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[2014] ZAWCHC 170
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Firstrand Finance Company Limited v Wagner N.O and Another (17622/2008) [2014] ZAWCHC 170 (11 November 2014)
IN THE HIGH COURT
OF SOUTH AFRICA
(WESTERN CAPE
DIVISION)
Case No:
17622/2008
DATE: 11 NOVEMBER
2014
In the matter
between
FIRSTRAND FINANCE
COMPANY LIMITED
.........................
Applicant
And
PETER JAQUE
WAGNER N.O
.....................................
First
Respondent
PETER JAQUE
WAGNER
........................................
Second
Respondent
JUDGMENT
DELIVERED
ON 11 NOVEMBER 2014
VAN ROOYEN, AJ
[1]
This is an application in terms of
s 30
of
the
Administration of Estates Act, 66 of 1965
, to permit the sale of
immovable property (“the property”) co-owned by the
Second Respondent and the deceased estate
of his late spouse (“the
deceased”) who died on 6 April 2009. The Second Respondent has
been cited as the First Respondent
in his capacity as the executor of
the deceased’s estate which has not been finalised.
Procedural
History
[2]
The Applicant (“Firstrand”), a
bank, lent money (“the loan”) to the Second Respondent
and the deceased and
as security a mortgage bond in favour of
Firstrand was registered over the property.
[3]
In 2008 Firstrand instituted an action
against the Second Respondent and the deceased because, according to
Firstrand, they had
failed to make payments in respect of the loan.
Judgment for the payment of R95891 was sought against them jointly.
[4]
The Second Respondent and the deceased did
not file a notice of intention to defend and on 8 April 2009 default
judgment was granted
against them for payment of R95 891
together with interest, costs and an order declaring the property
executable.
[5]
Sometime later Firstrand discovered that
the deceased had in fact passed away shortly before the judgment was
granted. In December
2011 an application was therefore launched by
Firstrand in which it sought an order that the default judgment be
varied to reflect
the First Respondent, in his capacity as the
executor of the deceased’s estate, as a party.
[6]
The application launched in 2011 was not
opposed and on 3 February 2012 an order was granted in which the
default judgment order
was varied to reflect the First Respondent as
a party.
[7]
In March 2013 this application was
launched.
Defences
[8]
In their answering affidavit the
Respondents raised the following two categories of defences: (a) The
debt owing to Firstrand had
been settled; (b) Should the property be
sold in execution, the Second Respondent will be deprived of his
right to access to adequate
housing contemplated in s 26(1) of the
Constitution.
Denial
of the debt
[9]
The Respondents assert that they are not
liable to Firstrand for the following reasons: (a) Firstrand’s
records are inaccurate
regarding payments; (b) the interest rate
applied by Firstrand was incorrect; (c) there was no default at the
time the action was
instituted; (d) Firstrand was paid more than it
was entitled to; (e) the outstanding amount in respect of the bond
was inaccurate.
[10]
These
defences do not assist the Respondents as default judgment was
granted against them. No application for rescission of that
judgment
has been brought by the Respondents and, consequently, that judgment
is binding
[1]
.
Approach
to s 30 in view of the right to housing
[11]
Section 30 reads as follows:
“
No
person charged with the execution of any writ
or other process
shall
-
(a)
before the expiry of the period specified in the notice referred to
in section twenty-nine; or
(b)
thereafter,
unless
,
in the case of property of a value not exceeding R5 000, the Master
or, in the case of any other property,
the
Court otherwise directs
,
sell
any property in the estate of any deceased person which has been
attached
whether
before or after his death under such writ or process: Provided that
the foregoing provisions of this section shall not apply
if such
first-mentioned person could not have known of the death of the
deceased person.”
[2]
[12]
In
Gounder N.O. v ABSA Bank Ltd & Another
2008 (3) SA 25
(NPD) para
[15] the Court found that an order of executability in terms of Rule
46 of the Uniform Rules of Court can never amount
to a direction as
contemplated in s 30(b). It was found
[3]
that it would be undesirable to provide a numerus clausus of the
facts and circumstances which a court should take into account
in
deciding whether to make a direction contemplated in s 30(b). The
Court pointed out
[4]
that our
jurisprudence in this regard was largely undeveloped, the decisions
in De Faria v Sheriff, High Court, Witbank
2005 (3) SA 372
(T) and
Wright v Westelike Provinsie Kelders Bpk, supra, being the only
reported cases on s 30 at the time. It was stated
[5]
that “each case must obviously be evaluated and considered on
its own peculiar facts and circumstances.” The Court
continued
to state
[6]
that there are
considerations referred to by the Constitutional Court in Jaftha v
Schoeman & Others; Van Rooyen v Stoltz &
Others
[2004] ZACC 25
;
2005 (2) SA
140
(CC) which “might have to be” considered. The Court
considered s 30 in the context of the scheme of administration
envisaged in the Act and concluded
[7]
:
“
In
my view, it is only in exceptional cases that leave to sell an estate
asset through a process of execution should be entertained
before at
least the first liquidation and distribution account has been
approved, has lain for inspection and the period of objections
has
expired without any objection.”
[13]
Subsequently, and commencing with
Gundwana
v Steko Development & Others
2011 (3) SA 608
(CC), the
considerations referred to in Jaftha and which, according to Gounder,
“
might have to be” considered in the
application of s 30, have been amplified by our courts in the context
of Rule 46. I will
deal with that more fully below.
[14]
Like
any other statutory provision, s 30 must be interpreted in accordance
with the dictates of s 39(2) of the Constitution which
provides that,
when interpreting any legislation, every court must promote the
spirit, purport and objects of the Bill of Rights.
Consequently, s 30
must be interpreted through the prism
[8]
of s 26 of the Constitution which accords to everyone the right to
have access to adequate housing and which provides that no one
may be
evicted from their home without an order of court made after
considering all the relevant circumstances.
[15]
It
is for the same reason that a court, in considering whether property
should be declared executable in terms of Rule 46, will
perform
judicial oversight and, as was stated in Gundwana
[9]
:
“…
in
allowing execution against immovable property, due regard should be
taken of the impact that this may have on judgment debtors
who are
poor and at risk of losing their homes. If the judgment debt can be
satisfied in a reasonable manner, without involving
those drastic
consequences, that alternative course should be judicially considered
before granting execution orders.”
[16]
Consequently,
when a debtor stands to be deprived of his primary residence, the
approach to be followed with reference to s 26 of
the Constitution
before making an order in terms of Rule 46, should equally apply when
an order is sought in terms of s 30 of the
Act. Regardless of the
fact that the property has been declared executable in terms of Rule
46, this Court must therefore ensure
that, having regard to the
“peculiar facts and circumstances”
[10]
of this matter, an order permitting the sale of the property will be
in accordance with the spirit, purport and objects of s 26
of the
Constitution
[11]
. That is
particularly so when, as in casu, all relevant circumstances were not
raised and considered before a writ of execution
in terms of Rule 46
was authorised.
[17]
The authorities relating to the interaction
between Rule 46 and s 26 of the Constitution should therefore be
considered in the application
of s 30 of the Act when the subject is
the primary residence of a debtor.
More
reasonable means
[18]
The
Second Respondent, a 68 year old pensioner, receives a monthly
pension of R1 800 and the property is his primary residence.
In these
circumstances due regard should be taken of the impact that the sale
of the property may have on the Second Respondent
and “(i)f
the judgment debt can be satisfied in a reasonable manner”
without depriving the Second Respondent
of his primary residence,
“that alternative course should be judicially considered”
before granting an order that will
deprive the Second Respondent of
his primary residence.
[12]
[19]
The Second Respondent, in his answering
affidavit, stated that “Firstrand is well aware of my personal
Old Mutual policy that
was ceded to them as security, which policy is
currently worth approximately R450 000,00 and the policy matures and
pays out in
2016”.
[20]
The policy was not divulged in Firstrand’s
founding affidavit in this matter or in the pleadings before the
Court when default
judgment was granted. In its replying affidavit
Firstrand merely stated that it “is well aware of the policy
referred to”.
[21]
This
additional security may have an impact on the question as to other
reasonable means available to Firstrand. The current value
of the
policy exceeds the sum of the judgment debt by far. However, neither
of the parties has provided detailed information regarding
the terms
of the additional security and whether the Second Respondent will be
able to cash in the policy earlier than 2016. This
information is
necessary to establish whether the judgment debt can be satisfied in
a reasonable manner without depriving the Second
Respondent of his
primary residence.
[13]
[22]
In Standard Bank of South Africa Ltd v
Bekker and Another and Four Similar Cases
2011 (6) SA 111
(WCC) para
[25] it was stated that it is “the duty of a court to act
proactively to obtain whatever additional information
might appear
relevant for the purpose of consideration in terms of rule 46(1) if,
in a peculiar case, some or other feature of
the matter flashes
warning signals”. This applies in casu with the disclosure of
the cession of the policy as additional
security being a “warning
signal” that may not be ignored. Before I determine how
additional information in respect
of the policy is to be placed
before this Court, I will consider the duty of the parties in this
regard.
[23]
In
my view, it can be expected of a creditor to divulge all the security
it holds when it approaches a court for relief which, if
granted,
will lead to the sale of the primary residence of a debtor. That is a
necessary corollary of the principle that it should
be established
whether the judgment debt can be satisfied in a reasonable manner
without depriving the debtor of his primary residence
[14]
.
Additional security held by a creditor which can be resorted to for
purposes of paying a debt, may constitute such an alternative
and
should therefore be brought to the attention of a court to assist it
in performing its judicial oversight and in ensuring that
the spirit
of s 26 of the Constitution prevails.
[24]
In
any event, in circumstances such as these it is not only the debtor,
but also the creditor, who ought to divulge all relevant
information
relating to the security held by the creditor. It is information that
is within the knowledge of Firstrand which is
therefore to be
distinguished from the ordinary situation referred to in Standard
Bank v Bekker
[15]
where it is
for the debtor to alert a court to any facts or circumstances that
implicate his s 26 rights. This is a situation where
the creditor is
“able to comment upon the debtor’s ability to effect
payment of any arrears, by means other than allowing
execution
against his home to proceed”
[16]
.
[25]
Until
such time as further information about the nature of the policy, the
nature of the security held by Firstrand and information
as to
whether the policy can be cashed in earlier than 2016 be divulged,
this Court will not be in a position to determine whether
the
judgment debt can be satisfied in a reasonable manner without
depriving the debtor of his primary residence
[17]
.
[26]
In the circumstances it will be in the
interests of justice that both parties be given an opportunity to
file further affidavits
to deal with the outstanding information.
[27]
I therefore make the following order:
(a)
The Applicant shall file an affidavit
dealing with the Second Respondent’s Old Mutual policy, ceded
to the Applicant as security,
by 2 December 2014.
(b)
The Respondents shall file an answering
affidavit (if any) dealing with the affidavit of the Applicant
referred to in (a) above
within 15 days of service of the Applicant’s
affidavit.
(c)
The Applicant shall file a replying
affidavit (if any) dealing with the Respondents’ answering
affidavit referred to in (b)
above within 10 days of service of the
Respondents’ affidavit.
(d)
As soon as the affidavits referred to above
have been filed, any of the parties may set the matter down for
hearing on the opposed
motion roll.
(e)
All questions of costs shall stand over for
later determination.
VAN
ROOYEN, AJ
[1]
Wright
v Westelike Provinsie Kelders Bpk
2001
(4) SA 1165
(C) paras [34]-[35] referred to with approval in
MV
Ivory Tirupati and Another v Badan Urusan Logistik (aka Bulog)
2003 (3) SA 104
(SCA) para [30]
[2]
Emphasis
supplied
[3]
Para [19]
[4]
Para
[19]
[5]
Para
[19]
[6]
Para
[22]
[7]
Para
[26]
[8]
Investigating
Directorate: Serious Economic Offences and Others v Hyundai Motor
Distributors (Pty) Ltd and Others: In re Hyundai
Motor Distributors
(Pty) Ltd and Others v Smit NO and Others
[2000] ZACC 12
;
2001
(1) SA 545
(CC) para [21]
[9]
Para [53]
[10]
Gounder
para
[19]
[11]
This
requirement is in addition to the necessity to bear in mind that s
30 must be applied in the context of the scheme of administration
envisaged in the Act, as was pointed out in
Gounder
para
[26]
.
[12]
Gundwana
para
[53]
[13]
Gundwana
para
[53]
[14]
Gundwana
para
[53]
[15]
Para
[26]
[16]
Firstrand
Bank Ltd v Folscher and Another, and Similar Matters
2011
(4) SA 314
(GNP) para [43]
[17]
Gundwana
para
[53]