Absa Bank Ltd v Petersen

• Jurisdiction: South Africa
• Citation: 2013 (1) SA 481 (WCC)

Absa Bank Ltd v Petersen
2013 (1) SA 481 (WCC)

2013 (1) SA p481

Citation	2013 (1) SA 481 (WCC)
Case No	934/2011
Court	Western Cape High Court, Cape Town
Judge	Binns-Ward J
Heard	September 13, 2012
Judgment	September 20, 2012
Counsel	D van Reenen for the plaintiff.; D Rabie for the defendant.

Flynote : Sleutelwoorde D

Mortgage — Mortgage bond — Foreclosure — Reasons for refusal to order property E executable — Where court grants judgment for money but refuses to order property specially executable it must provide reasons for its refusal.

Headnote : Kopnota

An acting judge had granted a bank default judgment in respect of a loan to P, which was a credit agreement in terms of the National Credit Act 34 of 2005, F and which was secured by a mortgage bond over P's home. The acting judge had however refused the bank's application for the home to be declared specially executable, and the bank now applied for such an order, while P applied in terms of rule 27 for extension of the time within which an application for rescission of the judgment could be brought, and in terms of rule 31(2)(b) for such rescission. G

P's applications for an extension of time and for rescission of judgment

In issue here was whether the requirement for both an extension and rescission — good cause — had been shown. This would be approached in an integrated manner. (Paragraphs [2] – [4] at 484C – H.)

P based his applications on alleged non-receipt of a notice in terms of s 129 of H the National Credit Act; and an alleged pactum de non petendo with the bank. (Paragraphs [9] and [21] at 486B – D and 491B – C.)

As to non-receipt of the s 129 notice, that section obliged a credit provider to give a consumer notice of its default under a credit agreement and of certain options open to it before the credit provider can proceed to enforce the agreement. The notice requirement is satisfied by dispatch of the notice by I registered mail and its delivery to the correct post office as shown by a 'track and trace' report. (Paragraphs [6], [8], [11] – [13], [16] – [17] and [19] at 485B – C, 485G – 486A, 487B – 488G, 489D – H and 490C – F.)

Here the bank had obtained default judgment before the Constitutional Court case that had instituted the delivery requirement. P claimed that the case inspired his belated application for rescission, the requirement of delivery not having been met. (Paragraph [20] at 490F – G.) J

2013 (1) SA p482

A The court noted, however, P's claims of an agreement with the bank to accommodate his cash-flow problems, and that the bank's institution of proceedings conflicted with it. These claims suggested P had been in a position from the time he had come to know of the default judgment to apply for its rescission, which he had not done, and his behaviour in fact suggested he had acquiesced in it. (Paragraphs [21] and [30] at 491B – D and 494C – D.) B

The court also examined the materiality of P not having received the s 129 notice, and concluded that he would not have been able to profitably use any of the options s 129 provides. (Paragraphs [22], [25] – [26] and [29] at 491E – H, 492E – 493E and 494B.)

The court held accordingly that an extension of time and rescission were not C justified. (Paragraph [31] at 494E.)

The bank's application for an order permitting execution against P's home

In issue here was the justifiability of the acting judge's refusal to order the home specially executable, and whether on a consideration of all the relevant circumstances such an order ought to be made. (Paragraphs [32] – [33] at 494F – 495C.)

D As to the refusal to order execution against the home, the court noted that such an order was usually sought and granted at the time of a grant of judgment for money. The proper approach was to give effect to the mortgage bond unless something made it inappropriate to do so. And where such an order was refused, the court ought to state its reasons for doing so. Here there was E nothing to support a conclusion by the acting judge that there had been sufficient movable property to satisfy the judgment debt, or that the bank had acted in bad faith or abused court procedure. The refusal of the order had thus been unwarranted. (Paragraphs [33] – [35] at 494I – 496F.)

In regard to whether such an order ought to be made, the court would dismiss the factors that P raised. These were that the property was the family home; F that its sale in execution would realise less than it was worth; that owing to its structure (it was consolidated with a property owned by P's wife) it would be difficult to sell; that he was in the process of raising funds to discharge his debt; and that it was unreasonable to execute where there were alternative means to obtain the amount owing. (Paragraph [36] at 497B – C.)

G Accordingly the court declared the home executable. (Paragraphs [42] – [43] at 498H – I.)

Cases Considered

Annotations:

Case law

Absa Bank Ltd v Mkhize and Another and Two Similar Cases 2012 (5) SA 574 (KZD): doubted

Absa Bank Ltd v Ntsane and Another 2007 (3) SA 554 (T): referred to H

African Dawn Property Finance 2 (Pty) Ltd v Dreams Travel and Tours CC and Others 2011 (3) SA 511 (SCA): referred to

Barkhuizen v Napier 2007 (5) SA 323 (CC) (2007 (7) BCLR 691; [2007] ZACC 5): dictum in paras [57] and [87] applied

Bengwenyama Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and Others 2011 (4) SA 113 (CC) (2011 (3) BCLR 229; [2010] ZACC 26): dictum in para [85] applied I

Cairns' Executors v Gaarn 1912 AD 181: dictum at 186 applied

City of Johannesburg v Changing Tides 74 (Pty) Ltd and Others 2012 (6) SA 294 (SCA): referred to

Colonial Mutual Life Assurance Society Ltd v Tilsim Investments (Pty) Ltd 1952 (4) SA 134 (C): dictum at 135C applied J

2013 (1) SA p483

Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA) ([2003] 2 All SA 113): A dictum in para [11] applied

Entabeni Hospital Ltd v Van der Linde; First National Bank of SA Ltd v Puckriah 1994 (2) SA 422 (N): referred to

First National Bank of SA Ltd v Ngcobo and Another 1993 (3) SA 490 (D): referred to

Gundwana v Steko Development and Others 2011 (3) SA 608 (CC) (2011 (8) BCLR 792; [2011] ZACC 14): B dictum in para [58] applied

Jaftha v Schoeman and Others; Van Rooyen v Stoltz and Others 2005 (2) SA 140 (CC) (2005 (1) BCLR 78; [2004] ZACC 25): referred to

Ledlie v Erf 2235 Somerset West (Pty) Ltd 1992 (4) SA 600 (C): referred to

Majola v Nitro Securitisation 1 (Pty) Ltd 2012 (1) SA 226 (SCA): referred to

Mphahlele v First National Bank of SA Ltd 1999 (2) SA 667 (CC) (1999 (3) BCLR 253): C referred to

Munien v BMW Financial Services (SA) (Pty) Ltd and Another 2010 (1) SA 549 (KZD): referred to

National Credit Regulator v Nedbank Ltd and Others 2009 (6) SA 295 (GNP): referred to

Nedbank Ltd and Others v National Credit Regulator and Another D 2011 (3) SA 581 (SCA): referred to

Nedbank Ltd v Binneman and Thirteen Similar Cases 2012 (5) SA 569 (WCC): considered

Oudekraal Estates (Pty) Ltd v City of Cape Town and Others 2004 (6) SA 222 (SCA) ([2004] 3 All SA 1): referred to

Rossouw and Another v FirstRand Bank Ltd 2010 (6) SA 439 (SCA): E referred to

Sebola and Another v Standard Bank of South Africa Ltd and Another 2012 (5) SA 142 (CC) ([2012] ZACC 11): considered

Silber v Ozen Wholesalers (Pty) Ltd 1954 (2) SA 345 (A): referred to

Standard Bank of South Africa Ltd v Bekker and Another and Four Similar Cases 2011 (6) SA 111 (WCC): referred to F

Standard Bank of South Africa Ltd v Hunkydory Investments 188 (Pty) Ltd and Others (No 2) 2010 (1) SA 634 (WCC): referred to

Standard Bank of South Africa Ltd v Saunderson and Others 2006 (2) SA 264 (SCA) (2006 (9) BCLR 1022; [2006] 2 All SA 382): referred to

Strategic Liquor Services v Mvumbi NO and Others 2010 (2) SA 92 (CC) (2009 (10) BCLR 1046): referred to G

Stuttafords Stores (Pty) Ltd and Others v Salt of the Earth Creations (Pty) Ltd 2011 (1) SA 267 (CC): referred to

Veldman v Director of Public Prosecutions, Witwatersrand Local Division 2007 (3) SA 210 (CC) (2006 (2) SACR 319): referred to.

Case Information

An application by a bank for a home to be declared specially H executable; and applications by the bank's debtor for an extension of time within which to apply for rescission of the default judgment against it, and for such rescission. Court refusing the debtor's applications and granting the bank's application. (Paragraph [43] at 498I.)

D van Reenen for the plaintiff. I

D Rabie for the defendant.

Cur adv vult.

Postea (September 20). J

2013 (1) SA p484

Judgment

Binns-Ward J: A

[1] Two applications arising out of an action in which the plaintiff bank obtained default judgment against the defendant mortgagor as long ago as 6 May 2011 were heard together. One of them was an application by the bank for an order directing that the judgment could be executed B against the hypothecated immovable property. The other was brought by the defendant, in terms of rule 31(2)(b), for the rescission of the judgment. Both applications were opposed. It is appropriate to determine the defendant's application first because if it is successful the bank's application will be rendered redundant.

C [2] The requirements that an applicant for rescission of judgment in terms of rule 31(2)(b) must satisfy are well established: see eg Colyn v Tiger Food Industries Ltd t/a Meadow Feed Mills (Cape) 2003 (6) SA 1 (SCA) ([2003] 2 All SA 113), in para 11, and the other authority cited there. [1] The applicant must show good cause why the remedy should be D granted. That entails (a) giving a reasonable explanation of the default; (b) showing that the application is made bona fide; and (c) showing that there is a bona fide defence to the plaintiff's claim, which prima...