Ngutshane v Standard Bank of South Africa Ltd and Others (31843A/2012) [2013] ZAGPPHC 421 (6 December 2013)

IN THE HIGH COURT OF SOUTH AFRICA

(NORTH GAUTENG HIGH COURT)

CASE NO: 31843A/2012

DATE: 6 NOVEMBER 2013

In the matter between:

MPHO LEROY NGUTSHANE Applicant

And

THE STANDARD BANK OF First Respondent

SOUTH AFRICA LTD

SHERIFF OF THE HIGH Second Respondent

COURT, ALBERTON

THABO LUPONDO Third Respondent

JUDGMENT

SWARTZ AJ

This is an application for rescission of judgment handed down by default by this court on 22 May 2012.

The applicant is the consumer under a consumer credit agreement, being a home loan agreement secured by a mortgage bond in favour of First Respondent, being Standard Bank.

It is common cause that the Applicant fell in arrears in the payment of instalments of the home loan.

The First Respondent instituted action against the Applicant, and obtained a default judgement against the Applicant for the repayment

of the entire loan amount and declaring the immovable properties of the Applicant specifically executable, and had a writ issued in such respect.

The First Respondent, through the Second Respondent being the Sheriff, thereafter sold one of the immovable properties at a sale in execution to the Third Respondent.

The Applicant avers that he only became aware of the sale of his property when the Third Respondent arrived at his primary residence, on 26 November 2012 and said that he had bought the property at a sale in execution.

Transfer of the immovable property to the Third Respondent has been stayed pending the finalisation of the rescission application by the Applicant.

The Applicant seeks an order that the default judgment granted for payment of an amount of R408 457. 67 together with interest; an order declaring the immovable property situated at Erven 2655 and 2656 Spruitview Township, Gauteng, specifically executable, be rescinded and set aside; that the writ of attachment that was issued pursuant to the judgment be set aside; that the sale in execution of the property be set aside; condoning the late filing of the application for rescission of judgment and that the costs of this application be paid by the Respondent who opposes the application.

On behalf of the Applicant it was submitted that the application for rescission is not brought before this court in terms of Rule 31 (2)(b) of the Uniform Rules of Court, that prescribes a time limit within which the application must be brought, but in terms of Rule 42(1) and the Common Law.

The First Respondent opposes the application and submitted that there exists no basis to rescind the judgment. Furthermore, despite the reliance of the applicant’s counsel in his argument before this court on Rule 42 (1) of the Rules of Court and the Common Law, the papers do not make out any case for relief under the provisions of Rule 42 (1) or the common law. Reliance on Rule 42 (1) and the common law was an afterthought because of the Applicant’s difficulties in explaining the delay in bringing the application for rescission, some 3 months after he had become aware of the judgment having been granted by default against him. There is no reasonable explanation for the delay. After the receipt of the Writ by the Applicant, a period of five and a half months passed whilst the Applicant did not pursue the rescission of judgment and/or proceeded to set aside the warrant therein. The Applicant received the Writ in May 2012 and only took steps in late November 2012. The Applicant does not propose any explanation for this delay and merely highlights that he was “a lay person”. The judgment was granted on 22 May 2012. The Applicant, on his version, became aware of the judgment in September 2012. The application was only launched some three months later on 12 December 2012. The Applicant failed to address any aspects in support of condonation of what transpired since September 2012 until the launch of the application.

Insofar the Applicant has launched the application on common law grounds, the Applicant is to show sufficient cause to rescind the judgment, which include the following:

There must be a reasonable explanation of the default;

The Applicant must show that the application was made bona fide;

The Applicant must show that he has a bona fide defence, which

prima facie has some prospects of success.

In the event that the application was launched in terms of Uniform Rule 31 (2)(b) the following were to be alleged and proved by the Applicant:-

An absence of wilfulness;

That the Applicant has a reasonable explanation for the default.

That the application is bona fide and not made with the intention to

delay the plaintiffs claim.

The Applicant must show that he has a bona fide defence.

Rule 31 (2)(b) provides that any party dissatisfied with a judgment granted may within 20 days after he had acquired knowledge of such judgment, set the matter down for reconsideration by the court.

Rule 42 (1) provides that the court may upon application rescind a judgment erroneously sought or granted in the absence of a party

affected thereby; or a judgment in terms of which there was ambiguity, error or omission or a judgment granted as a result of a

mistake common to the parties.

There is a presumption that a judgment granted is correct. The purpose of this rule is to correct expeditiously an obviously wrong judgment or order.

Bakoven Ltd v G J. Howes (Pty) Ltd, 1992 (2) SA 466: at 471 E-I:

Rule 42 (I) (a), it seems to me, is a procedural step designed to correct expeditiously an obviously wrong judgment or order. An order or judgment is ‘erroneously granted’ when the Court commits an ‘error’ in the sense of a ‘mistake in a matter of law appearing on the proceedings of a Court of record \ It follows that a Court in deciding whether a. judgment was ‘erroneously granted ’ is, like a Court of appeal, confined to the record ofproceedings. In contradistinction to relief in terms of Ride 31(2) (b) or under the common law, the applicant need not show ‘good cause7 in the sense of an explanation for his default and a bona fide defence. Once the applicant can point, to an error in the proceedings, he is without further ado entitled to rescission. It is only when he cannot rely on an ‘error ’ that he has to fall back on Rule 31 (2) (b) or on the common law. In both latter instances he must show 'good cause”

Promedia Drukkers & Uitgewers (Edms) Bpk v Kaimowitz & Others, 1996 (4) SA 411 at 417 G to 418 B:

Relief will be granted under this Rule (Rule 42 (1)) if there is an irregularity in the proceedings; if the Court lacked legal competence to have made the order; and if the Court, at the time the order was made, was unaware offacts which, if known to it, would have precluded the granting of the order. It is not necessary for the applicant to show *good cause ’ for the Ride to apply.

In terms of the common law, a Court has a discretion to grant rescission of judgment where sufficient or good cause has been shown. But it is clear that in principle and in the long-standing practice of our Courts two essential elements of ‘sufficient cause ’ for rescission of a judgment by default are:

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

That on the merits such party has a bona fide defence which, prima facie, carries some prospect of success.

Should the judgment previously granted be rescinded, it follows that the consequences of the judgment fall to be set aside.

Erasmus: Superior Court Practice, at B1 - 307:

At common law a judgment can be set aside on the following grounds - fraud, justus error (on rare occasions), in certain exceptional circumstances when new documents have been discovered, where judgment has been granted by default and, in the absence between the parties of a valid agreement to support the judgment, on the grounds o/justa causa.

It was argued on behalf of the applicant that the application for rescission is brought on the basis that the judgement granted was erroneously sought and obtained. The Applicant is seeking to be afforded the protection and rights statutorily granted to him by the National Credit Act, since the judgement was at the very least erroneously sought and granted, alternatively such statutory rights afford him a bona fide defence.

The applicant avers that the S 129 Notice in terms of the National Credit Act was never delivered to him and he did not come to his notice. Had such notice been received, he would have responded by exercising his rights in terms of the notice.

I was referred to the decision of the Supreme Court of Appeal in Rossouw and Another v FirstRand Bank 2010 (6) SA 439 SA where the Court held that: (a) when registered post is the mode of delivery, despatch of the registered item is all that the credit

provider need prove; and (b) the fact that the letter does not reach the address (of the consumer) is of no consequence in the enquiry as to whether there has been compliance with section 129 of the NCA; where the registered post is properly employed, despatch on its own constitutes compliance with section 129.

On 7 June 2012 the Constitutional Court, by majority, decided in Sebola v Standard Bank 2012 (5) SA 145 (CC) that to satisfy a court that there has been compliance with s 129 (1), the credit provider must go further and establish that the registered item reached the addressee’s post office. At para 87 it is stated:

(W)here the credit provider posts the notice, proof of registered despatch to the address of the consumer, together with proof that the notice reached the appropriate post office for delivery of the consumer, will in the absence of contrary indication constitute sufficient proof of delivery. If in contested proceedings the consumer avers that the notice did not reach him or her, the court must establish the truth of the clam. If it finds that the credit provider has not complied with section 129 (1), it must in terms of section 130 (4) (b) adjourn the matter and set out the steps the credit provider must take before the matter may be resumed ”

Post- Sebola, the Western Cape High Court in Nedbank LTD v Binneman 2012 (5) SA 569 (WCC) concluded that where there was proof that the notice reached the post office, the risk of non-compliance rested with the defaulting consumer.

The effect of Sebola is that it qualified Rossouw to the extent that it added an extra duty on the credit provider to ensure that the s 129 notice sent by registered mail to the address stipulated by the consumer in the credit agreement was delivered to the post office of the intended recipient for collection there.

The Applicant submits that the ‘track and trace’ report generated by the Post Office proves that the registered postage slip was sent to the incorrect postage address, being the one as per the mortgage agreement. but not being the address as contained in the home loan agreement which, according to him, overrides the terms of the mortgage agreement and is as chosen by the Applicant. The First Respondent therefore failed to send the letter to the address as per the contract and as chosen by the Applicant as per statute.

The respondent contains that the defence raised that the Section 129 Notice has not reached the Applicant is an opportunistic attempt to create a defence. The Notice was indeed dispatched to the chosen domicilium address as is evident from the track and trace report attached to the answering affidavit.

I agree with the submissions of respondent's counsel that the Applicant failed to advance any reason for his delay in launching the application for rescission. Apart from the Applicant’s other difficulties in obtaining the relief sought, on this basis alone, the application for rescission of judgment fails. There is no reasonable explanation advanced by the Applicant for his delay in bringing the application for rescission when the judgment taken against him came to his notice.

The explanations advanced by the Applicant in respect of the delay in launching the application cannot merely be negated. Over and above this, despite vigorous argument on behalf of the applicant, there is nothing placed before me to indicate that the judgment granted by default was erroneously sought and erroneously obtained and that the provisions of Rule 42 (1) or the common law comes to the rescue of the Applicant. The Applicant admitted that he has failed to satisfy his repayments in terms of the loan agreement from July 2011 until May 2012. He contends that if advised that legal action would have followed consequent upon his failure to perform in terms of his monthly obligation, he would have taken steps to obtain legal advice and/or enquire about the possible rehabilitation of the arrears.

The Applicant does not dispute the monetary judgment obtained against him. The Respondent was entitled to enforce its bond and default

judgment was correctly applied for and granted. 1 further find that the SI 29 Notice in terms of the National Credit Act was correctly

despatched to the chosen domicilium address as is evident from the track-and-trace receipt attached to the answering affidavit.

The Applicant fails to set out with particularity the basis of why he contends that he was not in wilful default. His version in this regard is particularly vague insofar he alleged merely that he did not receive the summons at all. A spurious attack is launched against the Sheriffs. The Applicant’s contention that should he have received the Section 129 Notice, that would have resulted in him taking action, is not sufficient to establish a bona fide defence with prospects of success in the trial. The Applicant has failed to set out a defence that is sustainable at trial.

In these circumstances, the application for rescission of judgment is dismissed with costs on the attorney and client scale.

E SWARTZ

ACTING JUDGE OF THE HIGH COURT