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IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

 

(1)           REPORTABLE: YES/NO

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

(3)           REVISED: NO.

 

Case No: 33056/2017

20/12/2019

 

In the matter between:

 

SIBONGILE POLITE MNCUBE                                                                                  Applicant

 

and

 

THE STANDARD BANK OF SOUTH AFRICA LIMITED                                        Respondent

JUDGMENT

CORAM: DAVIES AJ

[1]          This is an application for the rescission of the default judgment granted by the Hon. Mokose AJ (as she then was) on 8 August 2017.

[2]          In terms of the aforesaid default judgment, an order was granted directing payment to the respondent in the amount of R690 725.56 interest on the aforesaid sum at the rate of 11,79% per annum with effect from 28 February 2017 until date of payment; payment of the sum of R247 .84 per month from 28 February 2017 until date of payment and an order declaring Erf 7811, Roodekop, Extension 11, Registration Division IR, Gauteng Province, held by Deed of Transfer T29936/2012 to be specially executable ; an order in terms whereof the Registrar is directed to issue a warrant of execution against the immovable property in terms of rule 46(1) of the Uniform Rules of Court; as well as costs on the scale as between attorney and own client.

[3]          The applicant is Sibongile Polite Mncube, a major female who is in default of her home loan obligations to the respondent, Standard Bank of SA Limited.

[4]          According to the applicant, she first became aware of the aforesaid judgment in November 2017, a few months after default judgment had been granted. She avers that certain (unspecified) arrangements were made, and it was agreed that Standard Bank would not execute against the aforesaid property.

[5]          In February 2018, she heard that Standard Bank intended to sell the relevant property on auction whereupon she approached her attorneys Pulane Attorneys who instituted rescission proceedings on or about 16 February 2018. accept that in doing so, the applicant acted with reasonable expedition.

[6]          The applicant refers to a fundamental right to housing, and the fact that she has minor children. This must be construed as a reference to s26 of the Constitution Act 108 of 1996, which refers to the right of access to adequate housing.

[7]          The applicant mentions that she purchased the property under consideration on 12 June 2012. Initially her monthly instalment was in the amount of R6 287.45 at which time she was earning approximately R20 000.00 per month. However, her salary was thereafter cut from R20 000.00 to R10 000.00  per month, and this no doubt is the root cause of her default, which she does not dispute.

[8]          The applicant does dispute the correctness of the Sheriff's return of service indicating personal service of the summons, and she similarly denies receipt of the notices posted in terms of s129 of the National Credit Act 34 of 2005.

[9]          Her defences to the effect that she paid what she could under the circumstances, and proper acceptable arrangements were made with unspecified officials of Standard Bank. She points out that the respondent may not seek to declare property executable without first attaching movable property. This proposition is stated too broadly as the relevant rule provides that the injunction to attach immovable property as contained in rule 46(1)(a)(i) is followed by the disjunctive word " or" and then followed by 46(1)(b)(ii) to the effect that " such immovable property has been declared to be specially executable by the court.. ." . I nevertheless have regard to, and indeed was concerned by, the fact that there seemed to be insufficient material before Mokose AJ or myself as to the amount of arrears outstanding as at the date of default judgment, as well as the amount outstanding at the date when the rescission application came before me. I refer to this aspect more fully below.

[10]       The answering affidavit of the respondent was deposed to by a Ms Rasikhuthuma, a manager, on or about 18 April 2018. I accept the grounds specified for condonation as being worthy of the relief sought. Ms Rasikhuthuma refers inter alia to the Sheriffs return of service which indicates personal service, as well as proof of postage in terms of s129 of the National Credit Act, which were dispatched by registered letter on 20 February 2017.

[11]       She mentions further that there were numerous communications between the applicant and representatives of the respondent. She mentions also that the aforesaid notices fail to "track and trace" and therefore the Sheriff was instructed to serve the notices at the applicant's place of employment which was apparently achieved.

[12]       Ms Rasikhuthuma contends that prior to default judgment, the attorneys for the respondent attempted to reach the applicant telephonically but were unable to do so. She points out that after default judgment was granted on 8 August 2017, and in fact on 15 September 2017, the applicant contacted the respondent's attorneys in respect of the arrear amount. The applicant was advised that legal action would not halt unless there was a concrete payment arrangement in place. Pursuant to further communication on 27 September 2017, the applicant advised that she would be able to pay R27 000.00 towards the arrears at the end of September 2017. She was advised that legal action would proceed until the full arrears were settled. These averments are confirmed by the attorney concerned, one Christine Gerber.

[13]       Ms Rasikhuthuma proceeds to aver that the writ of attachment was personally served on the applicant on 4 October 2017 at her place of employment, and a sale of execution was scheduled for 20 November 2017. This is supported by the Sheriff's return of service confirming the date of sale. She further points out that on 13 October 2017 the applicant contacted the attorneys for Standard Bank and confirmed that R26 000.00 had been paid into the home loan account which was indeed done. An indulgence was granted to the applicant and the sale of execution scheduled for 20 November 2017 was postponed despite the fact that the arrears were not yet up to date.

[14]       On 16 October 2017 the applicant advised that the balance of the arrears would be settled before the end of January 2018 in two instalments, which was accepted on behalf of Standard Bank. On 6 December 2017 the applicant advised the attorneys for Standard Bank that she was in the process of selling her motor vehicle, however she failed to meet her obligations to pay the arrears that were then outstanding and a new sale in execution was scheduled for 19 February 2018.

[15]       However, on 13 February 2018 the applicant contacted the attorneys for Standard Bank and advised that she is unable to settle the arrears. She was advised about the EasySell department of the respondent but allegedly failed to sign a mandate despite showing some interest. In light of my judgment herein, I urge the applicant to avail herself of this mechanism.

[16]       It appears that from the time of the instalment of R26 000.00 paid on 13 October 2017 until the date of the answering affidavit on 29 March 2018, no further payments were received. This position was clarified by way of the supplementary affidavits to which I refer more fully below.

[17]       In light of the fact that no replying affidavit was filed, I have no hesitation in accepting the correctness of the allegations regarding communications and arrangements with the applicant. It is furthermore clear that she is in default of her obligations to the respondent, and moreover this indebtedness is getting progressively worse.

[18]       Nevertheless, the court has an oversight obligation that requires careful scrutiny of any application to declare a residential immoveable property special executable. The fact that the property under consideration is home to a minor also weighs heavily. Consequently, I had regard to those cases which seek to balance the interests of the creditor and the judgment debtor in a manner that is both commercially sustainable and constitutionally compliant.[1]

[19]       Therefore, at the hearing of the matter on 20 May 2019, the applicant appeared in person and the respondent was represented by Advocate Winnertz. I was concerned by the fact that the total arrears appeared to be a relatively small amount, and moreover felt that further information was required as to the present amount outstanding, since the applicant claimed to be doing everything in her power to reduce her indebtedness, and claimed to have made several payments since the inception of the rescission proceedings. I therefore afforded the respective parties the opportunity to place more recent information as to the extent of the outstanding arrears before the court.

[20]       Pursuant to this request, Mr Winnertz handed up the index to the application for default judgment, which included  the affidavit of one Natalie Mulvaney who purports to have personal knowledge of the fact that at the date of default judgment, the total arrears due by the defendant stood in the amount of R52 540.79. This document was accepted and marked 'X' .

[21]       A separate supplementary affidavit of Ms Helmchen, also an attorney adduced evidence of an updated certificate of balance as at 23 May 2019. This document, which was likewise accepted and marked 'Y' records that the outstanding balance of the applicant was R751 811.16 and the arrear amount as at that date was R95 812.96. Furthermore, the current monthly instalment as adjusted was RB 098.82. She further referred to the debit and credit statements attached to her affidavit which show that although the applicant has indeed attempted to make payments, the overall picture remains bleak: the applicant is clearly slipping further and further behind as the accumulated arrears increase.

[22]      The applicant handed up documentation which indicated a payslip, which was accepted and marked as annexure 'Z 1', and which indicates that she has a net salary in the amount of R11 540.25. She also handed up an affidavit deposed to at the Sandton Police Station, marked 'Z 2'. The affidavit purports to set out her fixed monthly expenses as 'rent' in the amount of RB 500.00,(whichrefers to the bond repayments), water in the amount of R800.00, electricity in the amount of R300.00, transport in the amount of R1 200.00 and groceries in the amount of R1 000.00. From the above, it is clear that the applicant's salary is not sufficient to make adequate inroads into the arrears amount.

[23]      Mr Winnertz, realizing that the applicant enjoyed the sympathy of the court and acknowledging that she had indeed been making efforts to reduce the arrears proposed a form of compromise, which he assured the court was in any event in accordance with the established practice of the respondent, Standard Bank.

[24]      He correctly pointed out that the respondent was entitled to call up the entire loan amount in terms of the governing acceleration clause. He suggested that since the ordinary period for arranging a sale of execution was approximately  four months, I should nevertheless authorise the sale in execution to be held within that period, subject to the express proviso that if the respondent was able to settle the arrears outstanding, Standard Bank should be directed to reinstate the credit agreement as it ordinarily does.[2]

[25]       Mr Winnertz pointed out that the applicant would also have the opportunity to approach the EasySell department of Standard Bank at any time before the sale in execution, in order to have the property under consideration sold by means other than a Sheriff's auction, which often achieves a purchase price substantially lower than the market value. This concession is correctly made, and in the event that the applicant has not fortuitously achieved a windfall enabling her to settle the arrears, then she is urged to take advantage of the EasySell arrangement, because it will ensure that such equity as is available after paying the debts owing to Standard Bank, is made available to her. On the other hand, if the property is sold in execution, it is highly unlikely that the entire loan amount will be repaid.

[26]       In the event, I make the following order:

1.          The application for rescission of the default judgment granted by Mokose AJ (as she then was) is dismissed with costs;

2.         The respondent is authorised to issue all such notices and proceedings as will enable it to properly sell in execution the relevant immovable property, Erf 7811, Roodekop , Extension 11, situated at 7811 Protea Street, Roodekop;

3.         The aforesaid sale in execution shall not occur sooner than four months from the date of this judgment;

4.         In the event that the applicant is able to make payment of the arrear amount outstanding, then the respondent is directed to reinstate the relevant credit agreement and halt any pending sale in execution.

5.         A copy of this judgment and any subsequent legal process in pursuance of the aforesaid sale in execution must be served by the Sheriff at the property under consideration, as well as on the applicant's place of employment at Deli 1, Shop L01A, Sandton City Shopping Centre, Sandton Drive;

 

 

 

SW DAVIES AJ

Gauteng  Division, Pretoria

 

 

CASE NO: 33056/2017

 

HEARD ON:  23 May 2019

 

FOR THE APPLICANT: In person

 

FOR THE RESPONDENT: ADV. H. WINNERTZ

 

INSTRUCTED BY: Haasbroek & Boezaart Inc.

 

DATE OF JUDGMENT:      20 December 2019

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