Speelman and Another v Absa Bank Limited and Others (4120/2016) [2017] ZAECGHC 137 (11 July 2017)

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

IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION, GRAHAMSTOWN

CASE NO. 4120/2016

In the matter between:

NOXOLO FANISWA SPEELMAN

First Applicant

NOXOLO FANISWA SPEELMAN N.O

Second Applicant

and

ABSA BANK LIMITED

First Respondent

MICHAEL JAMES FREEGARD

Second Respondent

MASTER OF THE HIGH COURT, BISHO

Third Respondent

THE SHERIFF KING WILLIAMS TOWN

Fourth Respondent

REGISTRAR OF DEEDS, EASTERN CAPE

Fifth Respondent

JUDGMENT

Bloem J.

[1] The applicants seek an order in the following terms:

“1. That the late launching of these application proceedings be condoned in the interest of justice;

2. That the judgment and Order that was granted in the 1st respondent’s favour by default on 3 March 2016[1] by the Honourable Mr Justice Bloem in an application under the Case Number 3784/13 be and is hereby rescinded;

3. Declaring the sale in execution of the Applicant’s home situated at ERF [...], King Williams town, Buffalo City Local Municipality Division of King Williams Town, Eastern Cape Province on 3 March 2016 to be null and void and be set aside;

4. That the sale in execution of ERF [...] King William’s Town be declared unconstitutional and a violation of the Applicant’s constitutional right to adequate housing;

5. Ordering the 6th Respondent[2] to cancel the Title Deed under number T1457/2016 in respect of ERF [...], King Williams Town, Registration Division Province of the Eastern Cape and to cancel all the rights accorded to the 2nd respondent by virtue of the deed;

6. Ordering the 6th Respondent to register the title deed in the name of the 1st Applicant.

7. Directing the parties who oppose the granting of these orders to pay the costs of this application on an attorney and client scale.

8. Further and/or alternative relief.”

[2] As is apparent from the notice of motion, this is in essence an application firstly, for the rescission of the order that I granted on 26 February 2015 (the order) and secondly, for the condonation for the late launching of the application for rescission of the order. The first and second respondents opposed the application.

[3] The parties in this application are Noxolo Faniswa Speelman who is cited herein firstly as the first applicant in her personal capacity and secondly as the second applicant in her representative capacity as duly appointed executrix of the deceased estate of her late husband, Mteteleli Raymond Speelman, to whom she was married in community of property until his death. Although there are two applicants, I shall refer to Mrs Speelman in both capacities as “the applicant”. The first respondent is ABSA Bank Limited (ABSA), the second respondent is Michael James Freegard, the third respondent is the Master of the High Court at Bhisho, the fourth respondent is the sheriff of the district of King Williams Town (the sheriff) and the fifth respondent is the Registrar of Deeds in the Eastern Cape.

[4] The history of this application is that during 2007 the applicant and her late husband borrowed money from ABSA. To secure the loan a mortgage bond was registered over the immovable property in ABSA’s favour. Monthly payments were to be deducted from the late Mr Speelman’s salary. He died on 7 January 2008. On 25 January 2008 the Master of the High Court appointed the applicant as executrix of the estate of her late husband. She was authorised to liquidate and distribute her late husband’s estate (the estate). During January 2008 the applicant learned that ABSA did not make any deductions from her late husband’s salary.

[5] On 14 November 2013 ABSA instituted an application against the applicant for the payment of the sums of R948 647.80 and R35 398.17, interest thereon, an order declaring the immovable property, referred to in paragraph 3 of the notice of motion, specially executable, an order authorising and directing the sheriff in terms of section 30 of the Administration of Estates Act[3] to sell the immovable property and ancillary relief. After the delivery of the answering and replying affidavits the application was heard by Roberson J who postponed it because the learned Judge was not satisfied that ABSA had complied with section 129 (1) (a) of the National Credit Act.[4] ABSA was ordered not to enrol the application until it had complied with the above subsection.

[6] On 26 February 2015 the application served before me. I was satisfied that ABSA had complied with section 129 (1) (a) of the National Credit Act. The applicant was not in attendance or represented on that day. Because I was of the view that ABSA had made out a case therefor, I granted the relief sought. In paragraphs 3 and 9 of the order I declared the immovable property specially executable. Paragraph 5 of the order that I granted reads as follows:

“The sheriff for the district of the High Court wherein the property is situated is hereby authorised and directed, in terms of section 30 of the Administration of Estates Act No. 66 of 1965 (as amended) to sell in execution the immovable property referred to in paragraph 3 above.”

[7] Subsequent to the grant of the order the sheriff attached the immovable property. The intention was for the sheriff to sell the immovable property. Before that could happen the applicant launched an application for an order that the sale in execution of the immovable property be stayed, the writ for its sale in execution be set aside and ancillary relief.

[8] The basis of that application was that the joint indebtedness of the applicant and the estate of her late husband to ABSA should not be settled before other creditors had their accounts settled. In other words, the applicant’s contention was that ABSA should not be preferred over other creditors. I dismissed the application because, in my view, the intended sale in execution was valid in that the sheriff was authorised and directed by this court to sell the immovable property.

[9] A default judgment may be rescinded under rule 31 (2) (b), rule 42 (1) (a) or on common law grounds. Rule 31 (2) (b) does not apply to the facts of this case because it applies to default judgments obtained in actions[5] only. Rule 31(2) (a) as read with (b) provides that only a defendant who “is in default of delivery of notice of intention to defend or of a plea” may apply to court to set aside the default judgment. The applicant specifically alleged that the order was erroneously sought and granted against her, which means that rule 42 (1) (a) applies.

[10] Rule 42 (1) (a) caters for a mistake in the proceedings. It is not every mistake that will cause a judgment or order to be rescinded under the subrule. The mistake may either be one which appears from the record of proceedings or one which subsequently becomes apparent from the information made available in an application for rescission of judgment.[6]

[11] The courts have held that a default judgment has been erroneously granted where a Judge, at the time when he granted the judgment, was unaware of a fact which, had he known of that fact when he granted the judgment, would have induced him not to grant that judgment or order.[7] For instance, a judgment would have been erroneously granted where the Judge was unaware that the summons had not been served on the defendant,[8] where the summons on which the judgment was based lacked averments to sustain a cause of action[9] and where the Judge overlooked the fact that the plaintiff did not comply with section 129 (1) of the National Credit Act before default judgment was granted against the defendant.[10] In such cases, the party in whose favour the default judgment is granted is not entitled to it because of a mistake in the

proceedings.[11]

[12] The applicant’s case is that the order should be rescinded because, according to her, it was erroneously sought and granted within the contemplation of rule 42 (1) (a). The applicant’s claim is based on the allegation that she was unaware of the notice having been served on her setting the matter down for hearing on 26 February 2015. The applicant was obviously required to be given notice of the hearing. Failure to give such notice would entitle her to an order declaring the order as having been granted erroneously.[12]

[13] ABSA’s main deponent denied that notice of the date of the hearing was not given to the applicant. He attached the notice of set down to his affidavit which shows that at 15h26 on 21 November 2014 the applicant’s correspondent attorney at Grahamstown was given notice that the registrar had allocated 26 February 2015 as the date for the hearing of the application. In her replying affidavit the first respondent acknowledged that the notice of set down “was served on my previous attorneys but I reiterate that they never informed me, as a result, I was unaware.” The applicant’s complaint that she was not informed by her attorney of the date of the hearing has no merit because in terms of rule 4A (1) (a) and (4) of the Uniform Rules of Court, service on her attorney was sufficient.[13] It is pointed out that courts have consistently refused applications for rescission of judgments or orders sought in terms of rule 42 (1) (a) where the party in default relied on his attorney’s negligence.[14] Since the applicant, through her attorneys, was given notice of the date of the hearing, her complaint that she was unaware of the notice, has no merit.

[14] Another loose allegation made by the applicant was that ABSA dealt with her “in the most shocking of manners” although she took her obligations towards ABSA seriously. The applicant did not attempt to substantiate that allegation by facts.

[15] Another ground upon which the applicant relied for the contention that the order was erroneously sought and granted was that the loan agreement upon which ABSA’s claim was based, was not attached to the founding affidavit. The applicant obviously relies on rule 18 (6) of the Uniform Rules of Court to complain about ABSA’s failure to attach the loan agreement to the founding affidavit. That subrule provides that a party who in his pleadings relies upon a contract shall, if it is written, attach a true copy thereof or of the part relied on in the pleading to the pleading. It is clear that the subrule applies

to actions, not applications. If the contract is unavailable, it can obviously not be attached. In this case it was

specifically alleged by ABSA that the loan agreement was destroyed in a fire. In her answering affidavit in the main application the applicant agreed that on 23 November 2007 and at King William’s Town she and her husband caused a mortgage bond to be registered over the immovable property in favour of ABSA as security for the amount of R570 000.00 lent and advanced to them and an additional amount of R114 000.00. A copy of the mortgage bond was attached to the founding affidavit. It is on the basis of that mortgage bond that ABSA launched the application against the applicant. The applicant’s complaint that the loan agreement was not attached to the founding affidavit has, in the circumstances of this matter, no merit.

[16] The applicant furthermore alleged that ABSA failed to prove the amount of R948 647.80 and R35 398.17. The mortgage bond reflects that the parties agreed that the amounts owing by the applicant and her husband to ABSA which were secured under that mortgage bond could be determined and proved by a certificate signed by any of ABSA’s managers, such certificate being accepted as proof of the facts stated therein, unless the applicant proved that the facts stated therein were incorrect. On 26 June 2013 ABSA’s National Manager of deceased estates certified in two separate certificates that, as at that date, the total amounts outstanding were R948 647.80 and R35 398.17 together with interest thereon. The allegation that ABSA failed to prove the amounts in respect whereof judgment was granted in its favour accordingly has also no merit.

[17] The next ground upon which the applicant relied for the contention that the order was erroneously sought and granted was that ABSA had, despite the order granted by Roberson J, failed to comply with the provisions of section 129 and 130 of the National Credit Act. Pursuant to the above order, the applicant received the notices in terms of section 129 (1) (a). Therein her attention was drawn to the default and it was proposed that she refer the credit agreement to a debt counsellor, alternative

dispute resolution agent, consumer court or ombud with jurisdiction. She was informed that the proposal was made with the intention that she and ABSA resolve the dispute under the credit agreement or develop and agree on a plan to bring the payments under the agreement up to date. The applicant failed to place any evidence before the court that she followed any of the proposals made to her. The allegation that ABSA failed to comply with section 129 and 130 of the National Credit Act has no factual basis and must be rejected.

[18] The next ground relied upon by the applicant is that ABSA sought and was granted an order in terms of section 30 of the Administration of Estates Act “>despite its failure to first comply with the provisions of section 29 of the Administration of Estates Act”.[15] The applicant alleged that ABSA was required to lodge its claim against the estate of the applicant’s late husband. The applicant alleged that, because ABSA did not do so, it failed to comply with section 29 of the Administration of Estates Act. Section 29 (1) provides that an executor must give notice, calling upon all person having claims against the estate of a deceased person

to lodge such claims with the executor within a period not being less than thirty days or more than three months from the date of the latest publication of the notice. Section 30 places a restriction on the sale in execution of property in the estate of any deceased person. It provides that no person charged with the execution of any writ or other process, shall sell any property in the estate of any deceased person which has been attached whether before or after his death under such writ or process. Section 30 (b) contains an exception to that restriction. After the expiry of the three month period referred to in section 29 the sale of such property may be directed by the Master in the case of property of a value not exceeding R5 000.00 and by the High Court in the case of the value of that property exceeding R5 000.00. For present purposes section 30 (b) must be understood to mean that the sheriff cannot, after the expiry of the three month period referred to in section 29, sell property in the estate of any deceased person which is valued in excess of R5 000.00 unless directed to do so by the High Court.[16]

[19] The applicant alleged that after her appointment as executrix on 25 January 2008 she approached a firm of attorneys which advertised the estate of her late husband in the Daily Dispatch newspaper and that “the estate had been wound up by Messrs Smith Tabata Attorneys and all monies due to me and the children were given to us”. That was long before ABSA launched the main application on 14 November 2013. The applicant’s reliance on ABSA’s alleged failure to comply with section 29 of the Administration of Estates Act is misplaced and should be rejected. That section does not place a duty on a person or entity like ABSA to lodge a claim against the estate of a deceased person before it can invoke the provisions of section 30. Furthermore it is common cause that the immovable property in this matter exceeds the value of R5 000.00 and the above facts show that the direction was given by this court long after the expiry of the three month period referred to in section 29.

[20] None of the grounds upon which the applicant relied for the contention that the order was erroneously granted has been sustained. The applicant has accordingly been unable to show that she is entitled to the rescission of the order in terms of rule 42 (1) (a). That finding makes it unnecessary to deal with the application for condonation for the late filing of the application for the rescission of the order. However, for the sake of completeness, I will deal with the application for condonation.

[21] The approach of the court when considering an application for condonation was summarised by Holmes JA as follows in Melane v Santam Insurance Co Ltd:[17]

“In deciding whether sufficient cause has been shown, the basic principle is that the Court has a discretion, to be exercised

judicially upon a consideration of all the facts, and in essence it is a matter of fairness to both sides. Among the facts usually

relevant are the degree of lateness, the explanation therefor, the prospects of success, and the importance of the case. Ordinarily

these facts are interrelated: they are not individually decisive, for that would be a piecemeal approach incompatible with a true discretion, save of course that if there are no prospects of success there would be no point in granting condonation. Any attempt to formulate a rule of thumb would only serve to harden the arteries of what should be a flexible discretion. What is needed is an objective conspectus of all the facts. Thus a slight delay and a good explanation may help to compensate for prospects of success which are not strong. Or the importance of the issue and strong prospects of success may tend to compensate for a long delay. And the respondent's interest in finality must not be overlooked.”

[22] In Commissioner, South African Revenue Service v van der Merwe[18] Ponnan JA added further factors to be considered when an application for condonation is considered when he said:

“Condonation, as pointed out in Uitenhage Transitional Local Council v South African Revenue Service 2004 (1) SA 292 (SCA) ([2003] 4 All SA 37; [2003] ZASCA 76) para 6, 'is not to be had merely for the asking; . . .'. Factors which usually weigh with this court in considering an application for condonation include the degree of non-compliance, the explanation therefor, the importance of the case, a respondent's interest in the finality of the judgment of the court below, the convenience of this court and the avoidance of unnecessary delay in the administration of justice.”

[23] The application for rescission of the order was made very late. It was launched on 18 August 2016, approximately 18 months after the order was granted on 26 February 2015.

[24] In my view the applicant’s explanation for the delay is far from satisfactory. It is that his attorney did not inform him of the outcome of the main application. There is no evidence that (between 14 August 2014, when she received the notice in terms of section 129, and 10 June 2016, when she signed her affidavit in support of the application to stay the sale in execution of the immovable property) she contacted her attorney to enquire about development in the main application. She alleged that on one unspecified date her attorney arrived at her house and told her that she must sign a document which she had to sign otherwise her house, the immovable property, would be sold. Without asking questions and without reading the document she signed it. It turned out that the document that she signed was her founding affidavit in the application for an order that the sale of the immovable property be stayed and the writ for its sale be set aside. It appears from the court file that her affidavit was signed on 10 June 2015. I dismissed that application on 8 December 2015. There is no affidavit from the applicant’s attorney to confirm her version or an explanation from the applicant as to the steps that she took to obtain an affidavit from her attorney. I find it improbable that the applicant, a qualified educator, would not read an affidavit consisting of only seven paragraphs before signing it. That explanation is so far-fetched that I reject it.

[25] The applicant alleged that it was not long after she signed the document that her attorney called to inform her “that the sale had indeed been stopped”. That was simply because ABSA instructed the sheriff not to sell the immovable property pending the outcome of the application which I dismissed on 8 December 2015. She furthermore alleged that “not after a long time” her attorney informed her that her application had been dismissed and that her house would be sold. The second respondent then informed her that he had purchased the immovable property and he wanted her to leave it by the end of that month. The dates of these events have not been stated by the applicant. It was the second respondent who stated in his affidavit that the sale in execution was held at King William’s Town on 3 March 2016 when he purchased the immovable property. Despite the immovable property having been transferred into his name, the applicant still occupies it. In her words, she informed the second respondent “that this was my home and I was not going anywhere”.

[26] The applicant furthermore alleged that after her attorney had informed her of the dismissal of the application and after numerous visits from the second attorney, she approached other attorneys to assist her in her battle with ABSA. She had no luck until she met her present attorney. Once again no dates have been mentioned when she met the various attorneys and when she instructed her present attorney to represent her in these proceedings. She stated that her attorney briefed counsel to represent her in court on 20 June 2016! However, this application was launched only on 18 August 2016.

[27] In my view the above facts do not constitute a reasonable or satisfactory explanation for the late launching of the application for the rescission of the order.

[28] Throughout her affidavit the applicant stated that ABSA, through its officials at its King William’s Town branch, refused to settle the matter with her. Her version in that regard should be rejected as far-fetched. She made the loose allegation that upon receipt of her husband’s pension monies she went to ABSA where she offered to settle the whole loan amount. She was allegedly informed that she could not do so because her “account was handled by head office”. She did not mention the name of the bank official who gave her that information. ABSA denied that allegation and pointed out that its core business is to receive payment once it has loaned money to a person, that it would not refuse an offer to pay from the applicant or any other borrower and that, because the applicant’s loan account is a bank account, payment could have been made on that account at any branch and that it simply did not make sense that payment would be refused from the applicant, whose account was in arrears. The applicant’s response to ABSA’s version was to reiterate the allegations that she made in her founding affidavit.

[29] ABSA’s claim against the applicant is that the applicant is indebted to it in the sum of R948 647.80 and R35 398.17 plus interest thereon. It is in respect of that claim that the applicant has not disclosed a bona fide defence. Her allegation that she wanted to pay but ABSA’s officials informed her that she could not pay because her matter was being attended by ABSA’s head office is no defence.

[30] There can be no doubt that, in the interest of the applicant and the first and second respondents, this matter needs to be finalised. The delay in its finalisation impacts negatively on the administration of justice.

[31] Since there are no reasonable prospects of the applicant’s “defence” being successful in the event of the order being rescinded, since the applicant has failed to give a reasonable explanation for the long delay in launching the application for rescission of the order, since it would be in the interest of all concerned that the order reaches finality and since the administration of justice would suffer by any further delay in the execution of the order, the application for condonation must be dismissed. There is no reason to deviate from the general rule that costs should follow the result.

[32] In the result, the application is dismissed with costs.

_________________________

G H BLOEM

Judge of the High Court

For the applicant:

Adv PHZ Zilwa SC and Adv ZB Ncalo, instructed by Babe and Talaphile Inc, Mthatha and Mili Attorneys, Grahamstown

For the first respondent:

Adv C van der Merwe, instructed by Netteltons, Grahamstown

For the second respondent: Adv KL Watt, instructed by Netteltons, Grahamstown

Date of hearing:

25 May 2017

Date of delivery of the judgment: 11 July 2017

[1] The order referred to was granted on 26 February 2015, not 3 March 2016.

[2] There are only five respondents herein. Reference to the sixth respondent in paragraphs 5 and 6 of the notice of motion must be read to be reference to the Registrar of Deeds of the Eastern Cape, the fifth respondent.

[3] Administration of Estates Act, 1965 (Act No. 66 of 1965).

[4] National Credit Act, 2005 (Act No. 34 of 2005).

[5] In terms of rule 1 “action” means a proceeding commenced by summons.

[6] Lodhi 2 Properties Investments CC and another v Bondev Developments (Pty) Ltd 2007 (6) SA 87 (SCA) at 94H-95C.

[7] Nyingwa v Moolman NO 1993 (2) SA 508 (Tk) at 510G.

[8] Fraind v Northmann 1991 (3) SA 837 (W).

[9] Silver Falcon Trading 333 (Pty) Ltd v Nedbank Ltd 2012 (3) SA 371 (KZP).

[10] Kgomo and another v Standard Bank of South Africa and others 2016 (2) SA 184 (GP).

[11] Lodhi 2 Properties at 94A-C.

[12] Lodhi 2 Properties at 93H-94B.

[13] Rule 4A (1) (a) provides that service of all documents and notices, served subsequent to documents initiating application proceedings in terms of rule 4 (1) (a), may be served by hand at the physical address for service provided.

[14] Bakoven Ltd v G J Howes (Pty) Ltd 1992 (2) SA 466 (E) at 472C.

[15] Sections 29 and 30 of the Administration of Estates Act read as follows: “29. Notice by executors to lodge claims (1) Every executor shall, as soon as may be after letters of executorship have been granted to him, cause a notice to be published in the Gazette and in one or more newspapers circulating in the district in which the deceased ordinarily resided at the time of his death and, if at any time within the period of twelve months immediately preceding the date of his death he so resided in any other district, also in one or more newspapers circulating in that other district, or if he was not ordinarily so resident in any district in the Republic, in one or more newspapers circulating in a district where the deceased owned property, calling upon all persons having claims against his estate to lodge such claims with the executor within such period (not being less than thirty days or more than three months) from the date of the latest publication of the notice as may be specified therein. (2) All claims which would be capable of proof in case of the insolvency of the estate may be lodged under subsection (1). 30. Restriction on sale in execution of property in deceased estates No person charged with the execution of any writ or other process shall- (a) before the expiry of the period specified in the notice referred to in section twenty-nine; or (b) thereafter, unless, in the case of property of a value not exceeding R5 000, the Master or, in the case of any other property, the Court otherwise directs, sell any property in the estate of any deceased person which has been attached whether before or after his death under such writ or process: Provided that the foregoing provisions of this section shall not apply if such first-mentioned person could not have known of the death of the deceased person.”

[15] Sections 29 and 30 of the Administration of Estates Act read as follows:

“29. Notice by executors to lodge claims

(1) Every executor shall, as soon as may be after letters of executorship have been granted to him, cause a notice to be published in the Gazette and in one or more newspapers circulating in the district in which the deceased ordinarily resided at the time of his death and, if at any time within the period of twelve months immediately preceding the date of his death he so resided in any other district, also in one or more newspapers circulating in that other district, or if he was not ordinarily so resident in any district in the Republic, in one or more newspapers circulating in a district where the deceased owned property, calling upon all persons having claims against his estate to lodge such claims with the executor within such period (not being less than thirty days or more than three months) from the date of the latest publication of the notice as may be specified therein.

(2) All claims which would be capable of proof in case of the insolvency of the estate may be lodged under subsection (1).

30. Restriction on sale in execution of property in deceased estates

No person charged with the execution of any writ or other process shall-

(a) before the expiry of the period specified in the notice referred to in section twenty-nine; or

(b) thereafter, unless, in the case of property of a value not exceeding R5 000, the Master or, in the case of any other property, the Court otherwise directs,

sell any property in the estate of any deceased person which has been attached whether before or after his death under such writ or process: Provided that the foregoing provisions of this section shall not apply if such first-mentioned person could not have known of the death of the deceased person.”

[16] da Faria v Sheriff, High Court, Witbank 2005 (3) SA 372 (T) at 376C-D.

[17] Melane v Santam Insurance Co Ltd 1962 (4) SA 531 (A) at 532C.

[18] Commissioner, South African Revenue Service v van der Merwe 2016 (1) SA 599 (SCA) at 609B-C.