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[2020] ZASCA 12
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Jiyana and Another v Absa Bank Limited and Others (1424/2018) [2020] ZASCA 12 (19 March 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No: 1424/2018
In
the matter between:
THEMBINKOSI
KHULEKANI RUDOLF JIYANA FIRST
APPELLANT
NOMVO
JIYANA SECOND
APPELLANT
and
ABSA
BANK
LIMITED FIRST
RESPONDENT
CAPE
TOWN NORTH
SHERIFF SECOND
RESPONDENT
GARY
NIGEL
HARDISTY THIRD
RESPONDENT
JENNIFER
JEANINE DOROTHY HARDISTY FOURTH
RESPONDENT
REGISTRAR
OF DEEDS, WESTERN CAPE FIFTH
RESPONDENT
Neutral
citation:
Jiyana
and Another v Absa Bank Limited and Others
(1424/2018)
[2020] ZASCA 12
(19 March 2020)
Coram:
PETSE
DP, WALLIS, MAKGOKA, SCHIPPERS and MBATHA JJA
Heard:
18
February 2020
Delivered:
19 March 2020
Summary
:
Peremption – effect of settlement agreement – appellants
signed a settlement acknowledging validity of a judgment
which they
previously sought to set aside – appellants perempted from
further challenge to validity of judgment.
Res
judicata – appellants’ rescission application against a
default judgment dismissed – appellants applying again
to
declare the default judgment a nullity – latter application
effectively sought same relief as in the rescission application
–
defence of res judicata correctly upheld.
ORDER
On
appeal from:
Western
Cape Division of the High Court, Cape Town (Boqwana J, Allie and
Samela JJ concurring sitting as a court of appeal):
The
appeal is dismissed with costs, including costs of two counsel.
JUDGMENT
Makgoka
JA (Petse DP, Wallis, Schippers and Mbatha JJA concurring)
[1]
This appeal,
with special leave of this court, is against the judgment of the full
court of the Western Cape Division of the High
Court (the high
court). That court dismissed the appellants’ appeal against a
judgment of a single judge, who had dismissed
the appellants’
application for certain declaratory orders to set aside a default
judgment granted against them, and the
consequences of execution of
that judgment. It should be mentioned at this stage that none of the
second to fifth respondents took
part in this appeal.
[2]
The appeal
has its genesis in a default judgment granted by the high court on 15
April 2014 against the appellants, Mr and Mrs Jiyana,
in favour of
the first respondent, Absa Bank Ltd (Absa). The appellants, husband
and wife, had concluded a loan agreement with
Absa in January 2004
for the purchase of their immovable property known as erf 1593
Parklands, situated in Cape Town (the property).
[1]
A mortgage bond was
registered over the property in favour of Absa to secure the loan.
[3]
The
appellants defaulted on their repayment obligations to Absa, which
issued summons in the high court in November 2006 for payment
of the
outstanding amount and for an order declaring the property specially
executable. In the absence of a notice of intention
to defend by the
appellants, default judgment was granted against them in June 2008,
followed by a warrant of execution for the
sale of the property in
execution. The appellants subsequently applied for a stay of
execution and the rescission of the default
judgment. The latter
application was set down for 3 November 2008.
[4]
On 13
October 2008 the parties concluded a settlement agreement, which was
made an order of court. In terms of that order, the appellants
would
settle the arrears by 7 November 2008, in addition to the monthly
bond instalments. The order also provided that should the
appellants
fail to make the payments as agreed, the respondent would be entitled
to apply for judgment for the outstanding balance
under the mortgage
bond, and for an execution order against the property.
[2]
As a result of this
order, the appellants’ rescission application on 3 November
2008, was granted on an unopposed basis.
[5]
Pursuant to
the order of 13 October 2008, the appellants settled the arrears on
their account, but again fell into arrears in May
2013. In March 2014
Absa applied to the high court, seeking payment of the full
outstanding amount and an order declaring the property
specially
executable, as it was entitled to do in terms of the October 2008
order. The appellants failed to oppose the application,
and default
judgment was granted against them on 15 April 2014. The several
attempts made by the appellants to invalidate this
default judgment
lie at the heart of this case.
[6]
On 10 June
2014 the appellants applied for rescission of the two orders referred
to above (the October 2008 order and the default
judgment). Their
complaint in respect of both orders was that the court had failed to
take into account their rights in terms of
s 26(3) of the
Constitution not to be deprived of a home without an order of court
after considering all the relevant circumstances.
The application
came before court on 6 November 2014. During argument, the first
appellant, who appeared in person and on behalf
of the second
appellant, made a muted reference to Absa not having complied with s
129(1) of the National Credit Act 34 of 2005
(NCA).
[3]
[7]
None of the
arguments found favour with the court. With regard to the October
2008 order the court observed that it was made by
consent, and was
therefore neither a default judgment nor a judgment obtained in the
absence of the appellants. Regarding the default
judgment, the court
remarked that it was not clear on what factual basis non-compliance
with the NCA was asserted. Accordingly,
it took the view that absent
such a basis, that argument was not open to the appellants.
Consequently the application for rescission
of the two orders was
dismissed.
[8]
Following
the dismissal of the rescission application, the property was
attached. A sale in execution was scheduled by the sheriff
for
3 February 2015. The appellants applied for leave to appeal
against the dismissal of the rescission application. That
application
was dismissed on 10 December 2014. The appellants applied
to this court for leave to appeal, which application
was dismissed on
26 March 2015. The appellants’ further application for leave to
appeal to the Constitutional Court was similarly
dismissed on 27 July
2015.
[9]
On 27 August
2015, the parties concluded another settlement agreement for the
payment of the arrears, and ancillary provisions.
I shall revert to
that agreement later in the judgment. Once again, the appellants
failed to comply with the terms of the agreement.
As a result, Absa
caused a further sale in execution of the property to be arranged,
which the sheriff scheduled for 5 April 2016.
On 30 March 2016, a
week before the sale in execution, the appellants launched an urgent
application to stay the sale. The application
was dismissed, and so
was the subsequent application for leave to appeal. On 5 April 2016
the property was sold in execution
to the third and fourth
respondents, and was transferred into their names on 10 June 2016.
The appellants’ application for
leave to appeal against the
refusal to stay execution was subsequently dismissed by this court.
[10]
On 5
September 2016 the appellants launched the application for
declaratory relief, to which this appeal relates. They sought a
declaratory order that the credit agreement between them and Absa was
lawfully reinstated in terms of s 129(3) of the NCA,
[4]
upon payment of the
arrears pursuant to the October 2008 agreement. Accordingly, the
appellants sought relief setting aside all
that had been done after
the reinstatement, namely: the default judgment granted against them
on 15 April 2014; the sale in execution
of the property; and, its
transfer to the third and fourth respondents. In addition, the
appellants sought an order confirming
the ‘reinstatement’
of the credit agreement between the parties in terms of the
settlement agreement of 27 August
2015.
[11]
The basis of
the application was this. The court which considered the application
for default judgment should have verified that
the appellants had
paid all the arrears pursuant to the October 2008 order. Upon such
payment, the credit agreement had been reinstated
by operation of
law. If Absa wished thereafter to enforce the credit agreement, it
had to issue a fresh notice in terms of s 129(1)
of the NCA. Absent
such notice, Absa was not entitled to apply for default judgment. By
failing to make such an enquiry, and by
granting judgment under those
circumstances, the court violated s 130(3) of the NCA, which enjoins
a court to ensure that the court
may determine a matter concerning
the enforcement of a credit agreement only if it is satisfied that s
129(1), among others, has
been complied.
[12]
This, the
appellants asserted, rendered the default judgment a failure of
justice, a breach of s 1 of the Constitution, and overall,
a nullity.
For this proposition the appellants sought refuge in
Nkata
v Firstrand Bank Ltd and Others
2014
(2) SA 412
(WCC). There, the high court at para 34 held, although
somehow tentatively, that payment of arrears had the effect of
reinstating
a credit agreement, and that if the consumer again fell
into arrears, the credit provider had to obtain a fresh judgment and
authority
to execute after complying again with the provisions of s
129(1) of the NCA.
[5]
[13]
The
application was dismissed on 29 June 2017. The subsequent appeal to
the full court met the same fate on 17 August 2018. Both
courts
rejected the appellants’ submission that the default judgment
was a nullity. They further concluded that the issues
raised in the
application for declaratory relief were res judicata between the
parties. The issues, they concluded, were finally
pronounced upon by
the Constitutional Court when it refused leave to appeal on 27 July
2015. However, this court granted the appellants
leave to appeal.
[14]
Both the
court of first instance and the full court commendably gave detailed
and closely reasoned judgments. However, I take a
much narrower view.
The anterior issue is peremption – whether it is at all
permissible for the appellants to impugn the
default judgment in the
light of the settlement agreement of 27 August 2015. Then
there is the applicability of the doctrine
of res judicata. I
consider these in turn.
[15]
The law on
peremption is settled. If the conduct of an unsuccessful litigant is
such as to point indubitably and necessarily to
the conclusion that
he or she does not intend to attack the judgment, then they are held
to have acquiesced in it. The conduct
relied upon must be unequivocal
and must be inconsistent with any intention to appeal. The onus of
establishing that position is
upon the party alleging it. See
South
African Revenue Service v Commission for Conciliation, Mediation and
Arbitration and others
[2016]
ZACC 38
;
2017 (1) SA 549
(CC) para 26 with reference to
Dabner
v South African Railways and Harbours
1920
AD 583
at 594.
[16]
In this
case, the conduct of the appellants appears from the settlement
agreement concluded between the parties on 27 August 2015.
It is a
detailed agreement, providing for payment of the outstanding amount
and for the payment terms. The crucial portion is contained
in clause
1. There, it is provided that ‘defendants [appellants] confirm
that the judgment against them stands and [they]
accept liability to
plaintiff [Absa] jointly and severally for payment of R391 797.06.’
The agreement made further provision
for an order declaring the
property specially executable in the event of non-compliance. It is
common cause that the judgment referred
to in that settlement
agreement is the default judgment. Clauses 1.1 to 1.4 mirror clauses
1 to 4 of that judgment in terms of
the amount owed, interest
payable, special executability of the property and costs.
[17]
By
confirming to the validity of the default judgment and accepting
their liability towards Absa pursuant to that judgment, it was
no
longer open to the appellants thereafter, to impugn it. As explained
by the Constitutional Court in
Eke
v Parsons
[2015]
ZACC 30
;
2016 (3) SA 37
CC para 31, the result of a settlement
agreement made an order of court is that a party is precluded from
relying on a cause of
action or defence that could have been advanced
or raised but for the settlement order. Although the remarks in
Eke
were
made in respect of an agreement made an order of court, in my view,
they apply with equal force to settlement agreements which
do not
have the imprimatur of a court order.
[18]
In my view,
there could be no clearer conduct pointing to the abandonment of
their right to attack the default judgment than clause
1 of the
settlement agreement. The appellants clearly resigned themselves to
the consequences of the judgment against them, and
committed
themselves to fulfilling its terms. It was suggested in argument that
the appellants were in some way coerced by Absa
into concluding this
agreement. This suggestion is refuted by the fact that the first
appellant, Mr Jiyana, a former practising
attorney and a businessman,
wrote to Absa on 9 July 2015, before the Constitutional Court refused
him and his wife leave to appeal
against the refusal of the
rescission application, asserting that they were in a position to pay
the outstanding arrears and service
the bond and suggesting that they
conclude a settlement agreement. The conclusion is accordingly
inescapable that the appellants
are perempted from impugning the
default judgment. Whatever irregularities there might have been in
the manner in which that judgment
was sought and granted, were
ratified in clause 1 of the settlement agreement. That should
ordinarily be the end of the matter.
I will however, also consider
the res judicata argument,
[6]
to which I now
turn.
[19]
A matter is
res judicata if in the previous proceedings, the matter adjudicated
upon was for the same cause, between the same parties
and the same
thing was demanded
.
See
Smith
v Porritt and others
2008
(6) SA 303
(SCA) para 10 in which a flexible approach was adopted to
the doctrine of res judicata. That approach was approved by the
Constitutional
Court in
S
v Molaudzi
[2015]
ZACC 20
;
2015 (2) SACR 341
(CC) paras 22 and 23. To consider whether
this threshold had been met in the present case, it is necessary to
consider the applications
for leave to appeal against the dismissal
of the rescission application in this court and in the Constitutional
Court. Those applications
were not before us. At our request, the
application to the Constitutional Court was subsequently furnished to
us. We also had regard
to the application for leave to appeal in this
court.
[20]
In both
applications, the appellants’ main argument was two-fold.
First, that they were not in wilful default as they had
not been
served with the application for default judgment. Second, that Absa
had not complied with ss 129 and 130 of the NCA which
had the effect
that the appellants could not ‘exercise their rights in terms
of the NCA.’ This in turn, so went the
submission, violated the
appellants’ rights enshrined in ss 25, 26 and 34 of the
Constitution.
[21]
Having set
out what was submitted in the Constitutional Court, it has to be
determined whether the appellants demanded the ‘same
thing’
in the application for declaratory relief. I have already mentioned
that non-compliance with s 129(1) was raised in
the rescission
application, albeit mutedly. In light of the facts of this case, that
argument could only have been raised in the
context of re-instatement
of the agreement following the payment of the arrears pursuant to the
October 2008 order. As appears
from the preceding paragraph, the same
argument was made in the applications for leave to appeal in this
court and in the Constitutional
Court. In the application for
declaratory relief that issue was one of the key contentions.
[22]
Counsel for
the appellants urged us to consider, with reference to
Evins
v Shield Insurance Co Ltd
1980
(2) SA 814
(A) and
National
Sorghum Breweries Ltd (t/a) Vivo African Breweries v International
Liquor Distributors (Pty) Ltd
[2000] ZASCA 159
;
2001
(2) SA 232
(SCA);
[2001] 1 All SA 417
(SCA), that what was sought in
the application for declaratory relief was totally different from the
relief sought in the rescission
application.
[23]
Evins
involved the
question whether at common law a claim for damages by a plaintiff for
bodily injury and the claim for damages by the
same plaintiff for
loss of support caused by the death of a breadwinner (where both the
bodily injury and the death result from
the same accident) were
separate causes of action or simply facets of a single cause of
action.
This
court concluded at 839D that even though the two claims may flow from
the same event or accident, the cause of action in each
may arise at
different times. In respect of bodily injury this will normally arise
at the time of the accident, whereas in the
case of death, the cause
of action for loss of support will arise only upon the death of the
deceased, which may be different from
the date of the accident. The
one claim arose from the injuries suffered by the plaintiff, while
the other arose from the death
of the breadwinner, and these were
held to constitute separate causes of action.
[24]
The
appellants’ position is different. Their right to challenge the
default judgment on the grounds that the credit agreement
had been
reinstated under s 129(3) of the NCA was not deferred, but existed
when they applied for rescission of the default judgment.
Unlike a
claimant for loss of support whose claim does not arise until death
occurs, the appellants faced no such impediment. The
right to
challenge the default judgment on any available legal ground inured
to them immediately the judgment was given. They initially
elected to
apply for rescission, and in these proceedings sought to have the
default judgment set aside, which was in essence the
same as seeking
its rescission. Only when rescission was unsuccessful did the
appellants launch the review application. This is
impermissible. It
follows that the
Evins
principle does not
avail the appellants.
[25]
In
National
Sorghum
,
the respondent had obtained default judgment against the appellant
for restitution flowing from breaches of three written agreements
between the parties. Later, in a second action the respondent claimed
damages suffered as a result of the breach of contract. The
appellant’s special plea of res judicata was dismissed on
the basis that the claims were not based on the same grounds
or cause
of action. In the first suit the cause of action was a claim for
repayment of the purchase price, whereas the second was
a claim for
damages consisting of expenses which the respondent had incurred in
carrying out its obligations under the agreements,
and loss of
income.
[26]
In the
present case, the common ‘cause of action’ in the
rescission application and the application for declaratory
relief was
whether the default judgment should remain of force and effect. The
relief in both instances was the same, ie the setting
aside of that
judgment. It is irrelevant whether one aims to ‘rescind’
it or set it aside as claimed in the notice
of motion or ‘declare
it a nullity, as counsel expressed it.’ Its true nature was not
altered by pinning a new label
on the review application, or by
advancing different reasons from those in the rescission application.
The relief sought was essentially
the same, namely to undo the
default judgment. As pointed out in
African
Farms & Townships v Cape Town Municipality
1963
(2) SA 555
(A) at 563C-E, different reasons leading to a different
conclusion cannot affect the identity of the question to be decided.
In
all the circumstances, the issue was res judicata.
[27]
Counsel for
the appellants also attacked the October 2008 order, in particular,
clause 7 thereof. That clause provided that in the
event that the
appellants failed to comply with the terms of the order, Absa was
entitled to apply for judgment for the outstanding
amount, on five
days’ notice to the appellants. Counsel submitted that the
clause was unlawful in light of s 90(2)(
a
)(i)
and 90(2)(
b
)(i),
which respectively prohibit provisions in credit agreements that
defeat the purposes of the NCA or deprive a consumer of a
right set
out in the NCA.
[28]
The
appellants are not entitled to revisit this point. As set out in
paras 5 and 6 above, part of the rescission application
was
aimed at setting aside several clauses of the October 2008 order,
including clause 7. That was dismissed. Applications for
leave to
appeal against the refusal of rescission were dismissed by this court
and the Constitutional Court. In all the circumstances,
I conclude
that the ‘same thing’ was demanded by the appellants in
the rescission application, the various applications
for leave to
appeal and in the application for declaratory relief, ie the setting
aside of the default judgment. The issue was
plainly res judicata.
[29]
Closely
allied to the doctrine of res judicata, is the ‘once and for
all’ rule. In
Evins
at 835E it was held
that the purpose of the rule is to ‘prevent a multiplicity of
actions based upon a single cause of action
and to ensure that there
is an end to litigation.’ See also
National
Sorghum
para
10, where it was observed that the scope of the rule requires that
all claims generated by the same cause of action be instituted
in one
action’.
[30]
In
Custom
Credit
Corporation (Pty) Ltd v Shembe
1972
(3) SA 462
(A) at 472A-E it was held that the law requires a party
with a single cause of action to claim in one and the same action
whatever
remedies the law accords him upon such cause. If a cause of
action has previously been finally litigated between parties, then a
subsequent attempt by one to proceed against the other on the same
cause for the same relief can be met by a defence of res judicata.
[31]
The argument
by the appellants was that the credit agreement had been reinstated
when the arrears were paid. Resultantly, when they
again fell into
arrears, Absa was obliged to again comply with s 129 before taking
judgment. As stated already, that argument was
based on
Nkata
para 34. By the
time the rescission application was launched,
Nkata
had
been handed down six months earlier, on 16 January 2014. Thus,
that argument was available to the appellants then.
[32]
It is
therefore inexplicable that in their supporting affidavits, the
appellants did not assail the default judgment on the basis
that it
was erroneously granted for want of compliance with
Nkata
.
In terms of the once and for all rule, the appellants are not
permitted to revisit the issue. When the attack on the default
judgment was considered the appellants were bound to put their whole
case before court. They were bound to assemble all the weapons
in
their arsenal to set aside the default judgment, which included
Nkata
.
[33]
Although
they did not refer to
Nkata
,
without specifying the basis therefor, they raised non-compliance
with s 129(1), which could only have been required if the agreement
had been reinstated under s 129(3). It is of their own doing that the
application was dismissed on that basis. They are not permitted,
without special circumstances, to approach the court again on a
different basis. Their assertion that the law was uncertain until
the
Constitutional Court judgment handed down its judgment in
Nkata
is unconvincing.
That there was an application for leave to appeal pending in
the Constitutional Court at the time of the
rescission application,
did not prevent the appellants from relying on the high court
judgment, subject to the outcome of the appeal.
[34]
In all the
circumstances, the appeal must fail. It is dismissed with costs,
including costs of two counsel.
_______________
T
M Makgoka
Judge
of Appeal
APPEARANCES:
For the Appellants: M
Donen SC
Instructed by : Godla &
Partners Inc., Cape Town
Matsepes Inc.,
Bloemfontein
For First Respondent: A
Bham SC (with him P Ngcongo)
Instructed by : Webber
Wentzel, Johannesburg
Phatshoane Henney
Attorneys, Bloemfontein
[1]
Although the loan
agreement was concluded before the coming into effect of the
National Credit Act 34 of 2005 (NCA) on 1
June 2006, in terms
of item 1 of schedule 3 of the NCA, the loan agreement became
governed by the NCA as a ‘pre-existing’
credit
agreement, which is defined as ‘an agreement that was made
before the effective date and to which this Act applies.’
[2]
The procedure set out in
that court order is provided for in rule 41(4) of the Uniform Rules
of Court.
[3]
That section provides
for the service of a notice by a credit provider on a consumer
notifying them of their default, and propose
that the consumer refer
the credit agreement to a debt counsellor, alternative dispute
resolution agent, consumer court or ombud
with jurisdiction, with
the intent that the parties resolve any dispute under the agreement
or develop and agree on a plan to
bring the payments under the
agreement up to date. A credit provider is precluded from
commencing
any legal proceedings to enforce the agreement before
first
providing such notice to a consumer.
[4]
The section provides
that a consumer may at any time before the credit provider has
cancelled the agreement re-instate a credit
agreement that is in
default by paying to the credit provider all amounts that are
overdue, together with the credit provider’s
permitted default
charges and reasonable costs of enforcing the agreement up to the
time of re-instatement.
[5]
That
tentative view was confirmed by the majority of the Constitutional
Court in
Nkata
v Firstrand Bank Ltd
[2016]
ZACC 12
;
2016 (4) SA 257
(CC) paras 101 – 106
.
[6]
See
S v Jordaan &
others (Sex Workers Education and Advocacy Task Force & others
as amici curiae
[2002] ZACC 22
; ,
2002
(6) SA 642
;
2002 (11) BCLR 1117
(CC) para 21
where
it was held that where a provision or decision is attacked on one
ground that is considered decisive of the matter, the
other grounds
raised in the matter should nevertheless be ventilated and decided
upon for the benefit of a court that may later
have to hear an
appeal arising from that matter.