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[2015] ZAWCHC 138
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Gongxeka v Standard Bank of SA Limited (2320/2014) [2015] ZAWCHC 138 (12 August 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE DIVISION,
CAPE TOWN)
CASE NUMBER: 2320/2014
DATE: 12 AUGUST 2015
In the matter between:
Z
GONGXEKA
.........................................................................................................................
Applicant
And
STANDARD BANK OF SA
LIMITED
................................................................................
Respondent
J U D G M E N T
DAVIS, J:
This is an
application for rescission of part of a default judgment granted
against the applicant on 14 March 2014. In terms of
an order granted
by Rogers, J default judgment was ordered for the payment of R495
810.73 together with interest and costs, together
with an order
declaring the mortgage properties specially executable.
Of significance
was a condition attached to the sale of execution which reads thus:
“No sale of
execution pursuant to this order shall take place on the date earlier
than 6 months from the date of this order.
The respondent was
notified that in terms of
section 129(3)
of the
National Credit Act
34 of 2005
he may at any time prior to the sale of execution of the
property reinstate the credit agreement by paying to the applicant
all
amounts that are overdue (i.e. in arrears) together with the
applicant’s permitted default charges and reasonable costs on
enforcing the agreement up to the time of reinstatement, which
amounts charges of costs the applicant must on enquiry from the
respondent furnish to the respondent. If the credit agreement is
reinstated by payment as aforesaid, the property may not be sold
in
execution.”
It is common cause
that a sale of execution was held on 14 August 2014. This took place
prior to the end of the 6 month period
provided fo r in the order of
Rogers, J. Mr Jonker, who appeared on behalf of the first
respondent, correctly conceded that the
sale in execution must be set
aside. It was a patently illegal act because it breached the clear
conditions of the order granted
by Rogers, J.
However, the
applicant seeks a rescission of paragraph 4; that is the declaration
that the movable property is specially executable
together with the
award of costs. In terms of Rule 31(2)(b) of the Uniform Rules of
Court, a defendant may within 20 days after
he or she has knowledge
of such judgment apply to Court upon notice to the plaintiff to set
aside such judgment and the Court may
upon good cause shown set aside
the default judgment in such terms as it seems meet.
It is well
established law that in order for an applicant to establish good
cause the applicant must:
(1) Present a
reasonable and acceptable explanation for the default and;
(2) Must show a
bona fide defence which prima facie carries some prospects of
success. (See for example Vilvanathan Nathan and
Another v Louw N.O.
2010 (5) SA 17
(WCC) at 27).
In this case the
applicant provides the following explanation insofar as her default
is concerned:
“On or about
May 2014 I received from my mother an index relating to this matter
which index was served at my mother’s
house at No. 14 Bhunga
Avenue in Langa Township.”
I should add that
the index to which the applicant refers is a bundle of the papers
which were issued in order to justify the grant
of the default
judgment, including all of the relevant supporting documentation.
The applicant continues:
“I never
received the papers at my house in Kuilsriver. Upon receiving the
papers I noticed that the papers indicated to
a date for the hearing
of this matter on 14 March 2014 and I asked my mother why she would
take so long to inform me about the
Court papers and she indicated
that she feared for my stress levels as I already had too much on my
head as a result of my father’s
health. I immediately called
the number on the papers which appears to be the number of the
correspondent of first respondent’s
attorneys ... no one knew
anything about the matter and there was no other number available.
Around about the same time I was
already solely responsible for the
care of my father who was very sick with cancer. I also worked shift
work which meant I had
little time to do anything besides caring for
my father. I am the only child of my father and all other family
members have deserted
him. When I struggled to get hold of the
applicant’s attorneys my mind went off and all I could think of
was my father coupled
with the financial strain I was taking as a
result of his condition. My father succumbed to his illness and
passed away on 26
December 2014 and again as the only child I was
faced with the responsibility of ensuring that he is buried with
dignity. The
funeral was held on 8 January 2015 ... around the same
time I received another set of papers from third respondent for my
eviction
and it was then when it dawned on me. I ran around looking
for a legal representative to assist me in resolving this matter.”
Attached to these
submissions are the papers upon which the order for eviction which
was procured in the Magistrate’s Court,
Kuilsriver on 25 August
2014 was based. It appears that, while applicant provided a partial
explanation for the very lengthy delay
of some 9 months before this
application was launched on 2 February 2015, the delay is a lengthy
one and the explanation is a sketchy
one.
Given the drastic
consequences of the loss of a primary residence, one could have
expected a more expeditious response on the part
of the applicant.
There is one
aspect however which, in my view, needs to be taken into account. It
is true that the first respondent served papers
on the applicant’s
domicilium citandi et executandi which had been provided by the
applicant when the initial contractual
agreements were concluded
between first respondent and the applicant. The applicant, however,
says notwithstanding that the papers
were sent to this address (that
is her mother’s address), she was under the impression that
this was the address for the
purposes of the initial correspondence.
She was unaware of the meaning of the phrase domicilium citandi et
executandi. Its meaning
was never explained to her.
“It was only
explained as an address where I’m staying prior to staying in
the house concerning the credit agreement.”
She goes on to
say:
“I bought
the house for residence and the most logic explanation would be that
I receive all communication about my house
at my house and not
someone else. Certainly had that happened it may have saved a lot of
trouble.”
I agree with this
observation. It appears to me, and without setting out a general
rule for these cases (because many who enter
into agreements of this
kind with banks are sophisticated people who doubtless understand the
nature and significance of the concept
of domicile), banks, such as
first respondent, in dealing with a customer who may not be educated
and whose first language is not
English, owe some duty to explain the
significance of this key term, including the point that all
correspondence thereafter will
be delivered to this address.
It is not
acceptable to treat the entire population in this country as a single
constituency living in a developed world where the
citizenry can
understand sophisticated contracts, phrased in a language which is
often not the client’s first language.
This case
highlights this problem and, in my view, banks should undertake a
duty of care to their clients in the appropriate case,
I can only but
agree with the applicant that, had this happened it may well, to use
her words, have saved people “a lot of
trouble”.
Be that as it may,
applicant contends that she never received the notice in terms of
section 129
of the
National Credit Act, even
though it is not
disputed that the notice was delivered in terms of the accepted legal
position. See Kubyana v Standard Bank of
South Africa Limited
2014
(3) SA 56
(CC) at para 54.
The question then
arises as the bona fide defence. Applicant’s answer is
ambiguously set out.
On the one hand
the applicant says:
“Had I been
present at the proceedings I would have argued that the amount of
arrears sought by first respondent were not
so high to justify
dispensing with executing my property. I would have had means to
secure the arrear amount or alienate my immovable’s
to satisfy
the arrear amount, still I maintain I can do so.”
Shortly thereafter
she says:
“Since his
passing (that of her father) I have managed to receive some funds and
now am in a position to settle all the arrears
of the capital debt
and continue with payment.” (my emphasis)
There has to be
some doubt as to whether these passages, on their own constitute a
bona fide defence. After careful consideration,
I do not consider
that, on these papers, a sufficient case has been out for rescission
of judgment.
That is not
however the end of the matter. Not only did the applicant sell the
property prior to the 6 month period which I have
indicated, but
there was no service of the relevant order on the applicant. In my
view, non service defeats the very purpose of
the annexure to the
order, as set out in this judgment.
As Mr Jonker
noted, often these clauses are inserted into an order, after an
appearance from a respondent on the day in which default
judgment is
sought by the applicant. When the respondent does not appear in
Court, as was the case with this applicant, it defeats
the very
purpose of the safeguard that a party such as the applicant does not
receive notice thereof. What is the point of the
order, one might
ask rhetorically, unless there is service? If an order is granted,
as was the case in the present dispute, service
of the order must be
effected upon the defendant.
Mr Jonker informs
me that the practice is that service is affected. This may well be
the position. It must be a mandatory requirement
and not one that is
exercised in a discretionary fashion. In this case service did not
take place. This has consequences for this
case. In the first place
the sale of execution must be set aside because there was
non-compliance with the 6 month period. Secondly,
the safeguards
which were provided by Rogers, J for the applicant in this case
served no purpose because of the absence of service.
The implications
were made clear by Rogers, J in Nkata v First Rand Bank
2014 (2) SA
412
(WCC) at para 55 where the learned Judge says this:
“My
conclusion is thus that the mortgage loan agreements were reinstated
by not later than 8 March 2011 when the arrears were
cleared for the
first time. As foreshadowed earlier, I consider it to be necessarily
implicit in
S 129(3)
read with
S 129(4)
that, if a credit agreement
is reinstated before the execution of a monetary judgment enforcing
that agreement, the judgment can
no longer be enforced. If the
consumer again falls into arrears, the credit provider can only
approach the court for an order
enforcing the reinstated agreement
after compliance with
s13.
The earlier judgment cannot on this
ground be rescinded but by operation of law it seizes to have any
further affect.”
This respresents a
luminous exposition of the law as I understand it. En passant Mr
Jonker properly referred me to the judgment
in First Rand Bank v
Nkata
[2015] ZASCA 44
in which Willis, JA on behalf of a unanimous
Court which overturned the judgment of Rogers, J in Nkata, supra.
However, whatever
the broader implications of Willis JA’s
judgment, the paragraph that I have cited, which in my view reflects
the law accurately,
was left undisturbed and it must be followed.
This means that
the proposed order that I will grant is designed to provide the
applicant with a further period of time to repay
the arrears, default
charges and reasonable costs of enforcing the agreement so that the
agreement may be reinstated. If this
is the case, not only may the
property not be sold in execution but, were there to be a failure of
compliance in the future by
the applicant, it would then rest upon
the first respondent to approach the Court for a fresh order. This
result balances the
rights of both sides in the best possible way.
(1) IN THE RESULT
THE APPLICATION SUCCEEDS IN
PART IN
THAT THE SALE IN EXECUTION IS SET
ASIDE AND THE DEEDS REGISTRAR IS PREVENTED AND INTERDICTED FROM
TRANSFERRING ERF 21329, KUILSRIVER
TO WESTERN CAPE PROPERTY ALLIANCE
(PTY) LIMITED.
(2) THE AUCTION
HELD ON 14 AUGUST 2014 AGAINST ERF 21329, KUILSRIVER BY THE
KUILSRIVER SHERIFF IS SET ASIDE.
(3) THE IMMOVABLE
PROPERTY WHICH HAS BEEN DESCRIBED IS DECLARED SPECIALLY EXECUTABLE
AND TO THIS END A ROUTE OF EXECUTION MAY BE
ISSUED AS ENVISAGED IN
TERMS OF RULE 46(1)(A) OF THE UNIFORM RULES OF COURT, HOWEVER NO SALE
IN EXECUTION PURSUANT TO THIS ORDER
SHALL TAKE PLACE ON A DATE
EARLIER THAN 4 MONTHS FROM THE DATE OF THIS ORDER.
(4) THE APPLICANT
IS NOTIFIED THAT IN TERMS OF
SECTION 129(3)
OF THE
NATIONAL CREDIT
ACT 34 OF 2005
SHE MAY, AT ANY TIME PRIOR TO THE SALE IN EXECUTION OF
THE PROPERTY, REINSTATE THE CREDIT AGREEMENT BY PAYING TO THE
RESPONDENT
ALL AMOUNTS THAT ARE OVERDUE (THAT IS THE ARREARS)
TOGETHER WITH THE APPLICANT’S PERMITTED DEFAULT CHARGES AND
REASONABLE
COSTS OF ENFORCING THE AGREEMENT UP TO THE TIME OF
REINSTATEMENT, WHICH AMOUNTS, CHARGES AND COSTS THE RESPONDENT MUST
FURNISH
TO THE APPLICANT WITHIN 10 DAYS OF THIS ORDER HAVING BEEN SO
GRANTED.
(5) IF THE CREDIT
AGREEMENT IS REINSTATED BY PAYMENT AS SET OUT, THE PROPERTY MAY THEN
NOT BE SOLD IN EXECUTION.
(6) THERE IS NO
ORDER AS TO COSTS.
DAVIS, J