About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Western Cape High Court, Cape Town
SAFLII
>>
Databases
>>
South Africa: Western Cape High Court, Cape Town
>>
2014
>>
[2014] ZAWCHC 217
|
|
Nxazonke and Another v Civil Magistrate, Mitchells Plein and Others (21755/2012) [2014] ZAWCHC 217 (5 September 2014)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO
: 21755/2012
DATE
:
5 SEPTEMBER 2014
In
the matter between:
GOYI
GODFREY NXAZONKE &
ANOTHER
.............................................................
APPLICANT
And
THE CIVIL
MAGISTRATE, MITCHELLS
PLEIN
& 7
OTHERS
.....................................................................................................
RESPONDENT
JUDGMENT
DAVIS,
J
There
are two aspects to the application which have come before this
Court. The first is unopposed, the second the subject
to
contestation from the seventh respondent, and I will deal with it
presently.
The
substantive application was to set aside a default judgment and writ
of execution against the applicant’s home, as well
as
subsequent sales and transfers of their home at 2… N….
C……, K……. There are a
series of
justifications offered by the applicant for the relief sought,
including that the judgment & order were unconstitutional
and
could not have been granted had there been proper judicial
oversight. This relief is unopposed.
Briefly
the facts are as follows;
Applicants,
a married couple, moved into the property in 1986;
They
became 99 year leaseholders in 1988, and ultimately full owners in
1991;
In
1990 first applicant borrowed R30 000 from NedPerm Bank (now fourth
respondent in the form of Nedbank Group Limited) secured
by way of a
mortgage bond, in order to build on extra rooms and a bathroom;
It
appears that no written consent to this transaction was obtained
from the second applicant, as required in terms of the Matrimonial
Property Act, 88 of 1984 (see section 15(2) thereof);
It
appears that Nedbank was aware that first and second applicant were
married in community of property.
First
applicant made regular repayments of R500 to R600 every month until
2001 when he retired from his job as a hospital domestic
worker and
could no longer afford the repayments.
By
this stage he estimated that he paid the bank over R66 000. In
2001 the bank obtained default judgment against the applicants,
allegedly for an outstanding amount of R27 959, 49, which included
interest.
Notwithstanding
the value of the property being between R65 000 to R81 000, the bank
proceeded to acquire the property in a sale
in execution for R10.
I shall deal presently with this point.
In
2004 the bank transferred the property to People’s Bank which
immediately sold it to together with 17 other similar properties
to
Mpisi Trading (Pty) Ltd.
10.
Since 1986 it appears that the applicants
had undisturbed occupation of the property and were, as set out in
the papers, unaware
of the 2001 default judgment and the subsequent
sale of their home.
11.
In 2008 the second respondent took transfer
of the properties in an investment opportunity, using it to secure a
loan of R216 000.00
from the seventh respondent. The second
respondent subsequently defaulted on this loan and seventh respondent
obtained default
judgment against him in 2012. A judicial sale
in execution which was scheduled for 11 October 2012 was interdicted,
pending
the review on 4 October 2012.
12.
On 15 March 2013 first applicant passed
away and second applicant, in her capacity as executor of the estate,
was substituted in
his place in all further proceedings.
There
can be no doubt, following the decision in
Jaftha
v Schoeman and Others
,
Van
Rooyen v Stoltz & Others
2005(2) SA
140 (CC), that default judgment together with an order declaring the
property executable as took place pursuant to the
2001 default
judgment was unconstitutional and hence invalid. It was not
made by a judicial officer, after having taken account
of all the
relevant circumstances, and, particularly, the enquiry to whether the
order seriously compromised applicants’
constitutional right to
access to adequate housing.
The
Constitutional Court declared in its judgment in
Jaftha
that section 66(1)(a) of the Magistrate’s Court was
unconstitutional, to the extent that it failed to provide in a
consideration
of “all the relevant circumstances”
before issuing a writ of execution. It followed therefore that
the resultant
sale in execution was null and void; hence valid title
could not be passed. The purchaser in turn could not transfer
ownership
of the property to subsequent registered owners.
The
jurisprudence
in this connection has subsequently been expanded. In
Gundwane
v Steko Development & Others
2011(3) SA 608(CC) at para 41 the Constitutional Court said:
“
[e]xecution
may only follow upon judgment in a court of law. And where
execution against homes of indigent debtors who run
the risk of
losing their security of tenure is sought after judgment on a money
debt, further judicial oversight by a court of
law, of the execution
process is a must.”
The
present case presents another case study of how Courts are required
to balance competing rights to property on the one hand
and the right
to housing on the other.
The
act of the bank in selling the property and the earlier purchase of
the property for R10 is a truly distressing manifestation
of greed,
undermining cure promises contained in the Constitution and
accordingly the very substructure upon which the constitutional
guarantees to property and housing are predicated as set out in the
Jaftha
subject and the
juris prudence
that followed thereafter. The South African law of property,
post the advent of the Constitution is a combination of private
law
based upon the common law and public law sourced in the
Constitution. This holds implications for arguments based on
averments based on a double right to ownership of property.
DELAY
Insofar
as delay is concerned, in that the matter has taken a very long time,
this concern is addressed by way of a full explanation
by the
applicants. It does not appear that the length of time taken
should be an obstacle to the relief that the applicants
now seek.
As the applicants set out in their papers they did not bring an
application to set aside the default judgment earlier
because:
When
the default judgment was granted they were unaware of the summons.
They were subsequently unaware that their home had
been sold in
execution.
No
one ever attempted to evict them or to assert any ownership right
over the property.
They
were advised by the legal representatives once they became aware
that their house had been sold, against taking further action.
THE
SUBSTANCE
There
can be no doubt that, faced with this factual matrix, a Court would
not have granted judgment, particularly in the light of
various
defences, including that the bond was invalid, having been entered
into without the consent of second applicant; the amount
claimed
which was just R28 000, and unsupported by information provided to
the Court; the original loan had been in the amount
of R30 000
and applicant had paid off approximately R66 000 over eleven years;
further first applicant had paid to the bank regular
monthly
instalments until February 2001. Thus the unpaid arrears due to
the bank by May 2001 and August 2001 could not have
been in excess of
R2 000 or R3 000.
Further
the applicants were impoverished. Mr Nxazonke is an old age pensioner
and his wife a part-time domestic worker. The
house was their
primary, indeed their only residence. It represented their one
opportunity to access State subsidised housing
which they received as
a first time homeowner. This is a heavy factor to be taken into
account.
Furthermore,
the applicants were lacking in legal knowledge, without the means to
access legal representation and hence unable to
defend themselves
adequately. Fortunately they came across the Legal Resources
Centre, which, to its great credit, has taken
on their case and hence
ensured that they are not deprived of their only home, in
circumstances where they had no alternative accommodation,
no access
to adequate housing and thus would be left homeless. The impact
would have been to prejudice them disproportionally
when compared to
the inconsequential pressures that will be suffered by the creditor,
a large commercial bank.
The
fact – to return again to the core issue – that the Bank
purchased their house for R10 - is itself so gross a manifestation
of
bad faith and an abuse of dominance to be a cause of great concern.
In his recent book, Thomas Piketty,
Capital
in the 21
st
Century
, speaks about the serious and
endemic problem of inequality. Significantly Piketty commences
the book with two pages of description
of the Marikana tragedy.
Hence this seminal analysis narrative of inequality is foreshadowed
by the South African pattern
of inequality, and the manner in which
the mining sector in South Africa has not delivered fairness, dignity
and equality to workers
who work in dangerous conditions, even twenty
years since the fall of Apartheid.
I
would have thought that large commercial institutions such as banks
should heed what Piketty has to say, and ensure that when
these kind
of proceedings are initiated, they are performed in good faith,
indeed in the utmost good faith, with clear cognisance
of the
relevant constitutional rights, particularly and the rights of
impoverished people not to be evicted from their homes, which
action
is reminiscent of our dark past. All of these factors are cause
for grave concern in terms of the manner in which
the bank sought to
sell this property in execution.
In
short, there is no basis by which the substantive relief upon which
the application is predicated could have been resisted, nor
was it in
argument before this Court.
I
turn to the second point, which was a question of costs. There has
been opposition by the seventh respondent, which position is
now set
out in a fairly lengthy narrative. When this application was
launched, it appears that seventh respondent opposed the application,
but then failed to file any opposing papers until the applicants
sought a chamber book application.
Once
the opposing affidavit was filed, it was clear that the real concern
which seventh respondent then had concerned certain allegations
that
had been made against them in the founding affidavit. The fundamental
problems they raise were the following: when default
judgment was
granted against the second respondent under case number 503/2011,
there were significant difficulties in relation
to this application.
In the first place the notice of service of the application for
default judgment reflected that the
applicant “stays at given
address since 1985”. Accordingly there was no indication
on the service that it was
the second respondent who resided at this
particular address, which properly was the subject of the default
judgment.
Furthermore
the papers had caused certain concern to
Baartman,
J
prior to granting the order. The
attorney acting on behalf of the seventh respondent deposed to an
affidavit on 25 August 2011,
the day before the order was granted. In
this she says:
“
I
have confirmed with plaintiff that the risk mitigation officer
visited the premises at 2… N…. C…., K……,
on 3 February 2011. The officer personally spoke to the
defendant, who was present at the premises on that date. The
defendant confirmed that it was the correct address.”
When
the matter was stood down on 25 August 2011, prior to judgment which
was to be given the next day, it appears that the doubts
which had
been expressed by the judge about the anomalies on the papers,
generated a further affidavit, deposed this time on behalf
of the
seventh respondent by Mr Cyril Daniels, who described himself as risk
mitigating officer appointed by the plaintiff. I can
only assume that
he was the same risk mitigating officer referred to by Ms Chandler in
her affidavit.
Mr
Daniels’ affidavit is particularly interesting. He says:
“
I
attend sites to inspect the properties to ascertain who is living at
the property, what the stance of the property is and whether
the
physical address corresponds with the addresses per the bond.
On
26 August 2011 I inspected Erf 3…., K…. being 2…..
N….. C……, K…... I confirm
herewith that
the address corresponds with the erf and further confirm that the
property is occupied by tenants claiming to be
the owner.”
This
affidavit indicates that, read as a whole, the person who claimed to
be owner was the applicant, not the second respondent.
Certainly what
this affidavit did not do was to confirm the contents of the
affidavit which had been deposed to the day before
by seventh
respondent’s attorneys.
In
short, this documentation does, in my view, justify the averment in
paragraph 62 of the founding affidavit in these proceedings:
“
ABSA
appears to have failed to comply with its obligation to bring all the
relevant circumstances to the attention of the Court
in an
ex
parte
application and there are at
least indications that this Court might have been misled in the
course of the granting of default
judgment against Wilkens.”
Ms
Treurnicht
,
who appeared on behalf of the seventh respondent, submitted, in
essence, that there were two bases by which the costs of this
application should not be paid for by the seventh respondent. In the
first place, she submitted that as the Court had been satisfied
on
the papers that default judgment was justified, there could be no
basis for the allegations which are now contained in the paragraph
of
the affidavit to which I have made reference, read together with the
previous paragraph, the essential contents of which I summarised
earlier in this judgment.
This
can surely not be the test. Judges are generally placed under
significant pressure when they grant default judgments in a busy
unopposed court, with a long roll. They are dependent upon counsel to
bring to their attention all of the details of the matter,
or, at the
very least, to ensure that attorneys acting on behalf of the
applicant for default judgment, do the same. If Ms
Treurnicht’s
submission was correct it would mean that it would be almost
impossible to rescind a default judgment.
What
this Court is required to do is to examine the contents of the
affidavit, in this case the founding affidavit, and, at the
very
least, to divine whether there was some form of justification which
necessitated opposition which, in turn, generated further
costs for
the applicants in that the entire application appears now to have
been opposed.
It
would have been far preferable, it seems to me, for the respondent to
have placed on record an affidavit which explained its
position, but
without opposition. This would have allowed this matter to have gone
forward on an unopposed basis and would have
reduced the costs
considerably insofar as the applicant is concerned.
Mr
Hathorn
,
who appears together with Ms
Harvey
,
on behalf of the applicants, was entirely correct to point out that
in the opposition there was no further affidavit deposed to
by Ms
Chandler or Mr Daniels to clarify that which had been said. The
opposing affidavit was deposed to by Ms Naidoo, who
had no personal
knowledge of any of the factors to which I have made reference.
The
further possible opposition, which was prefigured, at least
tangentially, in the founding affidavit, that the applicants might
seek to set aside the default judgment to which I have made
reference, was not placed in issue. In a letter of 3 June 2013
Mr Kahanowitz, applicants’ attorney clarified that this was to
be left to the discretion of the Court, for reasons which
are clear,
namely that there is no need for this Court not to exercise this
discretion.
In
my view, given the conduct of the seventh respondent, and in
particular, that it sought to oppose the application and file
an
opposing affidavit, after noting its opposition, is sufficient
justification, given the facts that I have analysed, to conclude
that
in this case and on these particular facts, seventh respondent should
be ordered to pay the costs.
In
the result I would make the following order:
The
order granted by default in the Mitchells Plein Magistrate’s
Court
on 1 August 2001, alternatively
14 May 2001, giving judgment against the applicants in favour of
Nedcor Bank Limited (Nedcor)
in the amount of R27 959, 49 declaring
Erf 3…. K…. situated at 2… N….. C…...
K…...
Cape Town executable is
HEREBY
SET ASIDE
.
The
warrant of execution
against the property issued pursuant to default judgment referred to
in paragraph 1
is set aside
.
The
sale in execution of the property
on
11 October 2001 in which the property was purchased by Nedcor for
R10
and all subsequent sales of the
property is hereby declared to be null and void
.
The
applicants are declared to be the owner
of the property
.
The
eightH respondents ought to rectify the
deeds registry to rectify that the applicants are the registered
owners of the property
.
Seventh
respondent ought to pay the costs of this application, including the
cost of two counsel
.
It
is so ordered.
DAVIS,
J
I
agree,
MANTAME,
J