(Gauteng Division: Pretoria) Case Number
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1 SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy IN THE HIGH COURT OF SOUTH AFRICA (GAUTENG DIVISION: PRETORIA) CASE NUMBER: 21841/14 In the matter between: VINCENT DE PAUL ALBERT FIRST APPLICANT (l.D. .………) MARINA RADEVA NAYDENOVA SECOND APPLICANT (l.D. ………) and STANDARD BANK OF SOUTH AFRICA LIMITED RESPONDENT JUDGMENT TLHAPI J [1] This is an application for the rescission of a default judgement in the above matter which was granted on 22 May 2014. The applicants were ordered to pay the full outstanding amount of R 1 047 284.51 plus interest thereon and the immovable property situated at 15 Orlando Street, Kensington, Johannesburg, which was their primary residence, was declared immediately executable. [2] Summons was issued on 14 March 2014. The return of service recorded that service was effected on 20 March 2014 at about 11h00 by affixing to the principal door at the domiciLium citandi et executandi. The arrears amounted to R 69 510 and the monthly 2 instalment on the loan was RS 967.47. Default judgment was taken on 22 May 2014 and applicants learnt of it for the first time on 23 May 2014 on a follow up call to the respondent's attorneys. The applicants averred that a copy of the judgement in the form of a draft order was obtained from the respondent's attorneys on 5 June 2014. This application was launched within the stipulated time on 19 June 2014. [3] The defence raised by the applicants was that their failure to defend the action was not wilful or due to their gross negligence. They alleged that they never received personal service of the summons and were not aware that legal proceedings had been instituted against them. The respondent sent a section 129 notice issued in terms of the National Credit Act 34 of 2005, by registered post and the first notification by the Post Office to the applicants of a registered item was given on 26 February 2014. The applicants admitted receipt of the section 129 notice and in response thereto they contacted the respondent's attorneys on 19 March 2014 and it was arranged with them that the property be placed on the market. The property was placed by the attorneys on the respondent's Easy-Sell programme. At the time of these negotiations the attorneys had failed to inform applicants that summons had already been issued. [4] The applicants contended that the summons were vague and embarrassing and therefore excepiable, in that it did not contain the necessary averments required at law when execution against a primary residence was sought. The applicants further contended that the respondent did not comply with its obligations under section 81(2) of the National Credit Act in that they failed to conduct the peremptory pre-assessment in order to establish whether they were in a position to afford repayments on the loan. A substantial amount earned by the first applicant at the time constituted payment for overtime. Having regard to what their income was, the grant of the loan constituted a reckless credit as defined in section 80 of the National Credit Act. Therefore the declaration that their immovable property was immediately executable denied them the right to adequate housing for themselves and their children. 3 They had become over indebted since the first applicant had lost his job in 2011. The second applicant was now the main breadwinner. Prior to them falling into arrears they had regularly made payment on the mortgage bond for a period of five years [5] The respondent contended that service of the summons was on the domicile address, that the applicant had failed to make out a case as to why they would not have received the summons. Furthermore, that personal service was not a requirement for a default judgement. It was contended that applicants had failed in the founding affidavit to state grounds upon which it was contended that the summons did not comply with the relevant case law in foreclosure matters. The applicants had been duly notified of the status of their account and their rights in terms of section 129 of the National Credit Act. The respondent contended that the defences raised by the second applicant were an afterthought because they did not accord with the declaration they made when the mortgage agreement was concluded. According to the respondent the default judgement bundle which was before the court when default judgement was sought would only be placed before the court when this application was heard. Reference to the contents of the default judgment bundle would be referred to as they were presented to the Court in that bundle. The contents of the application for default judgment were not attached to the answering affidavit.. [6] The respondent annexed a letter from the second applicant in which she had admitted their ability to pay the monthly instalments and had proposed an arrangement to pay the arrears. It was further contended that when the application for the loan was considered by the respondent the first applicant had stated a basic monthly salary of R44 164.24 per month and that the loan application was assessed on the joint income of the applicants. The second applicant had agreed to be jointly and severally liable with the first applicant for the principal debt. The respondent contended that it found it odd that the second applicant who was in possession of an LLB degree and was a candidate attorney could argue that she did not appreciate the risks associated with the loan agreement. 4 [7] In reply the applicants contended that the default judgment affidavit was not among copies retrieved from the court file, hence their averment in the founding affidavit that the respondents had failed in the summons to make the necessary allegations regarding their Constitutional rights. The applicants persisted in their contention that they were not properly assessed when the loan was initially granted. They annexed salary slips which reflected what the first applicant's monthly remuneration was at the time, how it was augmented by overtime. [8] At this hearing Ms Oosthuizen for the respondent sought to make available to the court the affidavit allegedly presented when the default judgment application was heard. Mr Velten for the applicant objected to the handing in of the affidavit from the bar. In the answering affidavit the respondent undertook to make available the default judgment bundle and not just the affidavit. I am not persuaded that there was absolutely no affidavit or factors placed before the court when the order was granted by Barn J. However, I upheld the objection because it is my view that the default judgment bundle should have been annexed to the answering affidavit in order to establish what was before the court then and in order to give the applicants an opportunity to deal therewith in reply. There was no explanation in the answering papers why the bundle was not available. The acceptance at this stage of the affidavit would equate to an ambush during this hearing as to what factors were before the court when the default application was heard. The applicants alleged that the affidavit was not on the court file when copies of the court file were obtained in their preparation of this application. In my view, the absence of the default judgement bundle is good reason why the default judgement should be rescinded because I do not wish to second guess which factors were before Barn J when the order was granted on 22 May 2014. In her heads of argument Ms Oosthuizen has contended that several paragraphs be struck out. I have decided not to deal with this aspect because the issue around section 5 81(2) of the National Credit Act are issues that must be ventilated during trial. [9] Mr Velten submitted that the judgement had to be rescinded on various grounds. He contended that the explanation for the default was reasonable. They were not made aware that respondent had issued summons and intended taking judgment when they responded to the section 129 notice. Alternatively the summons was premature in that they still had opportunity to exercise their rights under section 129 of the National Credit Act. It is my view that the least the attorneys could have done was to have informed the applicants that summons had been issued and forwarded to the Sheriff for service upon them instead of negotiating with them to place their property on the market. [10] It was further contended that the Johannesburg High Court was situated within 8 kilometres from the applicant's home, that the respondent issued summons out of the Pretoria High Court in order to avoid the 'onerous conditions relating to foreclosure on domestic properties that have been stipulated for in the practice directives applicable in the Johannesburg High Court'. I can only comment that the high volume of cases in the Pretoria court is indicative of a preference for this court. I am however not prepared to endorse such inference because the Johannesburg and Pretoria Courts have concurrent jurisdiction and the respondent was within its right to choose the Pretoria court. However in the interests of a proper administration of justice to litigants, the fact that there was one Judge President for both divisions it was necessary to have uniformity in both courts as to the application of the practice directives relating to foreclosure matters. The courts are confronted daily with different narrations on the returns of service on the domicilium citandi et executandi : 'found gates locked affixed to the gated'; affixed to the main entrance or main gate'; 'under a stone'; 'in the post box'; 'to the principal door'; 'the occupant does not know the defendant, he/she refused to accept service of process I left it at the main gate'; It is also a concern to me that service at the domicilium always takes place during the day and probably during working hours.