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2012
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[2012] ZAKZDHC 83
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Nsindane v Standard Bank of South Africa Ltd and Others (9385/2007) [2012] ZAKZDHC 83 (22 November 2012)
IN THE KWAZULU-NATAL HIGH COURT, DURBAN
REPUBLIC OF SOUTH AFRICA
Case Number : 9385/2007
In the matter between:-
AMOS
MZOKHONA NSINDANE
.................................................
First
Applicant
(First Defendant)
JOYCE
NONHLANHLA NSINDANE
........................................
Second
Applicant
(Second
Defendant)
and
THE
STANDARD BANK OF
SOUTH
AFRICA LIMITED
......................................
First
Respondent (Plaintiff)
NOKWETHEMBA
JUBILEE NDLANZI
................................
Second
Respondent
THE SHERIFF OF THE HIGH COURT, PINETOWN
.............
Third
Respondent
GARLICKE & BOUSFIELD INC.
.........................................
Fourth
Respondent
THE REGISTRAR OF DEEDS, KWAZULU-NATAL
.................
Fifth
Respondent
___________________________________________________________________________
JUDGMENT
___________________________________________________________________________
VAN ZÿL, J.:-
The applicants seek an order
inter
alia that a judgment of
this Court, entered against them by default, be rescinded so that
they may defend the action instituted
against them by the first
respondent, as plaintiff in the action.
The matter originates from a loan admittedly advanced by the first
respondent to the applicants, who are husband and wife, and
which
was secured by a mortgage bond over the immovable property of the
applicants.
It is also common cause that the applicants fell into arrears on
their bond repayments, that the fourth respondent issued summons
on
behalf of the first respondent against the applicants and that such
summons was served upon them.
Subsequently, in the absence of appearance to defend, judgment by
default was sought and obtained, execution initiated and the
immovable property which was the subject of the mortgage bond was
sold in execution to the second respondent and registration
of
transfer recorded by the fifth respondent.
There are various grounds upon which the applicants contend that
they are entitled to relief. In the first instance they allege
that
prior to the institution of the action the first applicant had
telephonically contacted a consultant in the employ of the
first
respondent to seek advice on the issue of the applicants’
financial difficulties in maintaining their bond instalment
payments. They claim that they were advised to pay whatever they
were able, but to ensure that some payment was made every month.
This, the applicants contend lulled them into a false sense of
security whereby they did not anticipate legal action against
them
for their failure to strictly adhere to the original payment regime.
There is a dispute as to the extent to which the applicants complied
with the advice allegedly given to them, but the main difficulty
in
this regard is the paucity of information contained in the
applicants’ founding papers so that the first and fourth
respondents complain with some justification that it is not possible
to verify the allegations relied upon by the applicants.
The applicants further allege and rely upon alleged non-compliance
by the first respondent with its obligations as a credit provider
with the requirements of sections 129(1) and 130(1)(a) of the
National Credit Act 34 of 2005 (the NCA). As a result the applicants
allege that the first respondent’s action against then was
premature and legally ineffective.
In addition the applicants dispute that the constitutional warning
contained in the summons and drawing to their attention the
rights
to housing embodied in section 26 of the Constitution of the
Republic, was properly brought to their notice due,
inter alia
,
to their limited formal education and their very limited grasp of
the English language in which the summons was couched.
The applicants further rely upon alleged misinformation or
misleading information imparted to them prior to the judicial sale
of their immovable property to the effect that if they brought the
arrears up to date, the sale would not proceed. It is common
cause
that the first applicant contacted one “Shane” before
the judicial sale in an endeavour to prevent the sale
from taking
place.
It is further clear that he was informed that he needed to settle
the arrears to prevent the sale from taking place. The person
he
spoke to was no doubt Mr Shane Julien Chundergasen (Chundergasen),
an employee of the fourth respondents who at all times
acted as the
first respondent’s attorneys. It was also he who deposed to
the main answering affidavit relied upon by the
first and fourth
respondents herein.
According to Chundergasen he advised the first applicant that the
arrears to be settled was in the sum of R5 657-44 but
according
to the first applicant he was advised to pay “about
R8 000-00”. In any event, it is common cause that
the
applicants paid a sum of R4 500-00 and then a further sum of
R4 000-00 in response and that the first payment came
to the
notice of the said Chundergasen prior to the sale.
However, his attitude was that such payment was insufficient to
cover the arrears and he claims only to have become aware of
the
second payment after the sale. What terms and conditions were
imposed, if any, during their telephonic conversation is disputed
as
between the first applicant and the said Chundergasen.
The applicants also allege that the judicial sale is invalid because
a lawful attachment of their property had not come about.
This is by
reason of the fact, so it is alleged, that the first respondent had
failed to serve upon them as owners of the property
the necessary
notice of attachment in compliance with the requirements of rule
46(3).
The first and fourth respondents on the other hand contend that
there was due compliance with the rule in that the Sheriff (the
third respondent) had given notice of attachment to the applicants
by way of registered post.
The second respondent, who was the purchaser of the applicants’
immovable property at the judicial sale, initially opposed
the
relief sought by the applicants and delivered an answering affidavit
in support thereof, but did not appear at the hearing
of the matter
to persist in her opposition. It is clear from her affidavit,
however, that very shortly after the auction she
was made aware of
the applicants’ intention to dispute the validity of the legal
proceedings against them, as well as that
of the resultant sale of
the property. Insofar as she later proceeded to seek and obtain
registration of transfer she was not
unaware of the situation.
At the outset the first question to be considered is whether the
applicants have made out a case for the rescission of the judgment
granted against them by default by the registrar in terms of the
provisions of rule 31(5).
In Grant v Plumbers (Pty) Ltd
1949 (2) SA 470
(OPD) at page 476 the
court held that in order to show good cause for rescission an
applicant should give a reasonable explanation
for his default, show
that his application is made
bona fide
and that he has a
bona
fide
defence to the plaintiff's claim.
In the present matter the dispute is not directly relevant to the
applicants’ explanations for their default and the delays.
But
even if they were negligent in all the circumstances of the case,
that would not necessarily result in the failure of the
application
for rescission. In Saraiva Construction (Pty) Ltd v Zululand
Electrical and Engineering Wholesalers (Pty) Ltd
1975 (1) SA 612
(D)
at page 615B, Howard J (as he then was) held that even gross
negligence in relation to the default was not an absolute impediment
to the granting of relief under Rule 31 (2) (b). (See also HDS
Construction (Pty) Ltd v Wait
1979 (2) SA 298
(E), Smalberger J (as
he then was) at page 301 A-C).
In Kavasis v South African Bank of Athens Ltd
1980 (3) SA 394
(D) at
page 395 C-D James JP remarked in relation to an application for
rescission that;
“
The only issue, therefore, which I have
to decide is whether the defendant has shown that he has a bona fide
defence to the action.
In other words whether he has made averments
on oath which, if established at the trial, would entitle him to the
relief he asks
for. He need not deal fully with the merits of the
case or produce evidence that the probabilities are actually in his
favour
.”
It becomes necessary then to consider in relation to the claim for
rescission whether the applicants have shown that they have
a
bona
fide
defence to the plaintiff’s action. In this regard it
should be borne in mind that;
“
Unlike the provisions of Rule 32 dealing
with summary judgment, Rule 31(2) does not give the Judge power to
allow the applicant
to defend only a portion of the claim.
Furthermore, if the defendant is granted leave to defend he is
entitled to put in issue
the question of whether any payments other
than the R250 already referred to were made to the plaintiff by the
principal debtors.
It seems to me that if a defendant establishes a
bona fide defence against a portion of a plaintiff's claim he is
entitled to a
rescission of the whole judgment.
”
Per James JP in Kavasis (supra) at page 396 B-C
As indicated above the applicants pertinently raised in their
founding papers the issue of the first respondent’s alleged
non-compliance with the requirements of sections 129(1) and
130(1)(a) of the NCA. In his founding affidavit the first applicant
goes so far as to state that he doubts that any notice as envisaged
in section 129(1) had been sent out by or on behalf of the
first
respondent.
The first applicant denies emphatically that either applicant ever
received such notice. He expands as to what he claims their
reaction
would have been had they received such a notice and concludes that
the applicants would have jumped at the opportunities
offered in the
NCA to avoid litigation.
The response in opposition by the first and fourth respondents is
interesting. In their main answering affidavit relied upon
by the
first and fourth respondents and deposed to by the said
Chundergasen, he does not purport to have personal knowledge of
any
actual compliance by or on behalf of the first respondent with the
requirements of the NCA. Instead he merely asserts his
belief that
the first respondent would have complied with the requirements of
the Act prior to the institution of the action.
In the supporting affidavit delivered on behalf of the first
respondent and deposed to by a Ms Shelly Anne Cianfanelli
(Cianfanelli)
she qualifies herself the first respondent’s
home loans manager based in Johannesburg with access to all its
records. She
states that it is the standard practise of the first
respondent’s “
pre-legal department
” in all
debt collection matters to send out notices in compliance with
section 129 of the NCA.
What is, however, striking in its absence is any information
directly relevant to any notice(s) which may actually have been
sent
out to the applicants. There is no suggestion in her affidavit that
a search was made of the records of the first respondent
to locate a
copy of the notice(s) allegedly sent to the applicants, or how and
when such notice was sent and if by registered
post, that any effort
was made to locate and produce proof of such posting.
Instead she merely purports to “
confirm that the first
respondent would indeed have sent the applicants notice in
compliance with section 129 of the Act prior
to instructing the
fourth respondent
”. There is also no clear indication to
when or to which address such notice would have been sent.
If reference is had to the certificate, attached to the first
respondent’s summons in an attempt to comply with practise
directive 28, then this document is equally uninformative. It reads
as follows;
“
We, The Standard Bank of South Africa
Limited represented by JAMES JONES, he being duly authorised hereby
certify that the Plaintiff
has complied with the provisions of
Section 129
of the
National Credit Act, No 34 of 2005
”
There is, however, nothing in the certificate to suggest that the
said Jones personally attended to the issuing of the
section 129
notice or that he had any personal knowledge of the matter, nor does
it even indicate his position in the employment structures
of the
first respondent.
The certificate and the summons need to be read together in regard
to compliance with the requirements of the NCA. In this regard
it is
noteworthy that the summons merely alleged compliance by the first
respondent and in this regard referred to “..
a certificate
indicating such compliance (is) annexed hereto..
”
The relevant portion of the practise directive read;
“
..
the
summons must allege that there has been compliance with section 129
of the Act and a certificate must be attached to the summons
indicating compliance therewith.
”.
The certificate and the summons, whether read individually or
together are entirely devoid of factual matter and merely state
compliance as a conclusion. Indeed, in my view they are so
uninformative as to be worthless.
In Munien v BMW Financial Services (SA) (Pty) Ltd and Another
2010
(1) SA 549
(KZD), Wallis J (as he then was) held that the onus of
proving that the required notice was indeed given rested upon the
credit
provider, who needed to show that the notice was given in the
manner chosen by the consumer and that such manner was one specified
in section 65(2)(a) of the NCA. (See paragraphs (20) and (22) at
page 557F to 558B and page 558D - F.)
On the facts in the present matter it is clear that the first
respondent has not placed sufficient evidence before the court
to
support its claims. The fact that it produced no facts relevant to
the issuing and delivery of any section 129 notice to the
applicants, despite the direct challenge issued by the applicants,
is significant in this regard.
It follows that the applicants have demonstrated a
bona fide
defence, at least at the level of a triable issue, to the first
respondent’s claims in the action and it therefore becomes
unnecessary to consider the remaining grounds upon which the
applicants seek rescission of the judgment granted by default.
However, the applicants seek not only rescission of the judgement
granted by default, but also by way of the present application,
the
setting aside of the judicial sale and the restitution of the
status
quo ante.
Such relief may have serious and unintended
consequences.
The granting of rescission in relation to the default judgement has
the effect that the issues in the litigation become live
again and
in due course are likely to be the subject of evidence before and
decision by a trial court.
It is that court which will then be in a position to decide and
pronounce authoritatively upon whether in fact the first
respondent’s
action was premature or ineffective. The findings
of that court will also affect, if not determine, the claims for the
setting
aside of the judicial sale and the consequences thereof.
In my view, to determine anything more than the fate of the
rescission of the default judgment at this stage would not be
justified
in all the circumstances.
In the light of the conclusions to which I have come above, it
appears undesirable to make any firm orders as to costs. It might
come about that at the trail of the action facts emerge which
indicate that the applicants should fail in their resistance to
the
first respondent’s claims and that their application for
rescission should not have been brought.
In my view caution accordingly dictates that I should reserve costs
at this stage, even in respect of the rescission portion
of the
application, for ultimate decision by the trial court.
Order:
In the result the following order is made:
a. Insofar as may
be relevant condonation is granted in respect of the late delivery of
the application for rescission.
b. In terms of
prayer (e) of the applicants’ notice of motion the judgment
granted by default in favour of the first respondent
against the
applicants under case number 9385/2007 on 11 October 2007 is hereby
rescinded.
c. The remaining
relief sought by the applicants and as set out in prayers (a), (b),
(c), (d) and (f) of the notice of motion are
reserved for decision by
the trial court deciding the action in respect of which the default
judgment has herein been rescinded.
d. All issues of
costs are likewise reserved for decision by the trial court hearing
the action.
_____________________
VAN ZYL, J.
APPEARANCES:
For Applicants : Adv G. D. Goddard
Instructed by Messrs Bongani Sibisi & Company of Pinetown
c/o Shembe Attorneys of Durban.
For First & Fourth
Respondents : Adv L. D. Pistorius
Instructed by Garlicke & Bousfield Inc. of Durban.
For Second & Fifth
Respondents : No appearance.
Date argued : 18 SEPTEMBER 2009.
Delivered : 22 NOVEMBER
2012
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