Firstrand Bank Limited t/a Wesbank v Mogodiri (27192/2019) [2020] ZAGPPHC 126 (7 April 2020)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

THE HIGH COURT OF SOUTH AFRICA (GAUTENG DIVISION, PRETORIA)

(1) REPORTABLE: YES/NO

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

(3) REVISED.

CASE NO: 27192/2019

7/4/2020

In the matter between:

FIRSTRAND BANK LTD T/A WESBANK

Respondent/ Plaintiff

and

SELLO ELLY MOGODIRI

Applicant/ Defendant

JUDGMENT

COWEN AJ

[1] The applicant, Mr Sella Mogodiri has applied to rescind a default judgment granted by this Court against him in his absence. The order was granted in favour of the respondent, Firstrand Bank Ltd t/a Wesbank on 28 May 2019.

[2] The dispute between the parties arises from a credit agreement for the purchase of a Mercedes Benz C200 AMG Line A/T motor vehicle ('the vehicle'). In terms of the agreement, the applicant would pay a deposit of R120 000 for the vehicle which left a balance of R962 068 inclusive of finance charges, payable in 72 equal monthly instalments of R13 362.06 the first of which was payable on 1 February 2018. Ownership of the vehicle remained vested in the respondent and would only be transferred to the applicant when all amounts had been received . The credit agreement is an agreement that falls within the National Credit Act 34 of 2005.

[3] Summons was issued on 17 April 2019 for orders arising from alleged breach of

the credit agreement. At the time, the respondent pleaded that the applicant had defaulted in payments and was in arrears in the amount of R27 568.47 with the total balance outstanding being R973 140.80. It appears from the summons that during October 2018, the respondent had applied for debt review in terms of section 86(10) of the National Credit Act and following a failure of that process, and on 12 February 2019 , the plaintiff had given notice to the defendant to terminate the debt review. Documents relevant to the respondent 's compliance with the National Credit Act are attached to the summons.

[4] The summons was served on 24 April 2019. According to the return of service, it was served in accordance with Rule 4(1)(a)(ii) at the applicant 's place of residence being [….]. It was served on Ms Deuwe Maphanga who is described by the Sheriff as an employee apparently not less than 16 years of age and apparently in charge of the premises at the time of delivery after the original document was displayed and the nature and contents thereof were explained to her. No notice of intention to defend was filed and default judgment was obtained.

[5] The order granted on 28 May 2019 by default was in accordance with the relief sought in the summons . The orders confirmed the cancellation of the credit agreement and directed the applicant to return the vehicle to the respondent. The order provided further that judgment for the amount of damage the plaintiff may have suffered, with interest, is postponed sine die pending the return of the vehicle, its sale and the calculation of the amount to which the respondent is entitled. Costs in an amount of R200 plus sheriffs fees was granted.

[6]. The rescission application was instituted on 12 June 2019. It was initially not supported by any affidavit and on 14 June 2019 , the respondent filed a notice in terms of Rule 30 calling on the applicant to remedy the irregularity. On 4 July 2019, an affidavit was filed supporting the application . On 10 July 2019, the respondent filed a notice of intention to oppose the application and on 20 August 2019, filed an answering affidavit. There is no replying affidavit from the applicant. However, on 17 October 2019, an affidavit headed supplementary affidavit and heads of argument was filed, raising a question of jurisdiction based on the decision of this Court in Nedbank Ltd v Thobeja ne and related matters [2018] ZAGPPHC 692 (26 September 2018) ('Thobejane'). The respondent responded thereto on affidavit on 7 November 2019. The respondent filed heads of argument on 31 January 2020 and set the matter down for hearing.

[7]

The matter came before me on the opposed roll on Monday 2 March 2020 . The ·applicant appeared in person and the respondent was represented by Mr Muller.

[8] At the commencement of the hearing, the applicant requested a postponement of the matter for purposes of obtaining legal representation and as he wished to make new allegations to support his case. Although no formal application was brought for a postponement I heard argument in view of the importance of the applicant's right to legal representation . In this regard , the applicant had not been formally represented in the rescission application . He had received some legal assistance in the process of drafting papers but it was indirect. In this regard , his notice of application and founding affidavit allude to the fact that an affidavit will be forthcoming with the assistance of any attorney. The supplementary affidavit, when filed, dealt with jurisdiction and referred to explanations 'proffered by' certain practitioners. While thus clearly not without some guidance from lawyers and himself familiar with some legal discourse, the applicant was formally unrepresented . However, in response to a request about the steps taken to procure further legal representation , he indicated that he had approached

legal aid, but this had only happened some three weeks previously and was without success. During the course the hearing the

applicant on the postponement and specifically on the new allegations he wished to make, the applicant withdrew the request for a postponement and the matter proceeded on the merits.[1] After hearing initial argument and before the applicant completed his submissions, I stood the matter down until the afternoon session to allow the applicant to consider further what submissions he wished to make. In view of the fact that the applicant was unrepresented, and to advance fairness, I permitted the applicant time and leeway to ventilate his submissions during the course of both the morning and the afternoon as he saw fit and intervened at various points to ascertain whether the applicant was understanding the proceedings and the issues arising. I was assisted in this regard by the manner in which the respondent's counsel conducted himself in representing the respondent. More particularly, he adopted a co-operative and non-technical approach, with a view to ventilating and addressing the substance of the true issues between the parties.

[9] The following issues arise for determination:

9.1. Did the Court have jurisdiction?

9.2. Has the applicant made out a case for rescission?

Jurisdiction

[10] The preliminary issue raised by the applicant is that of jurisdiction. Relying on the Thobejane decision, Mr Mogodiri submitted that action should have been instituted at the outset in the Magistrates Court as the arrears amount at the time of summons was so low. The submission was advanced inter alia on the grounds of access to justice and more specifically its cost. The arrears amount is dealt with below and, while the specific amount is a matter of some contention, it is indeed relatively low. However, as Mr Muller submitted, Mr Mogodiri's submission loses sight of the fact that under the credit agreement, the default resulted in the full outstanding contract balance becoming due, and this amount, at the date of summons was some R973 140.80, which is well outside the jurisdiction of the Magistrates Court and squarely within the jurisdiction of this Court .

[11] Accordingly, I turn to the merits of the rescission application.

Rescission of judgment by default

[12] The rescission application is expressly brought in terms of Rule 31(2)(b),

Rule 42(1)(a) or the common law each of which make provision for rescission of judgment obtained by default. While in this case each of these bases were pleaded, it is worth bearing in mind that the fact that an application is specifically brought in terms of one Rule does not mean it cannot be entertained in terms of another Rule or under common law provided the requirements thereof are met.[2]

Rule 42(1)(a)

[13] Rule 42 is entitled 'Variation and rescission of orders'. Rule 42(1) provides as follows:

(1) The court may, in addition to any other powers it may have, mero motu or upon the application of any party affected, rescind or vary :

(a) An order or judgment erroneously sought or erroneously granted in the

absence of any party affected thereby ;

(b) An order or judgment in which there is an ambiguity, or a patent error

or omission, but only to the extent of such ambiguity, error or omission ;

(c) An order or judgment granted as the result of a mistake common to the parties.

(2) Any party desiring any relief under this rule shall make application therefor upon notice to all parties whose interests may be affected by any variation sought.

(3) The court shall not make any order rescinding or varying any order or judgment unless satisfied that all parties whose interests may be affected have notice of the order proposed.

[14] The applicant relies on Rule 42(1)(a), in terms of which the prerequisites for granting rescission are that the judgment must have been erroneously sought or granted, the judgment must have been granted in the absence of the applicant and the applicant's rights or interests must be affected.[3] Once those requirements are shown, an applicant is ordinarily entitled to rescission and is not required also to show good or sufficient cause as is required for rescission in terms of Rule 31(2)(b) or under the common law.[4]

[15] The Supreme Court of Appeal has recently confirmed that the question whether an order is 'erroneously granted' 'relates to the procedure followed to obtain the judgment in the absence of another party and not the existence of a defence to the claim.'[5] In Lodhi 2 Properties Investments CC v Bondev Developments 2007(6) SA 87 (SCA) at paragraph 24, the Supreme Court of Appeal held: 'Where notice of proceedings to a party is required and judgment is granted against such party in his absence without notice of the proceedings having been given to him such judgment is granted erroneously. That is so not only if the absence of proper notice appears from the record of the proceedings as it exists when judgment is granted but also if, contrary to what appears from such record, proper notice of the proceedings has in fact not been given. That would be the case if the Sheriff's return of service wrongly indicates that the relevant document has been served as required by the Rules whereas there has for some or other reason not been service of the document. In such a case, the party in whose favour the judgment is given is not entitled to judgment because of an error in the proceedings.·

Rule 31 and the common law

[16]

Rule 31 is entitled 'Judgment on confession and by default and rescission of judgments'. Rule 31(2)(a) provides for default judgment and Rule 31(2)(b) provides the protection of rescission in the following terms: 'A defendant may within 20 days after acquiring 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 on such terms as it deems fit.'

[17] Under the common law, a Court is empowered to rescind a judgment obtained on default of appearance provided sufficient cause is shown.[6] The requirement for good cause under Rule 31(2)(b) and for sufficient cause under the common law is the same. In Chetty, Miller JA held:

'The term "sufficient cause" (or "good cause") defies precise or comprehensive definition, for many and various factors require to be considered. (See Cairns' Executors v Gaarn 1912 AD 181 at 186 per Innes JA.). But it is clear that in principle and in the long-standing practice of our Courts two essential elements of "sufficient case" for rescission of a judgment by default are:

(i) That the party seeking relief must present a reasonable and acceptable explanation for his default; and

(ii) That on the merits such party has a bona fide defence which, prima facie, carries some prospects of success. (De Wet's case supra at 1042 ; PE Bosman Transport Works Committee and others v Piet Bosman Transport (Pty) Ltd 1980(4) SA 794 (A); Smith NO v Brummer NO and another; smith NO v Brummer 1954(3) SA 352 (0) at 357-8) .

It is not sufficient if only one of these two requirements is met; .for obvious reasons a party showing no prospect of success on the merits will fail in an application for

rescission of a default judgment against him, no matter how reasonable and convincing the explanation of his default. And ordered judicial process would be negated if, on the other hand, a party who- could offer no explanation of his default other than his disdain of the rules was nevertheless permitted to have a judgment against him rescinded on the ground that he had reasonable prospects of success on the merits.'

[18] The onus rests on an applicant for rescission to show good cause.[7] The Court has a wide discretion when determining whether good cause exists which must be exercised after a proper consideration of all the relevant circumstances.[8] The defence must be a substantial defence and there must be a bona fide presently held desire to raise the defence in the event of the judgment being rescinded.[9]

Was the order erroneously sought or granted?

[19] In the founding affidavit , the allegation is made that the applicant was not aware of the action brought against him and did not receive the summons. The allegation is made in very general terms and without any elaboration. In the answering affidavit, the details of service, which are in accordance with Rule 4, were pertinently set out. On the information before me, the address for service was the chosen domicilium citandi et executandi. No replying affidavit was filed nor were these issues addressed in the document styled supplementary affidavit and heads of argument. Mr Mogodiri emphasised his complaint about not receiving the summons during the hearing of the rescission application.

[20] When I enquired what the basis for saying this was, Mr Mogodiri confirmed that the address at which service was effected was and remains his address. However, he then informed the Court, albeit not under oath, that he did not have any employee by the name of Ms Deuwe Maphanga, and did not know her, and submitted that the law requires that the person who receives it be the affected person or his or her agent.

[21] Mr Mogodiri's submission that the law requires service on a person or his agent is not correct. The sheriff effected service in terms of Rule 4(1)(a)(ii) which permits the sheriff to leave a copy of the process at the place of residence with the person apparently in charge of the premises at the time of delivery, being a person apparently not less than sixteen years of age. On the information in the default application, the court was entitled to accept that proper service had been given.

[22] The question I must consider is whether what Mr Mogodiri informed me from the bar about Mrs Maphanga changes matters. In my view it does not. First, this is not a finding that I can make on the papers before me in circumstances where no replying affidavits were filed in response to the answering affidavit, which dealt pertinently with service. Second , in my view, even if I were to accept that Mr Mogodiri may not have known or employed any Ms Maphanga, it does not follow that there was no procedurally effective service of process under the relevant sub-rule. More specifically, on all the information before me, I am unable to conclude that the sheriff did not leave a copy at the place of residence with the person apparently in charge at the time of delivery as the rule requires .

[23] On all the information before me, I am accordingly unable to conclude that the order was erroneously granted in the sense contemplated by Rule 42(1)(a)(ii). Rather, the default falls to be exonerated in terms of the rescission procedures contemplated by Rule 31(2)(b) or the common law.

[24] I accordingly turn to consider whether the applicant has made out a case for rescission under either Rule 31(2)(b) or the common law. I deal first with the requirement that an applicant present a reasonable and acceptable explanation for his default and thereafter with the requirement of a bona fide defence that carries some prospect of success.

Explanation for default

[25] As indicated above, the applicant averred that he did not receive the summons and was not aware of it. However, there is no explanation given on affidavit as to what transpired, either in the founding affidavit or in any subsequent affidavit. This, despite the answering affidavit setting out how service was effected and despite the fact that a subsequent affidavit was filed with at least guidance from an attorney. Furthermore, it is clear from a document attached to Mr

Mogodiri's founding affidavit that he was in a position to make enquiries about any court process as he was engaging in that regard

by sms with 'Wesbank Lawyer'. The explanation for default is thus at best scant. However, for purposes of considering whether good cause has been shown I am willing to assume, without deciding, that Mr Mogodiri has a reasonable explanation for his default. I do so, as I have concluded that there is no defence raised to the claim with any prospect of succeeding .

The defences raised

[26] On a consideration of the affidavits in support of the application , Mr Mogodiri, in substance, raised two defences. First, he submitted that the arrear amount

on which he was sued, being R27 568.47 was incorrect and was in fact only R17 568.47 as on .8 April 2019 he had paid an amount of R10 000 to settle part of the arrears. Second, he submitted that in view of the fact that he had made this payment, the respondent was under a duty to send him a fresh letter of demand and notice of default.

[27] In my view , these defences cannot succeed.

27.1. In respect of the first defence, the relief sought was for the return of the vehicle in circumstances where the applicant was in arrears. Judgment on the precise amount outstanding at the relevant date was reserved . The specific arrears amount, in the nature of things would be a moving target in case of this sort. The arrears amount sued for was, furthermore, materially correct. Indeed, it was slightly lower than the amount owed. In this regard , despite the fact that the applicant had, on 8 April 2019 , paid an amount of R10 000, this did not have the effect of settling the arrears, only reducing them. On the information before me, by the time that summons was issued, the actual arrears stood in excess of the amount claimed as there had been default of payment of a further instalment.

27.2.

In respect of the second defence , the argument might have some. merit if the arrears amount had been settled in full on 8 April 2019. However, it was not. Not long before serving summons , the respondent had sent a final letter of demand when terminating the debt review procedure under the National Credit Act.[10] Those arrears were not settled. On the information before me, the respondent complied with its obligations in sending the notices by registered post.

Covid-19 lockdown

[28] This judgment is being delivered during the period of lockdown following the declaration (on 15 March 2020) of the Covid-19 outbreak as a national disaster. In terms of the Regulations issued in terms of section 27(2) of the Disaster Management Act 57 of 2002 as amended ('the main regulations'),[11] the lockdown is in place between Thursday 26 March 2020 until Thursday 16 April 2020. Furthermore, various regulations have been

made in respect of the lockdown.

[29] The court has not heard argument in respect of the implications of the regulations for the implementation or execution of the order of 28 May 2019. The parties are encouraged to engage and if necessary to obtain advice regarding the implications of the regulations, for the ongoing resolution of the dispute between them and when the order of 28 May 2019 may lawfully be executed. If need be the parties should approach a court for declaratory relief .

[30] The parties' attention is drawn to the fact that a central feature of the main regulations is that for the period of lockdown every person is confined to his or her place of residence, unless strictly for the purpose of performing an essential service, obtaining an essential good or service, collecting a social grant, or seeking emergency, life-saving or chronic medical attention.[12]

[31] The parties' attention is, furthermore, drawn to the provisions of Regulation 5(e) of the Regulations issued by the Minister of Justice on 26 March 2020, as amended on 30 March 2020[13] which provide in respect of civil cases:

'(c). Service of process and execution of writs by sheriffs shall be limited to cases which are urgent and essential, including :

(i) Service and execution of Court orders relating to COVID -19;

(ii) Service of domestic violence protection orders;

(iii) Service of protection from harassment orders;

(iv) Service of process relating to claims prescribing ;

(v) Service of urgent court process relating to court hearings scheduled during lockdown ;

(vi) Service of urgent court process in family law matters as determined in these directions; and

(d) Service and execution of other process by Sheriffs , including evictions are not essential , and are suspended for the duration of the lockdown .'

[32] The following order is granted:

32.1. The application is dismissed with costs.

SJ COWEN

ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

DATE OF HEARING: 2 MARCH 2020

DATE OF JUDGMENT: 7 APRIL 2020

APPEARANCES

Applicant: In person

Respondent: EF Muller instructed by De Jager Kruger van Blerk

[1] I note with some concern that the withdrawal came after the applicant informed the Court that he had recently

paid the respondent R45 000 and could show the proof of payment, but when asked when the payment was made was unable to provide any information to substantiate what had been said.

[2] De Wet v Western Bank Ltd 1977(4) SA 770 (T) at 780H-781A; Mutebwa v Mutebwa 2001(2) SA 193 (TkHC) at paras 11 and 12 (' Mutebwa' ).

[3] Mutebwa , supra n1 at para 15.

[4] Hardroad (Pty) Ltd v Oribi Motors (Pty) Ltd 1977(2) SA 576(W) at 578G.

[5] Freedom Stationery (Pty) Ltd and others v Hassam and others 2019 (4) SA 459 (SCA).

[6] Chetty v Law Society, Transvaal 1985(2) 756 (A) at 764J ('Chetty' ).

[7] De Wet v Western Bank Ltd 1979(2) SA 1031 (A) at 1042H.

[8] Id. See too Cairns' Executors v Gaarn 1912 AD 181 at 186.

[9] Silber v Ozen Wholesalers (Pty) Ltd 1954(2) SA 345 (A) at 352; Gal v Tansley NO 1966(4) SA 555 (C) at 560; Kritzinger v Nothem Natal Implement Company (Pty) Ltd 1973(4) SA 542(N) at 546.

[10] The letters are incorrectly dated but the post office stamps show the correct dates and the arrears amount reflected correlate with the statement as at the correct dates .

[11] Regulation No 318 of 18 March 2020 (GG No 43107) as amended by Regulation No 398 of 25 March 2020 (GG 43148)

[12] Regulation 118(1)(a)(i).

[13] Regulation No 440 of 31 March 2020 (GG 43191).