the debt and avoiding the sale in execution.
During
thatinteraction there does not appear to have been a suggestion
either from the respondents or from their attorney that
the judgment
had been incorrectly applied for or erroneously granted or that the
respondentsintended applying for its rescission.
Be that as it may, the
respondents now contend that given that interaction at about the
time the judgment was obtained, the respondents
were not in wilful
default of entry of appearance and that therefore the judgment falls
to be rescinded.
That point is taken in
the respondents’ answering papers and indeed,to bolster it,
they have instituted a counter application
asking for the
application to be stayed pending the final determination of their
application in the Pietermaritzburg High Court
for an order
rescinding the judgment.
During argument I was
informed by counsel that the application for rescission had been
launched the previous day and that the
applicant’s counsel had
been furnished with an informal copy of the papers in that
application. Neither side thought it
necessary to disclose the
contents of that application to me and I was not furnished with a
copy of those papers.
Almost the entire
argument that unfolded before me was devoted to whether the eviction
order ought to be granted against the backdrop
of the facts I have
outlined above. In other words the question was whether I ought to
either refuse or stay the application
for eviction pending the
outcome of the rescission application. It followed then that the
argument turned on whether there were
decent prospects of success
with regard to the application for the rescission of the judgment.
The facts reveal that
the notice of intention to defend was received after default
judgment had been entered by the Registrar
in the Pietermaritzburg
High Court.
I pause to mention that
it is obvious that the judgment by default granted by the Registrar
was competent at the time in that
predates it the order of the
Constitutional Court in
Gundwana v Steko Development and others
2011 (3) SA 608
(CC).
On the face of it it
seems to me that the Registrar was quite entitled to enter default
judgment against the respondents because
the Notice of Intention to
Defend had only been delivered after that had taken place. Whether
the respondents were in wilful
default of delivery of that Notice of
Intention to Defend is the real question. There is simply no
explanation on the papers
as to why a Notice of Intention to Defend
was not delivered earlier. Indeed it appears that as early as 15
September 2010 the
respondents’ attorney was alive to the fact
that he had to deliver such notice but sought only to engage in
correspondence,
and then too delayed in transmitting that
correspondence to the applicant’s attorneys. There is no
suggestion in the papers
that some fact or circumstance lead the
respondents attorney to conclude that there was no urgency with
regard to the delivery
of that Notice of Intention to Defend and in
those circumstances must conclude that the delay in delivering the
Notice of Intention
to Defend is something that must be laid at the
respondents’ door. However the enquiry does not end there.
In the intended
application for rescission of the judgment the respondents will have
to demonstrate that they have a bona fide
defence to the applicant’s
action. It is with regard to that second leg of the test that the
respondents’ raised
the defence that they were not favoured
with a Notice in terms of Section 129 of the National Credit Act,
Act 34 of 2005 (“NCA”).
It is common cause that no such
notice was sent to the respondents alternatively, if one was sent it
was sent to the incorrect
address.
That, however, is of no
assistance to the respondents. In my view, on a proper
interpretation of the NCA, the respondents were
not entitled to a
Notice in terms of Section 129 of the NCA. It is clear that the
credit agreement governing the transaction
between the respondents
and the plaintiff is hit by both Sections 4(1)(a) and 4(2)(c) of the
NCA. On the probabilities a mortgage
bond over a property securing a
loan in excess of R1,6 million is suggestive of the fact that it is
more than reasonable to conclude
that the property itself is worth
at least that amount, or probably something more than the amount of
the bond. The threshold
value determined for the applicability of
Section 4 of the NCA is R 1 million and the amounts we are concerned
with here are
well in excess of that threshold value. As first
respondent being a juristic person as referred to in the section,
the NCA does
not apply to it or to the credit agreement (i.e. the
loan agreement) concluded between it and the applicant. It follows
therefore
that the suretyship agreements concluded by the second and
third respondent are agreements hit by section 4(2)(c) and
accordingly
the NCA does not apply to those agreements as well.
Accordingly, there was
no obligation upon the applicant to furnish the respondents with
Notice in terms of Section 129 of NCA
and that defence is bad in
law. That forces me to the conclusion that the respondents do not
enjoy reasonable prospects of success
in the intended rescission
application.
Having reached that
conclusion it is necessary to ascertain whether or not the
respondents have set up any facts or circumstances
which constitute
relevant circumstances entitling me to deny the applicant the relief
it seeks. The respondents have shown no
relevant circumstances.
When the argument was
all but concluded the respondents’ attorney then indicated
that there was nevertheless still a bar
to the applicant being
granted the relief sought. That was so, according to him, because
the applicant had not delivered a Notice
in terms of Section 4(2) of
PIE. It will be recalled from a consideration of the judgment in
Cape Killarney Property Investments (Pty) Ltd v Mahamba and
others
2001 (4) SA1222 (SCA) that a Notice in terms of Section
4(2) of PIE is a necessary precursor to an application for the
eviction
of any person in occupation of residential property.
Indeed, when this
application was launched it was envisaged that such a notice would
be served, the notice being an annexure to
the founding papers and
it being intended that a preliminary order would be sought to
authorise the delivery of that notice.
However, matters overtook
themselves when, upon receipt of the founding papers, the
respondents opposed the application. Affidavits
were exchanged in
the “principle” case and it was completely overlooked
that the applicant had not delivered a Notice
in terms of Section
4(2) of PIE. Section 4(5) of PIE indicates that the purpose of a
Notice in Terms of Section 4(2) is four-fold.
It requires an
applicant to firstly indicate that proceedings were being instituted
for an order for the respondents’ eviction,
secondly to
indicate the date and time that the matter was to be heard, thirdly
to set out the grounds of the proposed eviction
and, finally, to
indicate to the respondents that they were entitled to appear at
court, defend the case and, where necessary,
had the right to apply
for legal aid. The question that then arises at this stage of the
proceedings is this: Have the respondents
been prejudiced in any of
the respects that Section 4(5) was intended to address? I think not.
In
Unlawful
Occupiers, School Site v City of Johannesburg
2005
(4) SA199 (SCA) Brand JA said (at paragraph 22) that
“…
it is clear from the authorities that even where the formalities
required by statute are peremptory it is not
every deviation from
the literal prescription that is fatal. Even in that event, the
question remains whether, in spite of the
defects, the objects of
the statutory provision had been achieved (seeeg
Nkisimane and
Others v Santam Insurance Co Ltd
1978 (2) SA 430
(A) at 433 h –
434 b;
Weenen Transitional Local Council v Van Dyk
2002 (4)
SA 653
(SCA) in para [13])”.
Brand JA went on, in
paragraph 24 of
Unlawful Occupiers
,
to say that
“…the question whether in a
particular case a deficient s 4(2) notice achieved its purpose,
cannot be considered
in the abstract. The answer must depend on what
the respondents already knew.”.
In this matter the
applicant’s failed to deliver the section 4(2) Notice
separately. However a draft copy had already been
served amongst the
founding papers and was already with the respondents when they
delivered their Notice of Opposition and thereafter
delivered their
answering affidavits and counter application. By the time the matter
was argued before me as an opposed motion
they had had all the
benefits of those matters set out in Section 4(5) of PIE such that
the further delivery of a notice that
complied with Section 4(2) of
PIE would have been completely unnecessary. Accordingly, and relying
upon the authority of
Unlawful Occupiers
and the authorities
there cited, I am of the view that the failure to serve the Section
4(2) Notice is not fatal.
In the result, and for
the aforegoing reasons, the conclusion I reach is that I must find
for the applicant but before doing so
must say something about the
date upon which the respondents would be required to vacate the
property. In the order sought the
applicant requires that the
respondents vacate within 48 hours of the service of the order upon
the respondents. In some way
that is sought to be justified by the
applicant when it says that the property has already been on sold to
a third party and
requires vacant possession in order to deliver
vacant possession to that third party. While that may be so I am of
the view that
requiring the respondents to vacate at such short
notice will operate against them unduly harshly. To my mind it would
be just
and fair to allow them some time within which to get their
affairs in order and effect their move from the property with some
measure of decency. I will reflect this attitude in the order I am
about to make by allowing them until the end of November this
year
in order to vacate the premises. In this matter I accordingly make
the following order:-
The first, second and
third respondents, and all persons occupying under their authority,
be and are hereby ordered to vacate
the property described as Erf
1727 Kloof (Extension 7), Registration Division FT, Province of
KwaZulu-Natal, in extent 6391 (six
thousand three hundred and ninety
one) square metres, held by Deed of Transfer No T54263/2006 situate
at 15 Greenacres Place,
Kloof, KwaZulu-Natal (“the property”)
on or before 30 November 2012 and simultaneously to deliver the keys
to the
property to the applicant or its appointed agent.
In the event of the
first, second and third respondents and all persons occupying under
their authority failing to comply with
the order in paragraph 1
above, the Sheriff of this Court or his Deputy be and is hereby
authorised and directed to eject the
first, second and third
respondents and all those occupying under their authority from the
property and to take all steps as
may be necessary to give effect to
the order in paragraph 1 above.
The counter-application
is dismissed.
The respondents, jointly
and severally, the one paying the others to be absolved, are
directed to pay to the applicant the costs
of the application and of
the counter application, such costs to include costs reserved on
previous occasions.
_____________________
Vahed J
CASE
DETAILS:
Date
of Hearing : 17 October 2012
Date
of Judgment : 08 November 2012
For
the Applicant : J F Nicholson
Instructed
by : Shepstone and Wylie
24
Richefond Circle
Ridgeside
Office Park
Umhlanga
Rocks
Tel:
(031) 575 7000
For
the Respondents : J Surju
5
Murry Court
375
Anton Lembede Street
Durban
Tel:
(031) 306 3663