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

IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG

                                                         APPEAL COURT CASE NO:  5024/2018
                                                         COURT A QUO CASE NUMBER: 17143/2011

(1)	REPORTABLE: YES / NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED. 

         ……………………..		………………………...
                   DATE			        SIGNATURE

In the matter between:

BENSON, JM                                                               	              1st Appellant
BENSON, GV                                                                              2nd Appellant

And

STANDARD BANK OF SOUTH AFRICA (PTY) LIMITED	          1ST  Respondent
SHERRIFF OF JOHANNESBURG WEST				2ND  Respondent
H.M BOTHA REGISTRAR OF DEEDS: JOHANNESBURG             3RD Respondent
GERT CORNELIUS                                                                            4TH Respondent
(ID:…)

J U D G M E N T  

UNTERHALTER J

INTRODUCTION

1.	The Appellants seek to overturn the dismissal by Du Plessis AJ of an application for the rescission of a judgment granted  by default on 1 June 2011 by Kathree-Setiloane J (‘ the default judgment “ ) The default judgment was obtained by the Standard Bank of South Africa Limited ( “Standard Bank” ) , the First Respondent in this appeal, in respect of loans made by the Standard Bank to the Appellants and secured by a mortgage bond.

2.	The default judgment granted against the Appellants was for the payment of the amount of R 290 942.14; interest to date of payment; an insurance premium of R228.99 and costs on the attorney and client scale. The remaining prayers, declaring the property executable and authorizing a warrant of execution in respect of the property, were postponed sine die.

3.	The Standard Bank then secured a further order before Kgomo J on 31 January 2012. That order against the Appellants repeated the contents of the earlier order but in addition declared the subject property executable and authorized the issuance of a warrant of execution in respect of the property.

4.	In due course, the property was bought by the Fourth Respondent in this appeal at a sale in execution on 17 May 2012 and was registered in his name on 24 May 2013.

5.	The Appellants brought an application to rescind the order of Kgomo J on 2 August 2012 (“the first rescission application“). The first rescission application was dismissed by Mia AJ on 13 February 2013. The Appellants then launched a second rescission application against the order of Mia AJ on 6 May 2013. That application was dismissed by Weiner J on 14 October 2014. On 3 November 2014, the Appellants brought an application for leave to appeal the dismissal of their second rescission application. That application is still pending. 

6.	On 8 March 2015, the Appellants brought a third rescission application, this time seeking the rescission of the default judgment granted by Kathree-Setiloane J on 1 June 2011. This third rescission application was heard by du Plessis AJ and dismissed on 30 November 2017. On 20 March 2018, the Appellants were granted leave to appeal to this Court.

7.	The Appellants contended before du Plessis AJ that rescission of the default judgment was warranted because the notice required in terms of s 129 of the National Credit Act 34 of 2005 ( “the NCA”) had not been properly sent to the Appellants prior to the Standard Bank launching its application for relief against the Appellants. The Appellants say in their third rescission application that the letter sent by the Standard Bank’s attorneys to the Appellants was addressed to “ […] K Street, Montclare, Randburg 2092 “, whereas the address  chosen by the Appellants in their loan agreements with the Standard Bank was “[…] K Street, Montclair 2092 “ which is an address in Johannesburg, and not in Randburg.  Accordingly, proper notice was not given in terms of s 129 of the NCA, and the application that was brought by Standard Bank for the default judgment was a nullity and the default judgment stands to be rescinded because it was erroneously sought and granted.

8.	Du Plessis AJ dismissed the third rescission application.  The Learned Judge found that although the s129 notice was forwarded to the wrong address, the notice was received by the Appellants when the Standard Bank brought its application for a money judgment and consequential relief against the Appellants. The failure to send the notice was only a dilatory defence that was cured when the Standard Bank’s application was served on the Appellants. That being so, du Plessis AJ reasoned, the default judgment was not erroneously granted, and the rescission application was dismissed with costs.

9.	The Appellants, with leave, appeal the order made by du Plessis AJ. The Fourth Respondent, the owner of the property bought at the sale in execution, opposes the appeal.

THE VALIDITY OF THE NOTICE

10.	  The premise of the Appellants’ case is that Standard Bank failed to give them notice in compliance with s129 of the NCA. The basis of this contention is that while the Appellants’ chosen address for notices was […] K Street, Montclair 2092, the Standard Bank sent the s129 notice by registered mail to […] K Street, Montclare, Randburg 2092. The insertion of the reference to Randburg, so it is alleged, meant that the address used by the Standard Bank was erroneous. This resulted in what the   postal service terms a “miss-sort” and, so it is contended, the letter was not delivered to the Appellants. And hence, there has been a want of compliance with the requirements of s129(5) of the NCA.

11.	 The record contains both the registered letter tracking and tracing slip, as also the parcel tracking results of the registered letter addressed to the Appellants. The slip does include the reference to Randburg, but it also contains the postal code which the Appellants accept was correct. The question is whether the inclusion of the reference to Randburg gave rise to a failure to deliver notice to the Appellants as required by s129 (5) (a) of the NCA. The parcel tracking results ( attached to  the Apppellants’ application ) in respect of the registered letter sent by the Standard Bank show that the letter arrived at the Cresta branch of the Post Office on 26 May 2011 and there  the following entry appears: “ First notification to recipient “. As the results are so ordered that the first entry records the last action in time, it appears that while earlier actions within the postal system did not result in notification to the Appellants, notification did take place on 26 May 2011.

12.	 Since the very point of registered mail is to trace and track a registered letter, there is no reason to doubt what the tracking result reflects. There was, in consequence, notification to the recipient at the address indicated on the tracking and tracing slip. The founding affidavit, while referencing the insertion of the reference to Randburg, does not claim that no notification was sent to the address; nor that the post code was not used by the Post Office to make the notification; nor that there is a […] K Road, Montclare, Randburg with the same post code that exists as an address to which such notification was sent. The Appellants do say that there is a K Road in Randburg, but they do not say that it has the same postcode as that used in the registered letter.  

13.	 On the strength of the parcel tracking results and the absence of an address other than that of the Appellants to which notification could have been given, the Appellants have failed to make out a case that the registered letter containing the s129 notice was not delivered to the Appellants’ chosen address. The Appellants have thus failed to show that the notice was not delivered in compliance with s129 (5) and hence, the Appellants’ point of departure is not proven. And the appeal must fail on this basis.

NOTICE IN THE APPLICATION

14.	  Central to the reasoning of du Plessis AJ was the observation that it was common ground that the s129 notice formed part of the application launched by Standard Bank on 5 May 2011 for a money judgment and consequential relief ( “ the Standard Bank application “ ). The Standard Bank application was served on the same day at the Appellants’ chosen domicilium.  Before us, counsel for the Appellants does not contest that the Appellants received notice of the Application and simply failed to appear in court when the application was set down. And in consequence, the default judgment was granted on 1 June 2011. The Appellants offer no explanation for their default.  From the time that the Appellants received the s 129 notice upon the service of the Standard Bank application, they could have taken steps to protect their rights, yet they failed to do so.

15.	 The Appellants contend that the s129 notice they received with the Standard Bank application is a nullity because s 129 (1) (b) does not permit a credit provider to commence any legal proceedings to enforce an agreement before it has given notice to the credit receiver of the options that are set out in s129 (1) (a). The Appellants rely upon the decision of the Constitutional Court in Sebola and  the Kgomo decision.

16.	 In Sebola, the Constitutional Court made the following clear. First, the commencement of proceedings without prior notice does not render the proceedings a nullity, but simply requires an adjournment of proceedings so as to permit the credit provider to give notice before the proceedings may be resumed. A failure to give notice does not invalidate the proceedings but is simply dilatory ( see para [53] ). Second, the delivery of the notice in terms of ss 129 and 130 requires the credit provider to aver and prove that the notice in s129 was delivered to the consumer. Where the post is used, it will suffice to show delivery if there is proof of registered dispatch to the address of the consumer, together with proof that the notice reached the appropriate post office for delivery to the consumer, in the absence of proof to the contrary. ( see para [87] ).
17.	 In Sebola, it was accepted that the defendants were unaware of the summons and that the notice sent by registered mail was not sent to the correct post office, and rescission was granted.  In Kgomo, the s 129 notice was annexed to the particulars of claim, but the “track and trace “report from the post office did not reflect the Applicants’ correct address. Dodson AJ held in Kgomo that the judgment granted by default was erroneously granted because the use of an incorrect address for the delivery of the s129 notice was apparent when comparing that address with the address in the particulars of claim, and accordingly the court hearing the application for default judgment was required to adjourn the proceedings and direct the steps the credit provider was to take before the proceedings could be resumed in terms of s 130 (4)(b)(i) and (ii) of the NCA. Dodson AJ went on to  hold that even if the error was not apparent, if there was noncompliance with ss129 and 130 to deliver the notice,  rescission is an available remedy . ( see para [56] )

18.	 What the Sebola decision did not have to decide is whether any non-compliance with the provisions of the NCA that is cured prior to the hearing of the application for judgment by default, nevertheless requires an adjournment of the application.  The answer to this question flows from the provisions of s 130 (4) (b)(ii). If there are no further steps that are required of the credit provider, there can be no purpose served in adjourning the proceedings. Further delay would serve no purpose, and, as Sebola makes plain, any non-compliance does not invalidate the proceedings but simply delays their finalization to ensure that due process is followed and the credit receiver can enjoy his or her rights.  Of course, the non-compliance must be properly cured, and the credit receiver must be given the statutory time to consider his or her position. But if that is done between the time that the non-compliance is cured and the time that the matter is heard in court, to require an adjournment for its own sake has no point and is inconsistent with the scheme of ss129 and 130. In so far as the decision in Kgomo suggests otherwise, I am in respectful disagreement with it.

19.	 On the facts in this appeal, the Appellants obtained actual notice of their rights as required in terms of s 129. The Appellants take no issue with the contents of the letter from the attorneys of the Standard Bank advising them of their rights under the NCA. That being so, no further steps were required to give notice under s 129 to the Appellants. The Standard Bank application was served on the Appellants on 5 May 2011. The Standard Bank application was heard on 1 June 2011. By that time, the Appellants had been in default under their credit agreements for at least 20 days and 10 business days had elapsed since delivery of the s129 notice on 5 May 2011. By my calculation, some 18 business days had elapsed. There was accordingly compliance by the Standard Bank with the requirements of ss129 and 130 at the time the Standard Bank application was heard on 1 June 2011. The default judgment was thus not erroneously sought and granted. And for these reasons also this appeal must fail.

20.	 In these circumstances, the rescission application could not succeed, and du Plessis AJ correctly so found.

LIS PENDENS

21.	 There remains one further obstacle to the Appellants’ case.  The Appellants’ third rescission application sought in the Notice of Motion the rescission of the order of 1 June 2011, and, in addition, the rescission of the order of Kgomo J dated 31 January 2012. It will be recalled that the Kgomo J order provided again for a money judgment (as the earlier order had done) and also declared the property executable and authorized a warrant of execution in respect of the property.
22.	 The third rescission application has this difficulty. In seeking the rescission of the order of Kgomo J by way of the third rescission application, the Appellants have to explain how they can proceed with this application when they had sought the rescission of the Kgomo J order in two other rescission applications, one of which the Appellants have sought to appeal.  Part of the relief sought in the third rescission application is the subject of the first rescission application; and the second rescission application sought to rescind the outcome of the first rescission application. That application was dismissed by Weiner J. The Appellants seek to appeal this decision. These proceedings are still pending.  The Appellants cannot seek the same relief in the third rescission application that they are seeking to secure by appealing (if leave is granted ) the refusal of the second rescission application. Lis pendens applies.

23.	This means that the third rescission application seeks new relief only in respect of the order of 1 June 2011. But that relief cannot be sought because the money judgment that is the subject matter of the 1 June 2011 order is also relief given in the Kgomo J order in respect of which rescission has been refused. The Kgomo J order thus stands, and cannot be reconsidered by this Court by way of this appeal. This renders moot the remaining relief that was sought in the third rescission application. 

24.	For these reasons also the appeal must fail.

In the result:

The appeal is dismissed with costs.

____________________
Unterhalter J
Judge of the High Court

I concur:

___________________
Makhanya J
Judge of the High Court 

I concur:

____________________
Tsoka J
Judge of the High Court 

Date of Hearing: 20 February 2019
Judgment Delivered: 21 February 2019
Appearances: 
Advocate for the Appellant: Advocate Radebe instructed by E.D Van Schalkwyk Attorneys  
Advocate for the Respondent: Advocate Bhima instructed by Swanepoel Van Zyl Attorneys