Linde v First Rand Bank Limited (3394/2020) [2021] ZAFSHC 316 (2 December 2021)

IN

THE HIGH COURT OF SOUTH AFRICA

FREE STATE DIVISION, BLOEMFONTEIN

Case no. 3394/2020

In the matter between:

JOHANNES ALWYN LINDE

APPLICANT

and

FIRSTRAND BANK LIMITED

RESPONDENT

In re:

FIRST RAND BANK LIMITED

PLAINTIFF

JOHANNES ALWYN LINDE

DEFENDANT

t/a LINDE BOERDERY

CORAM: DE KOCK, AJ

HEARD ON: 25 NOVEMBER 2021

JUDGMENT BY: DE KOCK, AJ

DELIVERED: 2 DECEMBER 2021

[1] It is common cause that Judgment was granted against the Applicant on the 15 October 2020 (“the Judgement”). The Applicant now applies for rescission of the Judgment granted as well as condonation for the late filing of the application for rescission of judgment together with ancillary relief.

[2] The Applicant raised two points in limine: The Court is of the view that the points in limine are equally applicable to both the application for condonation as well as the application for rescission of the Judgment. The Court will firstly deal with the points in limine.

FIRST POINT IN LIMINE: AUTHORITY TO ACT ON BEHALF OF THE RESPONDENT:

[3] It is averred that the deponent for the Respondent, Maryna Jooste has failed to attach any form of resolution confirming her authority to in fact depose to the affidavit on behalf of the Respondent. It is averred that the deponent has not been mandated by resolution of the Respondent, which is a company, to depose to the affidavit. It is evenly stated that the deponent is not a director.

[4] The Court deems it fit to refer to the matter of Ganes and Another v Telkom Namibia Ltd 2004 (3) SA 615 (SCA) at para [19] the following is stated:

“There is no merit in the contention that Oosthuizen AJ erred in finding that the proceedings were duly authorised. In the founding affidavit filed on behalf of the Respondent Hancke said that he was duly authorised to depose to the affidavit. In his answering affidavit the First Appellant stated that he had no knowledge as to whether Hancke was duly authorised to depose to the founding affidavit on behalf of the Respondent, that he did not admit that Hancke was so authorised and that he put the Respondent to the proof thereof. In my view it is irrelevant whether Hancke had been authorised to depose to the affidavit. The deponent to an affidavit in motion proceedings need not be authorised by the party concerned to depose to the affidavit. It is the institution of the proceedings and the prosecution thereof which must be authorised. In the present case the proceedings were instituted and prosecuted by a firm of attorneys purporting to act on behalf of the Respondent. In an affidavit filed together with the Notice of Motion a Mr Kurz stated that he was a director in the firm of attorneys acting on behalf of the Respondent and that such firm of attorneys was duly appointed to represent the Respondent. The statement has not been challenged by the Appellants. It must therefore be accepted that the institution of proceedings was duly authorised. In any event Rule 7 provides that the procedure to be followed by Respondent who wishes to challenge the authority of an attorney who instituted motion proceedings on behalf of an Applicant. Appellants did not avail them of the procedure so provided (See: Eskom v Soweto City Council 1992 (2) SA 703 (W) at 705 C – J). (My emphasis).

[5] With due regard to the aforesaid case law, this Court is of the view that the attorney acting for the Respondent needs to be authorised. The deponent as witness to the affidavit need not be additionally authorised. The authority of the Respondent’s attorney has not been challenged in these proceedings.

[6] The first point in limine is therefore dismissed.

SECOND POINT IN LIMINE:

[7] It is stated that Regulation 2(1) of the regulations governing the administering of an oath or affirmation provides that before a Commissioner of Oaths administers to any person the oath or affirmation prescribed by Regulation 1, he shall ask the deponent:

7.1 Whether he knows and understands the contents of the declaration,

7.2 Whether he has any objections to taking of the prescribed oath; and whether he considers the prescribed oath to be binding on his conscience.

[8] It is further stated that regulation 2(2) of the regulations governing the administering of an oath or affirmation provides that only if the deponent acknowledges that he knows and understands the contents of the declaration and informs the Commissioner of Oaths that he does not have any objection to taking the oath and that he considers it to be binding on his conscience the Commissioner of Oaths shall administer the oath prescribed by Regulation 1(1).

[9] It is averred that the deponent did not declare in oath certificate that she has no objection to the prescribed oath and considers same binding on her conscience as prescribed by the regulation. It is further stated that the document authored by the deponent is therefore not an affidavit and therefore hearsay and inadmissible evidence.

9.1 The Court deems it fit to refer to the attestation clause contained in the answering affidavit. The attestation clause reads as follows:

“The deponent acknowledged that she knows and understands the content of this affidavit which was signed and sworn before me at Pretoria on this 23rd day of September 2021, the regulations contained in the Government Gazette no. 1258 of 21 July 1972 as amended and Government Gazette notice no. R1648 of 19 August 1977 as amended having been complied with.” (My emphasis)

[10] This Court finds that the point in limine stands to be dismissed because it is explicitly stated that the regulations contained in the Government Gazettes have been complied with which includes Regulations 1, 2(1), 2(2) and 3(1). This Court finds that there has been substantial compliance with the relevant regulations. Therefore, the second point in limine is dismissed.

APPLICATION FOR CONDONATION AND APPLICATION FOR RESCISSION OF THE JUDGMENT:

[11] The Court finds it prudent to firstly refer to the applicable legal principles. In the matter of eThekwini Municipality v Ingonyama Trust (CCT80/12)[2013]ZACC7,2013(5)BCLR497(CC),2014(3)SA240(CC)(28 MARCH 2013), the Court said the following:

“As stated earlier two factors assume importance in determining whether condonation should be granted in this case. They are the explanation furnished for the delay and prospects of success. In a proper case these factors may tip the scale against the granting of condonation. In a case where the delay is not a short one, the explanation given must not only be satisfactory but also cover the entire period of the delay.”

[12] In the case of Grant v Plumbers (Pty) Ltd 1949 (2) SA 470 (O) at 476 – 477 it is stated that:

“(a) He must give a reasonable explanation of his default. If it appears that his default was wilful or that it was due to gross negligence, the Court should not come to his defence.

(b) His application must be bona fide and not made with the intention of merely delaying the Plaintiff’s claim.

(c) It must show that he has a bona fide defence to the Plaintiff’s claim. It is sufficient if he makes out a prima facie defence in the sense of setting out averments, which if established at trial, would entitle him to the relief asked for. He need not deal fully with the merits of the case and produce evidence that the probabilities are actually in his favour.”

[13] In De Wet and Others v Western Bank Ltd 1979 (2) SA 1031 AD, Trengove AJA clarified that it is not sufficient if only one of the elements required is established, the Applicant must establish that she has a bona fide defence to the claim which prima facie carries some prospect of success.

DISCUSSION:

[14] The Applicant’s indebtedness towards the Respondent arose from the provisions of a loan agreement and an overdraft facility.

[15] The Applicant defaulted on the agreements by failing to make payment of the monthly instalments due in terms of the loan agreement and fell into arrears and in respect of the overdraft facility the Applicant exceeded the facility limit. The latter default is clearly evidenced by the account statements annexed to the main application in terms of which the Judgement was granted.

[16] The application was served upon the Applicant at his chosen domicilium citandi et executandi. The latter is apparent from the Sheriff’s return of service. It appears from the return of service that the Respondent’s application was served at 18 Duke Street, Brandfort. This address clearly accords with the provisions of Clause 10.4.2 of the loan agreement and Clause 17.1.2 of the facility agreement which in essence determines that the Respondent chose as his address for service of documents the address indicated in the agreements. In both the loan agreement and the overdraft facility agreement the address of 18 Duke Street, Brandfort is indicated as the Respondent’s domicilium citandi et executandi. On the Applicant’s own version his domicilium address was never changed. In terms of the loan agreement and the facility agreement a party may notify the other party in writing of change of address which notice shall be effective on the tenth (10) business day after receipt of the notice. The loan agreement and facility agreement states that the Applicant may notify the Respondent in writing of his chosen domicilium address. Thus, if the Applicant changed his domicilium address he had to notify the Respondent in writing of such change in address which he never did. The Applicant does not allege that he changed his domicilium address nor does he attach written proof that

he changed it. The crux of the matter is that the Applicant did not notify the Respondent in writing of the change of his domicilium. If another account with the Respondent reflects another or his current residential address, same does not amount to a written notification of change of domicilium in terms of the provisions of the loan agreement as well as the provisions of the facility agreement. This Court finds that the application was properly served at the correct domicilium address. The application was evenly provided to the Applicant via electronic mail. Furthermore, the Applicant was informed that the application is enrolled for the 15th of October 2020 and that the Respondent is proceeding with the application and that the Applicant must deliver a Notice of opposition. Most importantly the Applicant did receive these e-mails as he responded thereto. The Court is of the view that the Applicant was fully aware of the application, and it is evenly clear that the Applicant’s allegation that he would have opposed if he knew about the application is not correct.

[17] The Court is of the view and that the Applicant knew and did nothing. The latter makes it clear that the Applicant was in wilful default as he had full knowledge of the application, the hearing date and that the Respondent intends proceeding.

[18] The Applicant should have been aware of the judgment on the 15th of October 2020 for the reasons already stated in this judgment. The Respondent caused a warrant of execution to be served on the Applicant on 13 November 2020. The Applicant wrote to the Respondent’s attorneys on 18 November 2020 and expressly admits service of the warrant of execution and requested that documentation be mailed to him. The Respondent therefor should evenly then been aware of the Judgement. At worst the Respondent was aware of the Judgement on 6 January 2021, when the Respondents attorney of record sent an email to the Applicant informing the Applicant that Judgement was granted on 15 October 2020 and that the sheriff attempted to serve a warrant execution at 18 Duke Street, Brandfort. The Applicant responded to the latter email.

[19] The essence of the matter is that the Applicant in responding to the e-mails was most definitely aware of the existence of the judgment. The Applicant’s allegation that he obtained knowledge of the judgment only on the 23rd of April 2021 does not accord with his own actions as is evident from the e-mails before this Court. The Applicant evenly failed to provide a reasonable explanation for waiting endless months before deciding to launch the application for rescission. The application for condonation and rescission for judgment was only served on the Respondent’s attorneys on the 1st day of September 2021.

[20] In regard to the requirement of a bona fide defence it appears that only two defences are raised by the Applicant being that he allegedly settled the arrears on the accounts and the alleged non-compliance with Section 129 of the National Credit Act 34 of 2005 (“the National Credit Act”).

[21] In the Court’s view the Respondent duly complied with Section 129 of the National Credit Act as the Applicant actually received the Notice in terms of Section 129. On the 1st of July 2020 and as the loan agreement was still in arrears and the limit on the facility still being exceeded the Respondent’s attorney of record provided a Notice in terms of Section 129 of the National Credit Act to the Applicant via electronic mail. The stated e-mail together with a copy of the stated notice is attached to the main application. The stated e-mail together with the Section 129 notice was indeed and actually received by the Applicant because the Applicant replied to the e-mail of the 1st July 2020. In the Applicant’s replying affidavit the Applicant admits that the Section 129 Notice was sent by email. It is therefore abundantly clear and without any doubt that the Applicant actually received the Section 129 notice.

[22] Both the loan agreement and the credit facility agreement determined that notwithstanding anything to the contrary contained and implied in the agreements, a written notice or communication actually received by one of the parties from the other party including by way of facsimile transmission shall be adequate written notice or communication to such party. In this regard the Court refers to Clause 17.4 of the facility agreement and Clause 10.6 of the loan agreement which determines as follows:

“Notwithstanding anything to the contrary contained or implied in this agreement, a written notice or communication actually received by one of the parties or the other including by way of facsimile transmission shall be adequate written notice or communication to such party.” (Own emphasis)

[23] The Court therefore finds that whether the Notice in terms of Section 129 was dispatched via pre-paid registered mail and whether the notice reached the correct post office is therefore irrelevant, as the Applicant actually received the notice which constitutes adequate written notice.

[24] The Applicant further contends that the Respondent launched its application before ten (10) days had lapsed since the Section 129 notice was sent to the Applicant. The facts of this matter however demonstrate indisputably that the Section 129 notice was received by the Applicant on the 1st July 2020. It is stated in the following affidavit that:

“On the 1st July 2020, I received a letter from Rorich, Wolmarans Luderitz Incorporated advising that in terms of Section 129(1)(a), that I will have ten (10) business days from the date of the letter rectifying the alleged breach.”

[25] The application for judgment was issued on the 10th of September 2020. There is thus no basis to contend that the requisite period of ten (10) days did not lapse.

25.1 The Applicant further contends that the Section 129 notice is defective for various reasons. There is no merit to any of the attacks levied against the form of the Section 129 notice. A notice compliant with the National Credit Act was sent to the Applicant.

25.2 The Applicant evenly claims that he was not in default for a period of twenty (20) days. The account statement before Court most certainly disproves this allegation.

[26] It is clear from the papers before Court that the arrears on the loan agreement was never fully settled by the Applicant nor did the Applicant pay the full outstanding balance due in terms of the facility agreement as is confirmed with the account statements before Court. On the 1st of July 2020 the Applicant addressed an e-mail in which e-mail the Applicant confirms his request for extension on his payment as the Applicant is awaiting one of his debtors to make payment to him. This e-mail can only be construed as an admission of default and indebtedness. On the 14th of July 2020 the Applicant sent an e-mail to the Respondent’s attorneys informing them that the arrears on the loan agreement have already been paid. Evenly on the 14th of July 2020 the Respondent’s attorneys replied with an e-mail to the Applicant informing the Applicant that the overdraft facility has been called up and cannot be reinstated as the full outstanding amount of the overdraft facility is due and payable. The full outstanding balance on the overdraft facility was then provided to the Applicant as at 7 July 2020 in the amount of R899,834.03. The full outstanding balance of the overdraft facility is repayable on demand and same does not have monthly arrears such as the loan agreement. The facility agreement is not capable of reinstatement by paying arrears as in the case with a loan agreement. The Applicant was furthermore informed of the current arrear amount on the loan agreement, which was R63,412.05. On the 7 July 2020 the Applicant paid an amount of R30,000.00 towards the facility and on 24 July 2020 the Applicant paid R8000-00 towards the facility. On 14 July 2020 the Applicant paid R50,962.02 towards the loan agreement.

[27] The full outstanding balance of the facility agreement however had to be paid. The arrears on the loan agreement were R63,412.56 on 14 July 2020 and after deducting the payment of R50,962.02 the account remained in arrears. The Applicant’s payment of R50,926.02 thus never settled the arrears. The Applicant used the arrears on the statement of 13 June 2020 to make payment a month later on 14 July 2020, when the Applicant should have known that the arrears have increased with another month’s instalment by 14 July 2020. The Applicant’s payment on 14 July 2020 of R50 926.02 never settled the arrears as by then it was R63 412.56 It is clear that the loan agreement after the payment of R50,926.02 showed arrears of R12,339.40. It is evident from the provisions of the loan agreement that an event of default occurs where the Applicant fails on due date to pay an amount in terms of any borrowing which the Applicant has with the Respondent. The Applicant remained in breach of the facility agreement and remained in default of the loan agreement. The Respondent’s attorneys sent an e-mail to the Applicant informing the Applicant that the facility agreement has been called up and the full outstanding balance is due and payable and that the Respondent is proceeding with the application on 15 October 2020.

[28] The Court therefore finds that the Respondent duly complied with the Section 129 and 130 of the National Credit Act and that the arrears were never settled. The main application was not premature and reinstatement in terms of Section 129(3) and (4) of the National Credit Act was not possible. This Court is of the view that the Applicant failed to satisfy the requirements to succeed with both the application for condonation and application for rescission of judgment. In particular the Applicant failed to set forth any valid defences. Evenly the Judgement was most definitely not erroneously sought or granted.

ORDER:

[29] The Court therefore makes the following order:

1. The Applicant’s application for condonation and rescission of the Judgment of 15 October 2021 is dismissed with costs.

DE KOCK, AJ

For the Applicant:

Adv I Sander

Instructed by Kramer Weihmann Incorporated

c/o McIntyre & van der Post Attorneys

Bloemfontein

For the Respondent: Adv M C Louw

Instructed by: Symington & De Kok Attorneys