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[2024] ZAFSHC 132
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De Beer N.O. v Smith N.O. and Others (524/2020) [2024] ZAFSHC 132 (9 May 2024)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable: NO
Of
Interest to other Judges: NO
Circulate
to Magistrates: NO
CASE
NO: 524/2020
In
the matter between
:
JACOBUS
FREDERIK DE BEER N.O
.
Applicant
[In
his capacity as Executor in the Estate
of
the Late Elizabeth Jacoba Bekker,
Estate
No. 744[…]]
And
EURICH
RUWAYNE SMITH N.O.
1
st
Respondent
EUGENE
JANUARIE N.O.
ELZANA
LOURENS N.O.
[In
their capacities as Trustees in the
Insolvent
Estate of the Phillipus Andries
Olivier
as well as of Olivier & Ackerman Partnership]
ELRICH
RUWAYNE SMITH N.O.
2
n
d
Respondent
DISLHAD
ISMAIL N.O.
[In
their capacities as Trustees in the
Insolvent
Estate of Corne Ackerman, ID No
:
7[…]]
JOHANNA
JACOBA LOURENS
3
r
d
Respondent
ELIZABETH
JACOBA PRETORIUS
4
th
Respondent
LIZETTE
VAN TONDER (néé Pretorius)
5
t
h
Respondent
ELIZABETH
JACOLINE DE WET
6
t
h
Respondent
CORNELA
(CORRIE)
S.A. BEKKER
7
th
Respondent
S-BRO
MEKELAARS/FINANSlёLE
8
th
Respondent
ADVISEURS
(PTY) LTD
THE
MASTER OF THE FREE
9
th
Respondent
STATE
HIGH COURT
NICOLAAS
MICHAEL SMITH N.O.
10
th
Respondent
HEARD
ON:
23 November 2023
JUDGMENT
BY
:
MHLAMBI, J
DELIVERED
ON:
09 May 2024
Introduction
[1]
This
is an application for the rescission of a default judgment and
simultaneously the opposition of a Rule 46A application. For
the sake
of convenience (as also suggested
in
the applicant's founding affidavit
[1]
)
the parties are referred to as in the summons with the necessary
modifications. The 1
s
t
respondents
in this application are the 1
st
plaintiffs
in the main application.
[2]
On 21
September 2024, the court granted an order by agreement between the
applicant (as the first interested party) and the 1
st
and
2
nd
respondents
(as the 1
st
plaintiffs)
that:
"1.
1
The
application in terms of Rule 46A is postponed to 23 November 2023 at
09h30 to the opposed motion court roll;
1.2
The
First Interested Party shall issue and serve an application for
rescission of the default judgment that was granted against
the
Second and Third Defendants on 15 December 2022 by no later than
close of business on Wednesday, 4 October 2023;
1.3
The
First Plaintiffs shall file their answering affidavit in the
application for the rescission of judgment, if any, on or before
25
October 2023.
1.4
The
First Interested Party shall file its replying affidavit in the
application to rescind the default judgment on or before 8 November
2023.
1.5
The
application for the rescission of the default judgment shall also be
set down to be heard on 23 November 2023 at 09h30 on the
opposed
motion court roll.
1.6
The
First Interested Party shall file his answering affidavit in the Rule
46A application,
if any,
by close of business on Wednesday, 4 October 2023.
1.7
The
First Plaintiff's replying affidavit in the Rule 46A application
shall be filed on or before 18 October 2023
.
1.8
the
costs of the postponement of the Rule 46A application should stand
over for later adjudication."
[3]
On 15 December 2022,
the court granted a default judgment against the second and
third
defendants
for
the
payment
of
the
amounts
of
R370 467.29
and R6 305
515.29 in terms of prayers 2 and 3 of the particulars of claim. It is
this default judgment that the applicant wishes
to rescind
.
Brief
background
[4]
The first
plaintiffs, as trustees of the insolvent estates of Olivier and the
Olivier and Ackerman Partnership, obtained a default
judgment on 15
December 2022 against Corné Ackerman N.O. and Gertina Susanna
Rautenbach N.O. (being the second and third
defendants in the main
action) in their representative capacities as executors in the estate
of the late Elizabeth Jacoba Bekker
("the Bekker Estate").
Elizabeth Jacoba Bekker died on 20 November 2023
.
These
executors caused a bank account to be opened at Absa Bank in the name
of that estate, ("the Bekker estate"), on
05 January 2004.
They had access to and control over this account.
[5]
Corné
Ackerman practiced as an attorney in partnership with Phllipus
Andries Olivier in the name and style of Olivier and
Ackerman
Attorneys from 04 January 2010 until the dissolution of the
partnership on 26 July 2019. The partnership administered
the Bekker
estate through Ackerman who was the executor of the estate and the
partner in the attorneys' firm
.
[6]
In
the
period
between
14
November
2014
to
06
June
2019,
an
amount
of
R 6 305 515.22
was transferred from the trust account of the Olivier and Ackerman
trust account to the Bekker Estate account. Between
January 2016 to
July 2019, a further amount
of R 370
467.29 was paid to the creditors of the Bekker Estate out of the
attorneys' trust account. At the time these payments were
made, the
Bekker Estate account did not have such an amount of money held in
the trust account for its benefit. The executors knew
that the Bekker
Estate was neither entitled to receive the money from the attorneys'
trust account nor to have payments made to
its creditors with money
from that trust account.
[7]
A combined
summons was issued on 7 February 2020 for the recovery of these
monies. Copies of the summons were served on the 2
nd
defendant
at his residence on 2 June 2022 and the third defendant on 1 June
2022 at her appointed attorney's firm. The default judgment
was
granted on 15 December 2022. An application to declare immovable
property executable in terms of Rule 46A followed and was
served,
amongst others, on the applicant as the first interested party,
[8]
The applicant
was appointed as the executor of the Bekker Estate and letters of
executorship
were issued by
the Master on 23 March 2023
.
On 4 October
2023, he filed a notice of substitution and replaced the 2
nd
and
3
rd
respondents
as executors of the Bekker Estate.
The
application for the rescission of the default judgment
[9]
The applicant
stated in the
founding affidavit that he was approached
by the 8
th
and
9
th
defendants for assistance whereupon he proceeded to apply for
appointment as an executor. The estate file was opened on 03 March
2021 and the letters of appointment
were issued on
23 March 2023
.
He has to
date, save for peripheral files, been unable to secure the original
file relating to the Bekker Estate from the offices
of the Oliver and
Ackerman attorneys. The attorneys' firm has since been closed down
and both partners sequestrated. The applicant
neither approached nor
consulted the third defendant as she had no interest in the matter
due to her age and mental state. According
to the applicant, it was
quite apparent that the third defendant never played any material
role in the administration of the Bekker
Estate.
[10]
The applicant took issue with the respondents taking judgment against
an estate that was
"effectively
defenceless and without an Executor"
while
the respondents' attorney was aware that the third defendant was no
longer of sound mind and could not comply with her statutory
obligations. A replacement executor was, at the time, not yet
appointed.
[2]
The
applicant was of the view that once the 2
nd
defendant was sequestrated, he would be removed from office by
determination of statute.
[3]
Consequently, the judgment that was granted by default, was a nullity
in its entirety.
[4]
[11]
The applicant required an opportunity to investigate whether the
second defendant represented the estate in whatever
action
he was busy with as it was, in his view, clear that the second
defendant was busy on a frolic of his own. The applicant had
neither
evidence nor consulted with witnesses and auditors.
[5]
The
erstwhile clients that were affected by the dishonest conduct of the
2
nd
defendant,
had since filed claims with the Legal Practitioners Fidelity Fund for
reimbursement
of
the pecuniary loss they suffered due to the theft of the trust monies
that were administered by the 2
nd
defendant's
attorneys' firm. These developments
had
a material effect on the nature of the claims contained in the
summons
[6]
in that the claims
had either changed or settled.
[7]
[12]
The Rescission application is brought in terms of Uniform Rule
42(1)(a), alternatively, Rule 32(1)(b), alternatively
section 173 of
the Constitution, and alternatively, the common law.
[8]
Section 31(2)(b) provides that a defendant may, within 20 days after
acquiring knowledge of such judgment, apply to the court upon
notice
to the plaintiff, to set aside such judgment and the court may, upon
good cause shown, set aside the default judgment on
such terms as it
deems fit.
[13]
Section 42(1) provides that:
(1)
The
court may,
in addition
to any
other
powers
it
may have,
mero
motu
or
upon the application of any party affected, rescind or vary:
(a)
An
order or judgment erroneously
sought or
erroneously
granted in the
absence of any party affected thereby;
(b)
an order
or judgment in which there is an ambiguity, or a patent error or
omission, but
only
to
the
extent of
such
ambiguity,
error or omission;
(c)
an order
or judgment granted as the result of a mistake common to the parties
.
[14]
Section 173 of
the constitution states that the Constitutional
Court, the
Supreme Court of Appeal, and the High Court of South Africa each have
the inherent power to protect and regulate their
process, and to
develop the common law, taking into account the interests of justice.
I agree with the submission of the respondents'
counsel that
section 173 of the Constitution is not applicable
in
the present
circumstances
and any
reliance thereon by the applicant is misplaced.
[15]
In his heads of argument and oral address, the applicant contended
that he had a good cause and a triable case with prima
facie
prospects of success in the main action based on the following:
15.1
He required an
opportunity to investigate the capacity in which the 2nd defendant
acted when he misappropriated the funds;
15.2
There was no
amendment of the summons as the affected clients of the attorney's
firm had filed their claims with the Legal Practice
Fidelity Fund and
these claims had either changed or been settled. The claims from
these erstwhile clients were ceded to the Fidelity
Fund and the first
plaintiffs lost their locus standi as a result.
15.3
The default
judgment was obtained against an unrepresented estate that had no
executor.
[16]
To
succeed, an applicant for the rescission of a judgment taken against
him by default must show good or sufficient cause. This
generally
entails that the applicant must:
[9]
(i)
give a
reasonable and acceptable explanation for his default;
(ii)
show that his
application is made bona fide; and
(iii)
show
that on the merits he has a bona fide
defence which
prima facie carries some prospect of success.
[17]
On
paper, it is clear that the applicant has no defence. The applicant
seeks an opportunity to investigate the merits to ascertain
whether
the respondents
have
a claim or cause of action against the insolvent estate. This
approach militates against the applicable legal principles
.
Rule
42(1), in which the applicant seeks solace
in
the alternative,
does
not
come
to
his
assistance
.
I
was
referred
to
a
passage
in
Lodhi
2
Properties Investments
CC
and
Another
v
Bondev
(Pty)
Ltd
[10]
which
I found apt and quote here in full:
"[27]
Similarly,
in a case where a plaintiff
is
procedurally
entitled
to judgment in the
absence
of
the
defendant
the
judgment if granted cannot be said to have been granted
erroneously
in the
light of
a
subsequently
disclosed
defence.
A Court
which grants
a
judgment
by
default like the
judgments
we are presently concerned with, does not grant the judgment on the
basis that the defendant does not have a defence
:
it
grants the judgment on the basis that the defendant has been notified
of the plaintiff's claim as required by the Rules, that
the
defendant, not having given notice of an intention to defend
,
is not
defending the matter and that the plaintiff
is
in
terms of the
Rules
entitled to the order sought
.
The
existence or non-existence of
a
defence on
the merits is
an
irrelevant
consideration
and, if subsequently disclosed, cannot transform
a
validly
obtained judgment into an erroneous judgment
.
"
[18]
The
applicant's defences are all based on speculation as he had no
evidence at all to substantiate his allegations. He speculated
that
the claims of the erstwhile attorneys'
clients
had
been
settled
or
honoured
by
the Legal Practice
Fidelity
Fund
and
that
the
latter
had
received
cessions
from
such
claimants
.
[11]
This
cession
of
claims affected the locus standi of the claimants
in
the summons.
[12]
He had no
proof of the settlement
of
such claims as he stated that
"
Although
I have
not
had
sight
of
these
claims
,
I
verily
believe
that
these
claims
were
honoured
alternatively have been honoured."
[13]
[19]
He
contended that the judgment was a nullity as the plaintiffs did not
wait for his appointment,
but
proceeded to obtain a default judgment against the estate that had no
captain to steer the ship.
[14]
This
approach is without merit as the third defendant was never removed as
an executor of the deceased estate and remained in that
position
until her death on 13 June 2023. The respondents contended that the
removal of the second defendant as an executor of
all deceased
estates by the court order of 12 March 2020, only came to their
attention when it was disclosed by the applicant in
his replying
affidavit. The 2
nd
defendant's
sequestration did not disqualify him from acting as an executor of a
deceased estate. The application for the
rescission of judgment
stands to be dismissed.
The
Rule 46A application
[20]
Uniform Rule 46(1) provides that:
(1
)(a)
Subject to the provisions of rule 46A, no writ of execution
against the immovable property of any judgment debtor shall be issued
unless –
(i)
a return has
been made of any process issued against the movable property of the
judgment debtor from which it appears that the
said person has
insufficient movable property to satisfy the writ; or
(ii)
such immovable
property has
been declared
to be
specially
executable by the court or where judgment is granted by the registrar
under rule 31(5).
[21]
Rule 46 deals
with the execution against immovable property other than the
residential immovable property of a judgment debtor,
the underlying
principle is that save where the immovable property has been
specially declared executable, execution shall not
be
issued
against the
immovable property until the movable property has been excussed and,
it appears that the movable property is insufficient
to satisfy the
writ. Rule 46A applies whenever an execution creditor seeks to
execute against the residential immovable property
of a judgment
debtor. Rule 46 does not lay down the procedure to be followed to
have the immovable property of a judgment debtor
(immovable property
other than the residential immovable property or primary residence of
the judgment debtor) declared to be specially
executable in terms of
this subrule. It is submitted that the court should, in the
application of this subrule, consider all legally
relevant factors,
and be satisfied that good cause exists for making the order.
[22]
The
first plaintiffs sought, in their notice of motion, condonation for
their failure to execute against the movables that might
still vest
in the Bekker Estate as the deceased had died on 20 November 2003.
Movable assets consisting of old motor
vehicles,
a
display
cabinet,
furniture,
and
jewellery
with
a
value
of
R165 670.00 (estimated as of 14 April 2010) vested in the estate. It
was established at an insolvency inquiry in March 2023 that
no one
knew the whereabouts of the movable assets.
[15]
Even if those assets were to be recovered, their value would not be
sufficient to settle the default judgment debt.
[16]
[24]
The first
plaintiffs pointed out that the provisions of Rule 46A were not
applicable in this case as the judgment debtor was a deceased
estate
and the individuals cited as the Second Interested Parties, did not
fall within the purview of Rule 46A. The latter were
given notice of
the application in terms of Rule 46A(3)(b)
as they might
be affected by the sale of the immovable property. The first
interested party did not dispute the above and raised
no defence to
the executability of the property save for the argument that, if the
application for the rescission of the default
judgment failed, there
must be compliance with Rule 46A, which was not done. In the
circumstances, the applicant cannot succeed
with the opposition of
the application, and the relief sought is denied.
[25]
As regards
costs, it is trite that the successful party is entitled to the
costs.
[26]
In the
premises, I make the following order:
Order:
1.
The
application for the rescission of judgment is dismissed with costs.
2.
The first
plaintiff's failure to execute against the movables that may still
vest in the Deceased Estate: Late EJ Bekker (ID: 1[…]);
with
Estate Number 744[…], who died on 20 November 2003, is
condoned;
3.
Pursuant to
the Default Judgment granted on
15 December
2022 against the second and the third defendants
in
favour of the
first plaintiff, the following immovable properties that vest in the
estate referred to in paragraph 2 above, are
declared executable in
favour of the first plaintiff:
3.1
Eden Small
Holding No. 41 [also known as Agricultural Holding Danzig No.41],
district Bethlehem, Free State Province; and
3.2
Portion 0
(Remaining Extent) of Erf No. 4[…], Bethlehem, Free State
Province, and
3.3
1
s
t
interested
party and 2
nd
defendant
to pay the costs of the Rule 46A application which shall include the
costs of the postponement of 21 September 2023
.
MHLAMBI,
J
On
behalf of Plaintiff:
Adv.
N. Snellenburg SC,
Adv.
JG Gilliland
Instructed
by:
Azar
& Havenga INC
65
Park Road
Willows
Bloemfontein
On
behalf of the Defendant:
Adv.
Boonzaaier
Instructed
by:
Callis
Attorneys
12
Milner Road
Bloemfontein
[1]
Paragraph
3.4.
[2]
Paragraph
9.9
of
the
founding
affidavit.
[3]
Paragraph
5.6
of the founding
affidavit.
[4]
Paragraph
18.l
of
the founding
affidavit.
[5]
Paragraph
9.4
of
the
founding
affidavit.
[6]
Paragraph
9.5
of the
founding
affi
davit.
[7]
Paragraph
9.7
of the particulars
of
claim.
[8]
Paragraph
4
of
the
applicant's
heads
of
argument.
[9]
RS
22, 2023,
DI
Rule
42-11;
Colyn
v
Tiger
Food Industries Ltd
t/a
Meadow
Feed
Mills
(Cape)
2003 (6)
SA
l
(SCA)
at
para
7
.
[10]
2007
(6)
SA
87
(SCA).
[11]
Paragraph
11.
2
of
the
founding
affidavit.
[12]
Paragraph
11.
3
of
the
founding affidavit.
[13]
Paragraph
11.2
of the found
i
n
g
affidavit.
[14]
Paragraph
18.1
of the founding affidavit.
[15]
Para
14.3.2 of the Founding Affidavit.
[16]
Para
14.3.5 of the Founding Affidavit.