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[2019] ZASCA 15
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Ketzer v Gardens Lodge Body Corporate (1073/17) [2019] ZASCA 15 (20 March 2019)
SUPREME
COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No: 1073/17
In
the matter between:
NORBERT
KETZER
APPELLANT
and
GARDENS
LODGE BODY
CORPORATE
RESPONDENT
Neutral
citation:
Ketzer v Gardens Lodge Body Corporate
(1073/17)
[2019] 15 ZASCA (20 March 2019)
Coram:
Navsa AP, Tshiqi and Swain JJA and Carelse and Matojane AJJA
Heard:
20 February 2019
Delivered:
20 March 2019
Summary:
Rule 14(1) of the magistrates’ court rules – interest
rightly disputed – calculation of capital amount claimed
–
inextricably linked to interest claimed – summary judgment
refused.
ORDER
On
appeal from:
Western Cape Division of the High Court, Cape Town
(Nuku AJ and Fortuin J concurring, sitting as the Court of first
instance):
1
The appeal is upheld and no order is made as to costs.
2
The order of the court below is set aside and substituted as follows:
‘
1. The appeal is upheld and no
order is made as to costs.
2. The order of the Magistrates’
Court is set aside and substituted as follows:
“
a. The application for summary
judgment is refused.
b. The defendant is granted leave to
defend.
c. No order is made as to costs.”’
JUDGMENT
Carelse
AJA (Navsa, Tshiqi and Swain JJA and Matojane AJ):
[1]
The issue in this case is whether the Magistrates’ Court, Cape
Town, should have granted summary judgment in favour of
the
respondent, the Gardens Lodge Body Corporate (the Body Corporate),
incorporated in terms of
s 36
of the
Sectional Titles Act 95 of 1986
,
against the appellant, Mr Norbert Ketzer, in an amount of R233
383.52, with interest at the rate of 34,8 per cent per annum
compounded
monthly plus costs on a scale as between attorney and
client as well as collection commission. The claim was based on
‘outstanding
levies and/or interest and/or costs’, in
relation to four units within the sectional title scheme administered
by the Body
Corporate. At the outset, it is necessary to record that
Mr Ketzer represented himself throughout the proceedings culminating
in
the appeal and was responsible for the drafting of his pleadings.
[2]
Mr Ketzer opposed an application for summary judgment by the Body
Corporate. The answering affidavit is somewhat obscure, but,
at the
heart of it, is a complaint that the claim, formulated as set out in
the preceding paragraph, included a claim for interest
at the
exorbitant rate of 38,4 per cent, impermissible charges for ‘legal
monitoring’ and collection charges. Mr Ketzer
complained that
the interest charged was not premised on the rules of the Body
Corporate, nor was it agreed. Four schedules were
attached to the
Body Corporate’s particulars of claim from which it appears
that in successive months, the amount claimed
in respect of
outstanding levies included interest and the other charges. Simply
put, interest was capitalised and the capital
amount shown as the
opening balance in each successive month included both the interest
and the other charges. The total amount
of R233 380.52 claimed, thus
comprised these constituent parts.
[3]
The opposing affidavit by Mr Ketzer, that is in respect of the
capital amount that might have been due and payable, put up no
viable
defence in relation to levies outstanding. The Magistrate, in
adjudicating the application for summary judgment, had regard
to Mr
Ketzer’s contentions in relation to a lack of authority on the
part of the Body Corporate to claim the amounts in question,
the
substance of which, for present purposes, it is not necessary to have
regard to. He did, however, raise questions about the
rate of
interest that the Body Corporate was entitled to charge on overdue
amounts. More about that later. The Magistrate took
the view that the
claim for outstanding levies for the period September 2012 until July
2014, in respect of the four units, was
‘a very simple,
straightforward claim’. The Magistrate was satisfied that Mr
Ketzer had failed to show that he had
a
bona fide
defence.
Consequently, an order was made in the terms set out at the
commencement of this judgment.
[4]
In adjudicating an appeal by Mr Ketzer, the Western Cape Division of
the High Court, Cape Town, (Nuku AJ with Fortuin J concurring)
disregarded the contents of a document obtained by Mr Ketzer from the
Registrar of Deeds which appears to be a unanimous resolution
of the
trustees of the Body Corporate, circumscribing the rate of interest
and the charges that may be imposed on unit holders.
That resolution,
limited the recovery of interest on overdue amounts to the prime rate
of the Body Corporate’s bank plus
two per cent. The high court
rejected Mr Ketzer’s reliance on the resolution, classifying it
as inadmissible hearsay evidence.
The high court also rejected Mr
Ketzer’s alleged counter-claim as well as his attempt to have
to resort to arbitration which
he alleged was provided for in the
rules of the Body Corporate. The high court went on to state that
none of the defences raised
by him had any merit and dismissed the
appeal with costs.
[5]
Before us, counsel on behalf of
the Body Corporate was constrained to concede that the rejection of
the resolution could not be
justified.
[1]
In
heads of argument on behalf of the Body Corporate, the following is
stated:
‘
If this Court is of the view
that Ketzer’s opposing affidavit, benevolently considered,
raises a dispute with regard to the
applicable interest rate, i.e. a
rate exceeding prime plus 2%, which could possibly be resolved by way
of arbitration, it is respectfully
submitted that:
(1) Ketzer does not dispute his
liability for levies in respect of his section, garage and/or parking
bays;
(2) Ketzer does not dispute his
liability for the payment of electricity charges raised;
(3) Ketzer concedes that he is
liable for payment of interest calculated at the prime rate plus 2%.’
It
was submitted on behalf of the Body Corporate that, in the event of
this court being inclined to hold that the interest rate
is in
dispute, it ought, in terms of Rule 14(6)
(b)
of the
Magistrates’ Court Rules, to find that the Magistrates’
Court should have given judgment in relation to that
part of the
claim which was not disputed.
[6]
Before us, the Body Corporate presented for consideration, a
recalculation based on the prime bank rate plus two per cent which,
it was submitted, amounted to a total of R184 103.07 being due rather
than the R233 380.52 that was initially claimed.
[7]
The offer to recalculate is, regrettably, too late. Mr Ketzer cannot,
at this late stage, contest the recalculation. It is not
clear to us,
nor should it have been to the Magistrate or to the high court, that
the interest and the other charges could be disentangled
from the
capital amounts. It is clear, however, that the interest claimed was
disputed on
bona fide
grounds. The rate is patently exorbitant
and disputed. If regard is had to the unanimous resolution presented
to the court below,
the compelling conclusion is that Mr Ketzer
justifiably disputed the rate of interest.
[8]
Having regard to the manner in
which the Body Corporate formulated its case by including, within its
capital claim, the justifiably
disputed interest rate and ostensibly
questionable charges, this is not an instance in which a court would
be justified in giving
summary judgment for part of the amount
claimed.
[2]
How, one might rightly ask, in these circumstances, could a court
determine an amount which it could confidently say was owing.
[9]
It follows that the appeal should succeed. Mr Ketzer, who appeared
personally before us, was urged to find a means of arriving
at a
mutually satisfactory method of calculating what was indeed owing in
relation to arrear levies and to make payment of the
amount so
agreed. He undertook to make every effort to do so. Since he appeared
personally, no costs in the conventional sense
were incurred by him.
[10]
The following order is made.
1. The appeal is upheld and no order
is made as to costs.
2. The order of the court below is set
aside and substituted as follows: ‘1. The appeal is upheld and
no order is made as
to costs.
3. The order of the Magistrates’
Court is set aside and substituted as follows:
“
a.
The application for summary judgment is refused.
b.
The defendant is granted leave to defend.
c.
No order is made as to costs.”’
__________________
Z
Carelse
Acting
Judge of Appeal
Appearances
For
the Appellants: Norbert Ketzer
For
the Respondent: H von Lieres
Instructed
by: Von Lieres, Cooper, Barlow & Hangone c/o Rossouws Attorneys,
Bloemfontein
[1]
See D R Harms Civil Procedure in the Superior Courts SI 54 at B-222.
[2]
See in this regard D E van Loggerenberg Erasmus Superior court
Practice SI 6 Vol 2 at D1- 418.