Gundwana v Steko Development and Others

• Jurisdiction: South Africa
• Judge: Moseneke DCJ, Cameron J, Froneman J, Jafta J, Khampepe J, Mogoeng J, Nkabinde J, Van Der Westhuizen J, Yacoob J and Mthiyane AJ
• Judgment Date: 11 April 2011
• Citation: 2011 (3) SA 608 (CC)
• Docket Number: CCT 44/10
• Hearing Date: 10 February 2011
• Counsel: A de Vos SC (with S Wilson) for the applicant. No appearance for the first respondent. AM Breitenbach SC (with K Pillay) for the second respondent. NA Cassim SC for the third respondent. G Budlender SC (with S Budlender and A Bodasing) for the amicus curiae.
• Court: Constitutional Court

Gundwana v Steko Development and Others
2011 (3) SA 608 (CC)

2011 (3) SA p608

Citation	2011 (3) SA 608 (CC)
Case No	CCT 44/10
Court	Constitutional Court
Judge	Moseneke DCJ, Cameron J, Froneman J, Jafta J, Khampepe J, Mogoeng J, Nkabinde J, Van Der Westhuizen J, Yacoob J and Mthiyane AJ
Heard	February 10, 2011
Judgment	April 11, 2011
Counsel	A de Vos SC (with S Wilson) for the applicant.; No appearance for the first respondent.; AM Breitenbach SC (with K Pillay) for the second respondent.; NA Cassim SC for the third respondent.; G Budlender SC (with S Budlender and A Bodasing) for the amicus curiae.

Flynote : Sleutelwoorde B

Execution — Sale in execution — Mortgaged immovable property — Sale of residential property for recovery of outstanding bond repayments — Constitutionality of procedure — Rules and practice which allow registrar to declare mortgaged property specially executable after default judgment on money C debt being unconstitutional for lack of judicial oversight — Bondholders who wish to execute on mortgage bond to approach court to show why sale of home justifiable — Constitution, s 26 read with Uniform Rules of Court, rules 31(5)(b) and 45(1).

Headnote : Kopnota

D Sale of homes in execution after judgment on money debt: constitutionality of current practice

Since it is established that execution may only follow upon judgment in a court of law, and that judicial oversight is required where execution is sought against the homes of indigent debtors after judgment on a money debt, the High Court rules and practice that allow registrars to grant orders declaring E such property specially executable are, bearing in mind the constitutionally entrenched right to housing, unconstitutional. Bondholders who wish to execute on a mortgage bond must first approach a court of law for it to make a proper determination as to whether the sale in execution of a person's home is justifiable in the circumstances of the case. (Paragraphs [41], [49] – [50], [53] at 623E – F, 625D – G and 626C – E.)

F Order

It is unconstitutional for a registrar to declare immovable property specially executable when ordering default judgment under rule 31(5) of the Uniform Rules of Court to the extent that this permits the sale in execution G of a person's home. (Paragraph [65] at 629G.)

Effect

The judgments in Nedbank Ltd v Mortinson 2005 (6) SA 462 (W) ([2006] 2 All SA 506); and Standard Bank of South Africa Ltd v Saunderson and Others 2006 (2) SA 264 (SCA) (2006 (9) BCLR 1022; [2006] 2 All SA 382) are H overruled, to the extent that they held that a registrar is constitutionally competent to make execution orders when granting default judgment in terms of rule 31(5)(b). (Paragraph [52] at 625I – 626A.)

Relief and retrospectivity

Persons affected by the above ruling have to approach the courts to have affected I sales and transfers set aside. Aggrieved debtors will have to show — in addition to the normal requirements for rescission — that a court, with full knowledge of all the relevant facts existing at the time of the granting of default judgment, would nevertheless have refused leave to execute against the debtor's home. After this the question of the effect of invalid execution sales and subsequent transfers will have to be considered in the light of the J applicable principles. (Paragraphs [58] – [60] at 627F – 628F.)

2011 (3) SA p609

Note on impact of amendment of rule 46(1) A

The prospective effect of the order has been overtaken by the amendment, effective from 24 December 2010, of rule 46(1) of the Uniform Rules, which now provides that:

'(1)(a) No writ of execution against the immovable property of any judgment debtor shall issue until — B

(i)

a return shall have been made of any process which may have been issued against the movable property of the judgment debtor from which it appears that the said person has not sufficient movable property to satisfy the writ; or

(ii)

such immovable property shall have been declared to be specially C executable by the court or, in the case of a judgment granted in terms of rule 31(5), by the registrar: Provided that, where the property sought to be attached is the primary residence of the judgment debtor, no writ shall issue unless the court, having considered all the relevant circumstances, orders execution against such property.' (Paragraph [56] at 627B – E.)

Cases Considered

Annotations: D

Reported cases

AAA Investments (Pty) Ltd v Micro Finance Regulatory Council and Another2007 (1) SA 343 (CC) (2006 (11) BCLR 1255): referred to

Absa Bank Ltd v Ntsane and Another2007 (3) SA 554 (T): referred to

Bannatyne v Bannatyne (Commission for Gender Equality, as Amicus Curiae) E 2003 (2) SA 363 (CC) (2003 (2) BCLR 111): referred to

Bock and Others v Duburoro Investments (Pty) Ltd2004 (2) SA 242 (SCA) ([2003] 4 All SA 103): referred to

Campbell v Botha and Others2009 (1) SA 238 (SCA): referred to

Campus Law Clinic, University of KwaZulu-Natal v Standard Bank of South Africa Ltd and Another F 2006 (6) SA 103 (CC) (2006 (6) BCLR 669): distinguished

Chetty v Law Society, Transvaal1985 (2) SA 756 (A): referred to

Chief Lesapo v North West Agricultural Bank and Another2000 (1) SA 409 (CC) (1999 (12) BCLR 1420): dicta in paras [15] – [16] applied

Christian Education South Africa v Minister of Education1999 (2) SA 83 (CC) (1998 (12) BCLR 1449): referred to G

De Wet and Others v Western Bank Ltd1979 (2) SA 1031 (A): referred to

Executive Council, Western Cape Legislature, and Others v President of the Republic of South Africa and Others1995 (4) SA 877 (CC) (1995 (10) BCLR 1289): referred to

Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and Others1996 (1) SA 984 (CC) (1996 (1) BCLR 1): referred to H

First National Bank of South Africa Ltd v Land and Agricultural Bank of South Africa and Others; Sheard v Land and Agricultural Bank of South Africa and Another2000 (3) SA 626 (CC) (2000 (8) BCLR 876): referred to

Garlick Ltd v Phillips1949 (1) SA 121 (A): referred to

Gerber v Stolze and Others1951 (2) SA 166 (T): referred to I

Grant v Plumbers (Pty) Ltd1949 (2) SA 470 (O): referred to

Jaftha v Schoeman and Others; Van Rooyen v Stoltz and Others2005 (2) SA 140 (CC) (2005 (1) BCLR 78): discussed and applied

Juglal NO and Another v Shoprite Checkers (Pty) Ltd t/a OK Franchise Division2004 (5) SA 248 (SCA) ([2004] 2 All SA 268): referred to

Luitingh v Minister of Defence1996 (2) SA 909 (CC) (1996 (4) BCLR 581): referred to J

2011 (3) SA p610

MEC for Education, KwaZulu-Natal, and Others v Pillay2008 (1) SA 474 (CC) (2008 (2) BCLR 99): referred to A

Menqa and Another v Markom and Others2008 (2) SA 120 (SCA): referred to

Midi Television (Pty) Ltd t/a E-TV v Director of Public Prosecutions (Western Cape)2007 (5) SA 540 (SCA) (2007 (9) BCLR 958): referred to

Mkhize v Umvoti Municipality and Others2010 (4) SA 509 (KZP): referred to B

Mvumvu and Others v Minister of Transport and Another2011 (2) SA 473 (CC): referred to

National Coalition for Gay and Lesbian Equality and Another v Minister of Justice and Others1999 (1) SA 6 (CC) (1998 (2) SACR 556; 1998 (12) BCLR 1517): referred to

Nedbank Ltd v Mashiya and Another2006 (4) SA 422 (T): referred to

Nedbank Ltd v Mortinson2005 (6) SA 462 (W) ([2006] 2 All SA 506): overruled C

Oudekraal Estates (Pty) Ltd v City of Cape Town and Others2004 (6) SA 222 (SCA) ([2004] 3 All SA 1): referred to

Prince v President, Cape Law Society, and Others2002 (2) SA 794 (CC) (2002 (1) SACR 431; 2002 (3) BCLR 231): referred to

Prophet v National Director of Public Prosecutions2007 (6) SA 169 (CC) (2006 (2) SACR 525; 2007 (2) BCLR 140): referred to D

Radio Pretoria v Chairperson, Independent Communications Authority of South Africa, and Another2005 (4) SA 319 (CC) (2005 (3) BCLR 231): referred to

Rail Commuters Action Group and Others v Transnet Ltd t/a Metrorail and Others2005 (2) SA 359 (CC) (2005 (4) BCLR 301): referred to E

S v Lawrence; S v Negal; S v Solberg1997 (4) SA 1176 (CC) (1997 (2) SACR 540; 1997 (10) BCLR 1348): referred to

S v Mbatha; S v Prinsloo1996 (2) SA 464 (CC) (1996 (1) SACR 371; 1996 (3) BCLR 293): referred to

S v Shaik and Others2008 (2) SA 208 (CC) (2008 (1) SACR 1; 2007 (12) BCLR 1360): referred to F

S v Zuma and Others1995 (2) SA 642 (CC) (1995 (1) SACR 568; 1995 (4) BCLR 401): referred to

SA Bank of Athens Ltd v Van Zyl2005 (5) SA 93 (SCA): referred to

Standard Bank of SA Ltd v Snyders and Eight Similar Cases2005 (5) SA 610 (C) ([2006] 2 All SA 537): referred to

Standard Bank of South Africa Ltd v Adams2007 (1) SA 598 (C): referred to G

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 Others2006 (2) SA 264 (SCA) (2006 (9) BCLR 1022; [2006] 2 All SA 382): overruled

Transvaal Agricultural Union v Minister of Land Affairs and Another1997 (2) SA 621 (CC) (1996 (12) BCLR 1573): referred to H

Van der Merwe v Road Accident Fund and Another (Women's Legal Centre Trust as Amicus Curiae)2006 (4) SA 230 (CC) (2006 (6) BCLR 682): referred to.

Unreported cases I

Bengwenyama Minerals (Pty) Ltd and Others v Genorah Resources (Pty) Ltd and Others (CC case No CCT 39/10, 13 November 2010) ([2010] ZACC 26): referred to

Kanana and Another v Nebank Ltd and Others (CC case No CCT 91/10): J referred to

2011 (3) SA p611

Statutes Considered

Statutes A

The Constitution of the Republic of South Africa, 1996, s 26(1): see Juta's Statutes of South Africa 2009/10 vol 5 at 1-37.

Rules Considered

Rules of court B

The Uniform Rules of Court, rules 31(5)(b) and 45(1): see The Supreme Court Act and the Magistrates' Courts Act and Rules (Juta...