ABSA Bank Limited v Siyabuya Investments CC and Another (59714/2017) [2018] ZAGPPHC 916 (30 November 2018)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG HIGH COURT DIVISION, PRETORIA

(1) REPORTABLE: YES/NO

(2) OF INTEREST TO OTHER JUDGES: YES/NO

(3) REVISED

Case no: 59714/2017

30/11/2018

In the matter between:

ABSA BANK LIMITED

Applicant

and

SIYABUYA INVESTMENTS CC

1st Respondent

JOEY MARIANNE FOURIE

2nd Respondent

J U D G M E N T

MNGQIBISA-THUSI, J

[1] This is an application for summary judgment against the respondents in which the applicant seeks the following relief:

1.1 payment in the sum of R282, 580.86;

1.2 payment of interest on the amount of R282, 580.86 at the rate of 8.85% per annum payable from 10 June 2017 to date of payment;

1.3 an order declaring Portion 33 of the Farm Highlands 240, Registration Division: Mpumalanga Province, measuring 7, 2238 (seven comma two two three eight) hectares, held by Deed of Transfer T 126985/2007, subject to the conditions therein contained ("the property"),

specially executable;

1.4 an order in terms whereof the Registrar is directed to issue a warrant of execution against the property mentioned in terms of Rule 46 of the Uniform Rules of court.; and

1.5 costs to be taxed.

[2] It is common cause that during August 2007, the applicant, ASSA Bank Limited, granted the first respondent, Siyabuya Investment CC, a loan of R488, 000.00. Further, that an additional amount of R97, 600.00 was charged. The loan agreement was covered by a mortgage bond over the property. The second respondent, Ms Joey Marianne Fourie, bound herself as surety and principal co-debtor for the loan.

[3] It is further common cause that the first respondent is in default of its monthly payments. The applicant alleges that at the time summons were issued (on 28 August 2017), the loan account was in arrears in the amount of R42, 381.86, which amount is disputed by the respondents. The total amount due under the loan agreement is R282, 580.86 plus interest.

[4] Despite the applicant having delivered a notice in terms of section 129 (1)(a) of the National Credit Act,[1] on the second respondent, the respondents failed to remedy the first respondent's default. The applicant served summons on the respondents (on 1st and 4th September 2017). The respondents entered appearance to defend on 15 September 2017 and filed their affidavit resisting summary judgment, deposed to by the second respondent. On 21 September 2017 the applicant applied for summary judgment.

[5] It is also not in dispute that the property is vacant land and is not the primary home of the second respondent.

[6] In their affidavit resisting summary judgment, the respondents, besides denying that opposition is merely to delay finalisation of the applicant's claim, raise three preliminary points.

[7] Firstly, the respondents allege that the applicant fails to address the issue of jurisdiction in its particulars of claim and in its application for summary judgment particularly as the property is situated within the Mbombela area, Mpumalanga; the mortgage agreement and the suretyship were signed in Mbombela; and the second respondent is domiciled and resident in Mbombela. The respondents allege that the Mbombela Circuit Court and not this court has jurisdiction to hear this matter. Secondly, the respondents allege that the applicant's particulars of claim do not comply with uniform rule 18(6) in that in its particulars of claim the applicant failed to allege where the loan agreement was concluded. Thirdly, the respondents allege that the deponent to the affidavit in support of summary judgment application, Mr Ngoanatholo Cedrick Matsepe ("Mr Matsepe"), does not have personal knowledge as to the cause of action as he was not involved when the mortgage agreement was concluded.

[8] With regard to the merits, the respondents dispute the amount of arrears allegedly owed. Further, the respondents allege that in view of the amount allegedly in arrears, the applicant was obliged, in terms of paragraph 10.17.4 of the Gauteng Local Division practice manual, to give them an opportunity to remedy their default. The respondents allege that the property was in the process of being sold at an amount of R1, 482, 000.00 when the applicant issued summons.

[9] The main argument during the hearing of this application was the point raised with regard to whether this court has jurisdiction to entertain this application.

Jurisdiction

[10] Section 21(1) of provides that:

" Persons over whom and matters in relation to which Divisions have jurisdiction

(1) A Division has jurisdiction over all persons residing or being in, and in relation to all causes arising ... within, its area of jurisdiction and all other matters of which it may according to law take cognisance,..."

[11] It was submitted on behalf of the respondents that the application should be dismissed on the ground that the Gauteng Division does not have jurisdiction to hear the matter. It is the respondents' contention, that since the second respondent is domiciled and resides in Mbombela and the property is situated in Mbombela, the applicant should have instituted its claim in the Mbombela circuit court. In this regard the respondents rely on the provisions of clause 2.1 of Practice Directive 1 of 2016 issued on 29 January 2016 by the Judge President of the Gauteng Division in terms of s 7(1) of the Superior Courts Act,[2] ("the Act"). It was further submitted on behalf of the respondents that the Practice Directive was mandatory. In support of their submission, reference was made to Nedbank Limited v Petrus Steyn Rossouw NO and Others,[3] and ABSA Bank v FCE Meyer,[4] , two matters which dealt with Practice Directive 1 of 2016 from different perspectives, had different interpretations of the Practice Directive but in the end came to the same conclusion on which court had jurisdiction to hear the matters.

[12] On behalf of the applicant it was submitted that the Gauteng Division retained its jurisdiction over matters arising from the Mbombela Province in that the Practice Directive was not mandatory. It is the applicant's contention that prior to the issuing and publication of Practice Directive 1 of 2017,[5] the Gauteng Division which came into effect on 1 September 2017, had jurisdiction to adjudicate on the matter. It was further submitted on behalf of the respondents that since the matter was instituted in August 2017, the provisions of clause 9 of the 2017 Practice

Directive are applicable and that it would be expedient, just and fair for this court to adjudicate on the matter.

[13] With regard to the determination of the areas of jurisdiction of the Divisions of the High Courts, s 50(2) of the Act provides that:

"The Gauteng Division shall aiso function as the Limpopo and Mpumalanga Divisions, respectively, until a notice published in terms of s 6(3),[6] in respect these Divisions comes into operation".

[14] On 15 January 2016, the Minister of Justice and Correctional Services issued and published,[7] in terms of s 6(3) of the Act, a Notice in which he determined certain Magisterial districts within the Mpumalanga Province, which

included Mbombela, as falling under the area of jurisdiction of the Gauteng Division.

[15] In Practice Directive 1 of 2016 the judge President of the Gauteng Division established the Mbombela and Middleburg circuit courts. Further, clause 2.1 of the Practice Directive provided that with effect from 1 February 2016, all actions and motion proceedings including urgent applications in any area in the Mpumalanga Province, were to be issued through designated officials and at offices situated at the specified Mbombela and Middleburg courts and were operate as the registrar's office of the circuit courts.

[16] On 1 September 2017 the Chief Justice, in terms of the s 8 (3) of the Act, issued and published a Practice Directive,[8] which reads in part as follows:

“1. All action and motion proceedings, applications including urgent applications as well as appeals in any area in the Mpumalanga Province shall, with effect from 1 September 2017, be enrolled and heard at the Mbombela and Middelburg Circuit Courts.

[17] Furthermore, with regard to matters pending before the Gauteng Division which ordinarily would have fallen under the Mbombela and Middelburg circuit courts, the clause 9 of the practice directive provides that:

"9.1 Cases pending in the Gauteng Division of the High Court, in respect of which either Mbombela or Middleburg Circuit Court would ordinarily have had jurisdiction, had those Circuit Courts been established at the time of the institution of those proceedings may, at the discretion of and for the convenience of the parties, including an earlier hearing, be transferred to the relevant Circuit Court.

9.2 Matters referred to in 9.1 will only be so transferred at the request of the parties and if the Judge President is of the view that it would be expedient or in the interests of justice to hold a sitting for the hearing of the matter or matters at that Circuit Court; or if any of the parties formally apply for a transfer in terms of section 52 of the Superior Courts Act[9].

[18] on the same day as the above-mentioned Practice Directive, the Judge President of the Gauteng Division issued and published Notice 1 of 2017,[10], in which the jurisdictional boundaries of the Mbombela and Middelburg circuit courts.[11] Further, the Notice makes it clear that the Pretoria Division is, with effect from1 September 2017 divested of its jurisdiction over matters arising from the magisterial districts falling under the jurisdiction of the Mbombela and Middelburg circuit courts

[19] The above notices came into effect on 1 September 2017.

[20] With reference with Practice Directive 1 of 2016, in the Rossouw matter (supra), the court dealt with a similar issue relating to the jurisdiction of this court vis a vis that of the Mbombela circuit court. In dismissing the application for summary judgment on the basis that, on its interpretation of clause 2.1 of the 2016 Practice Directive it had no jurisdiction, Khumalo J stated that:

"[16] The answer lies in the phrasing or wording of the JP's directive. It is actually notable when reading clause 2.1 of the directive that he used the word "shall" and also determined the effective date. So in terms of the language used, the directive is mandatory and not discretionary or optional. The Judge President of the Court

determines practicality and manages the functionary of the courts through the powers vested upon him by the Act. It is therefore reasonable that his directive would be mandatory".

[21] In the matter Meyer matter (supra), where the court was also faced with the interpretation of Practice Directive 1 of 2016 in a matter involving a respondent who was resident in Ballito, KZN but at the time of the conclusion of the agreement was resident in Mbombela. In coming to the conclusion that Judge President of a Division was not vested with powers of altering the jurisdictional boundaries of that Division Kubushi J held that:

"[39] ...Circuit courts are part of the High Court and thus fall under the jurisdiction of the Division of the High Court in which they have been established or are situated. The Mbombela circuit court has been established and is situated within an area falling under the Gauteng Division. Consequently, it is my conclusion that the Judge President's Directive does not establish a separate area of jurisdiction falling under the Mbombela circuit court or any other circuit court, to the exclusion of the Gauteng Division. As already stated earlier in this judgment, s 7(1) of the Act empowers the Judge President to establish circuit districts or courts, only".

[22] However, the court in the Meyer matter (supra), despite its finding that Practice Directive 1 of 2016 did not divest this court's jurisdiction with regard to matters emanating from Mbombela, in line with the decisions in the Lukhele and Rossouw matters (supra), it also was of the view that in promoting people's right of access to court and in the interests of justice, the Mbombela matter would have been the appropriate court to adjudicate on the matter as circuit courts were established in

.

order to bring courts closer to the litigants[12].

[23] I am in support of the view expressed by the court in the Meyer matter (supra) that even though the Judge President is vested with the power to establish circuit courts, the Judge President is not, however, vested with the power to change or alter the area of jurisdiction of his Division.

[24] At the time summons were issued in this matter on 25 August 2017, the Gauteng Division had jurisdiction to entertain matters emanating from the Mpumalanga Province, and in particular, Mbombela. However, when the matter was heard the Gauteng Division no longer had jurisdiction in matters arising from Mbombela. As the matter was already properly instituted in the Gauteng Division, it qualifies as a pending matter in terms of clause 9 of Practice Directive 1 of 2017. Neither party formally applied for its transfer to the Mbombela circuit court.

[25] The issue to be determined is whether it would be expedient and in the interest of justice to transfer the matter to Mbombela circuit court in light of the decisions in Lukhele; Rossouw and Meyer matters where the courts in concluding that either Mbombela or Middelburg circuit courts would be convenient in adjudicating on the matters on the ground that in order to promote the right of access to justice the court closest to where the respondent/defendant resides should be preferred.

[26] Inasmuch as the second respondent resides within the area of jurisdiction of Mbombela circuit court and the property which is the subject matter of this application is situated in Mbombela, and taking cognisance of the right to access to court, it could be said that transferring the matter to the Mbombela circuit court would be sensible. However, I am of the view that it would not be convenient, fair and expedient nor in the interests of justice to dismiss this application particularly as this court had jurisdiction to hear the application at the time it was instituted. In coming to this conclusion I have also taken into account following factors:

26.1 that the respondents do not dispute the fact that they are in arrears, even though the amount of the arrears is disputed;

26.2 that the respondents' arrears are low when one takes into account the outstanding amount of the loan and the period (approximately 9 years) during which the first respondent has been paying his instalments;

26.3 that the respondents were in the process of selling the property and if sold in the open market, the respondents will be in a position to regain some of their investment in the property;

26.4 that the property is vacant land; and

26.5 that the matter is already before the court and been argued.

[27] I am of the view that it would be in the interests of justice to give the respondents an opportunity of selling the property in the open market and, failing which that the property be sold on auction with a reserve price.

Compliance with uniform rule 18(6)

[28] It is the respondents' assertion that the applicant's particulars of claim do not comply with the provisions of uniform rule 18(6),[13] in that it fails to state where the mortgage agreement was concluded. It is the respondents' contention that the agreement was concluded in Mbombela. In Dass NO and Others v Lowewest Trading (Pty) Ltd[14] the court held that non-compliance with uniform rule 18(6) can be condoned in the absence of any prejudice to the other party. The respondents have not pleaded any prejudice due to the fact that the applicant did not state where the mortgage agreement was concluded. After all, there is common cause that a loan agreement was concluded , that the loan was covered by a mortgage bond and the terms of the agreements. I am satisfied that the applicant's non-compliance with the rule can be condoned as there is no prejudice suffered by the respondents due to non-compliance.

Failure to comply with uniform rule 32(1)(b)

[29] The last point raised by the respondents is that the application for summary judgment is not in compliance with uniform rule 32(2) in that the deponent to the applicant's affidavit in support in that the deponent to the applicant's affidavit in support of the summary judgment application does not have personal knowledge of the mortgage agreement the parties concluded as he was not involved at the conclusion of the contract.

[30] Rule 32(2) of the Uniform Rules of court provides that the affidavit in support of an application for summary judgment must be deposed to by a person who can swear positively to the facts and who can verify the cause of action and the amount claimed.

[31] In Maharaj v Barclays National Bank Ltd[15] the court stated, with regard to the requirements for an affidavit in support of a summary judgment application , at 423E­ H, that:

"The mere assertion by a deponent that he can swear positively to the facts (an assertion which merely reproduces the wording of the Rule) is not regarded as being sufficient, unless there are good grounds for believing that the deponent fully appreciated the meaning of these words .... While undue formalism in procedural matters is always to be eschewed, it is important in summary judgment applications under Rule 32 that, in substance, the plaintiff should do what is required of him by the rule. The extraordinary and drastic nature of the remedy of summary judgment in its present form has often been judicially emphasised.... The grant of the remedy is based upon the supposition that the plaintiff's claim is unimpeachable and that the defendant's defence is bogus or bad in law. One of the aids to ensuring that this is the position is the affidavit filed in support of the application; and to

achieve this end it is important that the affidavit should be deposed to either by the plaintiff himself or by someone who has personal knowledge of the facts".

[32] In Shackleton Credit Management (Pty) Ltd v Microzone Trading 88 CC and Another[16] the court held that:

"[13] First-hand knowledge of every fact which goes to make up the applicant's cause of action is not required, and that where the applicant is a corporate entity, the deponent may well legitimately rely on records in the company's possession for their personal knowledge of at least certain of the relevant facts and the ability to swear positively to such facts"[17].

[33] In the affidavit in support of the application for summary judgment, Mr Matsepe stated, inter alia, that:

"1. I am the ASSISTANT VICE PRESIDENT, HOME LOANS RECOVERIES DIVISION of Absa bank Limited and such duly authorised to make this this affidavit, which is in the nature and scope of my capacity as Assistant Vice President to have access to all the records in this matter.

2. The facts of this action, the cause of action and the underlying transactions giving rise thereto, are within my personal knowledge and to the best of my knowledge true and correct.

3. I have once again perused the details of the account on the computer system and I therefore have insight and/or knowledge of all documents pertaining to this matter.

4. The credit control department of the Plaintiff/Applicant monitors the payment of the Plaintiff/Applicant's various debtors. As soon as a debtor defaults, the Plaintiff/Applicant's policy is to contact the Debtor telephonically in an effort to rehabilitate the account and details of these conversations appears on the electronic system at my disposal. If these telephonic arrangements are unsuccessful, I am advised by the Credit Control Department and I then make a decision whether or not to hand the account over for collection and I hereby confirm that the account will not be handed over unless I am satisfies that acceptable efforts have been made by the Credit Control Department to make arrangements for payment of the arrears, and I hereby confirm that that aforementioned efforts have been made without success."

[34] I am satisfied that the deponent to the affidavit in support of the summary judgment application does have sufficient knowledge about the first respondent's account in that he deposes to the fact that he is involved in the monitoring of all accounts in default and he gives the go ahead on what action should be taken. This point raised by the defendant has to fail.

[35] Besides the points in limine raised by the respondents, which as indicated above do not have merit, the only bona fide defence raised by the respondents is that they were in the process of selling the property in the open market and if the sale was successful, they would have been in a position to repay the applicant the outstanding amount of the loan. The point about the amount of arrears being incorrect was not seriously argued. Further submitted that paragraph 10.17.4 of the Gauteng Local Division should have been complied with by the applicant by giving them the opportunity to remedy their default. I am of the view that this submission is misplaced in that the concession only relates to natural person and relates to property which is the primary residence of a respondent.

[36] I am therefore of the view that the applicant has made out a case for summary judgment to be granted. However, as indicated in paragraph 25 above, consideration has to be taken of the fact that the first respondent has been paying its instalments for some time and that the outstanding amount is small compared to the current value of the property. If the property is sold there is a possibility that it could be sold at a price far less than its value, to the prejudice of the respondents.

[37] In the result the following order is made:

1. The summary judgment application is granted subject to the following:

1.1 The respondents are to sell the property, within 40 days from the date of this order, in the open market and from the proceeds of the sale to pay to the applicant the outstanding amount, including interest at the rate of 8.85% per annum payable from 10 June 2017 to date of payment, within a month of registration of the property into the name of the purchaser.

2. Should the respondents fail to sell the property in the open market within the period stipulated in paragraph 1 above, summary judgment is granted against the respondents for:

2.1 Payment in the sum of R282, 580.86;

2.2 payment of interest on the amount of R282, 580.86 at the rate of 8.85% per annum payable from 10 June 2017 to date of payment;

2.3 an order declaring Portion 33 of the Farm Highlands 240, Registration Division: Mpumalanga Province, measuring 7, 2238 (seven comma two three eight) hectares, held by Deed of Transfer T 126985/2007, subject to the conditions therein contained ("the property"),

specially executable;

2.4 an order in terms whereof the Registrar is directed to issue a warrant of execution against the property mentioned in terms of Rule 46 of the Uniform Rules of court.; and

2.5 costs to be taxed.

NP MNGQIBISA-THUSI

Judge of the High Court

Appearances

For Applicant Adv PSAJ Jacobz (instructed by Hack, Stupel & Ross Attorneys) and for Respondents Adv. JC Kotze (instructed by Eunanda Fourie Inc.)

[1] Act 34 of 2005.

[2] Act 10 of 2013. S7(1) of the Act provides that: "The Judge President of a Division may by notice in the Gazette within the area under the jurisdiction of that Division establish circuit districts for the adjudication of civil or criminal matters, and may by like notice alter the boundaries of any such district".

[3] [Case number 4755/2016) [2016] ZAGPPHC 916 (24 October 2016) I was also referred to the matter of First National Bank v Lukhele & 7 others [2016] ZAGPPHC 616 (16 May 2016). However, the Lukhele matter is distinguishable from the present matter in that it dealt with whether the Mbombela and Middelburg circuit courts had concurrent jurisdiction.

[4]

[5]

[6] Section 6(3) of the Act reads as follows: "(a) the Minister must, after consultation with the Judicial Services Commission, by notice in the Gazette, determine the area under the jurisdiction of a Division, and may in the same manner amend or withdraw such notice. (b} The area under the jurisdiction of a Division may comprise any part of one or more provinces... (d) The publication of a notice referred to in paragraph (a) or (c) does not affect any proceedings which are pending at the time of such publication".

[7] Note 30 of Government Notice 1226 in Gazette number 39601.

[8] Notice 955 in Gazette number 41090.

[9] Notice 956 in Gazette number 41090.

[10] "1. The jurisdictional boundaries of the circuit courts of the Mpumalanga division are determined as follows- 1.1 the Mbombela Circuit Court shall have Jurisdiction in respect of civil and criminal matters emanating in and from the magisterial districts mentioned in PART A of the attached schedule. 1.2 The Middelburg circuit court shall have jurisdiction in respect of civil and criminal matters emanating in and from the magisterial districts mentioned in PART B of the attached schedule.

[10] "1. The jurisdictional boundaries of the circuit courts of the Mpumalanga division are determined as follows-

1.1 the Mbombela Circuit Court shall have Jurisdiction in respect of civil and criminal matters emanating in and from the magisterial districts mentioned in PART A of the attached schedule. 1.2 The Middelburg circuit court shall have jurisdiction in respect of civil and criminal matters emanating in and from the magisterial districts mentioned in PART B of the attached schedule.

[11] Clause 1.5 of the Notice reads as follows: "The Gauteng Division of the High Court shall, with the coming into effect of

this notice, cease to have jurisdiction in any matters emanating and arising in and from the Magisterial Districts set out in Parts A and B respectively".

[12] Meyer matter (supra) at para [43].

[13] Uniform rule 18(6) provides that: "A party who in his pleading relies upon a contract shall state whether the contract is written or oral and when and where and by whom it was concluded, and if the contract is written a true copy thereof or of the part relied on in the pleading shall be annexed to the pleading.

[14] 2011(1) SA 48 (KZD) at 53B-H.

[15] 1976 (1) SA 418 (A).

[16] 2010(5) SA 112 (KZP).

[17] See also FirstRand Bank Ltd v Trustees for the time being Huganel Trust and Others 2012 (3) SA 167 (WCC).