Nedbank Ltd v Fraser and Another and Four Other Cases
Jurisdiction | South Africa |
Judge | Peter AJ |
Judgment Date | 04 May 2011 |
Citation | 2011 (4) SA 363 (GSJ) |
Docket Number | 2011/00418, 2011/09315, 2010/28374, 2010/31703 and 2011/07117 |
Hearing Date | 28 April 2011 |
Counsel | D Strydom for the plaintiff in the Nedbank matters (case Nos 2011/00418, 2011/09315, 2010/28374 and 2010/31703). NN Felgate for the plaintiff in the Absa matter (case No 2011/07117). No appearances for the defendants. |
Court | South Gauteng High Court, Johannesburg |
Peter AJ:
B [1] The issues common to all five of these actions are the relevant circumstances to be considered by a court, and the procedure to be employed for the exercise of such consideration, in deciding whether or not to grant an order declaring immovable property specially executable. There are two actions in which application for default judgment is C sought and three in which summary judgment is sought.
[2] These issues arise by reason of a recent amendment to the provisions of rules 45 and 46 of the Uniform Rules of Court, and a more recent judgment of the Constitutional Court in Gundwana v Steko Development CC and Others 2011 (3) SA 608 (CC) (Gundwana). The amendment to D rules 45 and 46 are contained in GN R918 of 19 November 2010 and came into effect on 24 December 2010. The judgment of the Constitutional Court in Gundwana was handed down on 11 April 2011.
[3] In its amended form, rule 46(1)(a) reads as follows:
'(1)(a) No writ of execution against immovable property of any E judgment debtor shall issue until —
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
such immovable property shall have been declared specially F 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.'
G [4] The history and development of the provisions in rule 46(1) in the former Transvaal are set out in Gerber v Stolze and Others 1951 (2) SA 166 (T) (Gerber) and Nedbank Ltd v Mortinson 2005 (6) SA 462 (W) ([2006] 2 All SA 506) (Mortinson), and are summarised in Gundwana at para 37. In the old South African Republic an order of court was H required to have the immovable property declared executable. This was so where there was an attempt to execute against movable property and the movable property was insufficient to satisfy the judgment debt. In 1902, after annexation and in the first set of rules governing the colonial courts, this practice was continued except where, by judgment of the I court, the immovable property had been declared specially executable. At the end of 1903 the rules were changed and vested the registrar with the authority and discretion to issue a writ against immovable property where an attempt at execution against movable property indicated that the movable property was insufficient to satisfy the judgment debt. This procedure could be adopted by a judgment creditor in the absence of a J court order declaring the property specially executable. An order could
Peter AJ
be obtained declaring the immovable property specially executable at A judgment stage where the property was specially hypothecated for the debts in respect of which the money judgment was obtained. This was a shortcut to dispense with the requirement of executing first against movable property before having recourse to the immovable property — Gerber at 171 – 172. In 1991 an amendment took place to introduce s 27A B into the Supreme Court Act, 1959, and in 1994 an amendment was made to the Uniform Rules of Court in terms whereof rule 31(5) was introduced. The introduction of s 27A came into operation on 21 January 1994 in respect of all the High Courts, with the exception of the then Orange Free State Provincial Division. In that division the operation of C such section was delayed until 1 September 1995. In terms of s 27A the registrar was empowered to grant and enter judgment by default in the manner and circumstances prescribed by the uniform rules of court. Rule 31(5) regulated the manner and circumstances under which the registrar could grant default judgment and, until the most recent amendment, rule 46(1) made provision for the registrar to declare D immovable property specially executable at the time of judgment. Thus, from 1903 until 1994 execution could be levied against immovable property in one of two instances. The first was where the court declared such immovable property specially executable, and such orders were granted where the immovable property had been hypothecated for the debt in respect of which the money judgment was sought. The second E was where there was insufficient realisable movable property to satisfy the judgment, in which case the registrar could without judicial intervention cause a writ to be issued in respect of immovable property. Since 1994 execution could be levied against the immovable property in a third instance, namely where there had been an order declaring the property F specially executable by the registrar when granting a default judgment.
[5] In 2005, in Jaftha v Schoeman and Others; Van Rooyen v Stolz and Others 2005 (2) SA 140 (CC) (2005 (1) BCLR 78), the Constitutional Court held that s 66(1)(a) of the Magistrates' Courts Act 32 of 1944 G violated s 26(1) of the Constitution of the Republic of South Africa, 1996 (the Constitution). The violation was to the extent that the relevant statutory provision allowed execution against homes of indigent debtors where they lost security of tenure, on the basis that it did not provide for judicial oversight. The provisions of s 66(1)(a) provided for the issue by the clerk of the magistrates' court of a writ of execution H against immovable property where there was an insufficiency of movable property to satisfy the judgment debt. On the strength of Jaftha unsuccessful constitutional challenges to the registrar's competence were considered by the full court of this division in Mortinson and the Supreme Court of Appeal in Standard Bank of South Africa Ltd v Saunderson and Others I 2006 (2) SA 264 (SCA) (2006 (9) BCLR 1022; [2006] 2 All SA 382). In Mortinson, although the full court held that the registrar had the competence to declare specifically hypothecated immovable property executable, a rule of practice was laid down, in para 33, requiring an applicant for default judgment to file an affidavit simultaneously with such application setting forth the following averments: J
Peter AJ
A The amount of the arrears outstanding as at the date of the application for default judgment;
whether the immovable property which it is sought to have declared executable was acquired by means of or with assistance of a State subsidy;
B whether, to the knowledge of the creditor, the immovable property is occupied or not;
whether the immovable property is utilised for residential purposes or commercial purposes; and
C whether the debt which is sought to be enforced was incurred in order to acquire the immovable property sought to be declared executable or not.
[6] This rule of practice was calculated to alert the registrar and assist him or her in determining abuses and referring those applications for D consideration by the court. A further rule of practice was laid down that the warrant of execution presented to the registrar for issue was required to contain a note advising the debtor of the provisions of rule 31(5)(d), which provided for the right to set the matter down for reconsideration by the court.
E [7] In Saunderson in para 27 yet a further practice direction was issued requiring the defendant's attention to be drawn to the provisions of s 26(1) of the Constitution. The court defined the issue in Jaftha as not in terms of s 26(3) of the Constitution, but rather s 26(1). Section 26(3) was expressed to become relevant in the event of eviction consequent upon a sale in execution and thus was not an issue in Jaftha — Saunderson F in para 15.
[8] The relevant provisions of s 26 of the Constitution read as follows:
'(1) Everyone has the right to have access to adequate housing.
. . .
(3) No one may be evicted from their home, or have their home G demolished, without an order of court made after considering all the relevant circumstances. No legislation may permit arbitrary evictions.'
[9] The procedure whereby a person may be evicted from his or her home in consequence of execution of a judgment debt generally follows a sequential chain. A judgment or order is made, usually for the payment H of money; an order is made declaring the immovable property specially executable; a writ of execution is then issued and an attachment effected by service of the writ on the judgment debtor and the occupant of the property; a sale in execution is held; and thereafter registration of transfer is made pursuant to such sale. It is usually only after such I transfer that the new owner brings an application for eviction of the person concerned. Although s 26(3) of the Constitution requires judicial oversight for the eviction of a person from his or her home, the effect of the judgment in Gundwana — particularly para 41 — is that the execution process is equated with eviction for the purposes of s 26(3) that 'judicial oversight by a court of law of the execution process is a must'. This early J judicial interposition permits a mechanism to prevent abuse at an early
Peter AJ
stage before a bona fide purchaser and new owner seeks the eviction of A the incumbent at which later time circumstances are different and the scope to remedy a past abuse is much narrower than prior to attachment of the property.
[10] Gundwana was decided on the provisions of the rules prior to their amendment, although cognisance was taken of the amendment. It was B noted that the prospective effect of the order of constitutional invalidity might have been ameliorated by the amendment — paras 33 and 56.
[11] Rule 45 is the rule...
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