SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy	
REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA

(1)	REPORTABLE: YES / NO
(2)	OF INTEREST TO OTHER JUDGES: YES/NO
(3)	REVISED. 

     ______________________	______________________
     DATE			        	SIGNATURE

                                               
                                                                                   		 
Case No:  69492/2017
20/6/2019

In the matter between:	

SIKANDER MAHOMED					           		APPLICANT
(Id. No.: [….])

and

THE STANDARD BANK OF SOUTH AFRICA LTD          	         1ST  RESPONDENT
(Reg. No.: 1962/000738/06)

SHERIFF PRETORIA SOUTH AFRICA			          2ND RESPONDENT

JUDGMENT

G JACOBS (AJ)
[1]	Applicant, seeks in its Notice of Motion, a rescission of Judgment granted against 	him in case number 69492/2017, in this Honourable Court on 14 March 2018.  
	
[2]	The Applicant further seeks condonation for the late filing of the Application for 	Rescission and further seeks that the Warrant of Execution and the Notice of 	Attachment, issued pursuant to the Judgment be set aside.

[3]	The Applicant did not file Heads of Argument, in terms of the Practice Directive 	and also did not pursue the Application after it became opposed by the First 	Respondent (hereafter “Standard Bank”).

[4]	Standard Bank set the matter down on the opposed roll and the matter was 	allocated for argument. 

[5]	On the date that the matter was set down, the legal representative on behalf of 	the Applicant approached the Court with a Condonation Application explaining 	the failure to file Heads of Argument and requested the Court to accept the 	Heads of Argument, at that stage. 

[6]	The late Heads were canvassed with the representative on behalf of Standard 	Bank and as no objection was raised. The Applicant further tendered the wasted 	costs for 3 June 2019 and the matter stood down to 4 June 2019 for argument 	and in order to give me the opportunity to consider the arguments set out in the 	Heads.

[7]	At that stage, I indicated that the scale of costs should be reserved and shall be 	dealt with at the argument stage.

[8]	It is not clear, in terms of the Notice of Motion, read with the Founding Affidavit, 	whether the Application is brought in terms of Rule 31(2)(b), or the common law. 	However, in the Heads of Argument, the Applicant insisted that the Application 	was brought in terms of Rule 31(2)(b), the common law, as well as Rule 42(1)(a).
[9]	On the papers, I am of the view that Rule 42(1)(a) does not apply and will 	consider the rescission on the basis of Rule 31(2)(b) and the common law.

[10]	In terms of Rule 31(2)(b): 

	“A defendant may within twenty days after he or she has knowledge of such 	judgment apply to court upon notice to the plaintiff to set aside the judgment and 	the court may, upon good cause shown, set aside the default judgment, on such 	terms 	as it seems meet.”

[11]	In terms of the common law, as set out in Promedia Drukkers en Uitgewers 	(Edms) Bpk) v Kaimowitz and Others 1996 (4) SA 411 (CPD) at 417, the Court 	has a discretion to grant a rescission of judgment where sufficient or good cause 	has been shown. 

[12]	The two essential elements of sufficient cause for rescission of judgment is set 	out in Chetty v Law Society of Transvaal 1985 (2) SA 756 (A) at 765 B – C 	and are the following:

	12.1	The party seeking relief must present a reasonable and acceptable 				explanation for his or her default.

	12.2	On the merits, such party shall disclose a bona fide defence, which prima 			facie carry some prospects of success.

[13]	This is also echoed in Herbstein and Van Winsen – The Civil Practice of the 	High 	Courts of South Africa, Fifth Edition at 938 to 939. The learned 	authors, inter alia relying on Silber v Ozen Wholesalers (Pty) Ltd 1954 (2) SA 	345 (A), state that the phrases “good cause” and “sufficient cause” are 	synonymous and interchangeable. The learned authors further state that the 	Court, when asked to grant an order for rescission, under Rule 31(2)(b) exercise 	a discretion in doing so and that, that discretion shall be exercised judicially. See 	the authorities quoted in footnotes 173 and 174 therein.

[14]	The bank opposed the Application on both the elements (the explanation for the 	default as well as whether the Applicant disclosed a bona fide defence) in a 	comprehensive Opposing Affidavit, the relevant portions thereof will be dealt with 	infra.

[15]	As to whether the Applicant was in default and wilful default, I have considered all 	the allegations made by the Applicant, together with the referral to 	correspondence and telephonic discussions that took place between Standard 	Bank and the Applicant, prior to Summons being issued. I cannot find, on the 	papers, that the Applicant was in wilful default and the enquiry in this case will 	then proceed to whether the Applicant disclosed a bona fide defence, which 	prima facie, carry some prospects of success.
[16]	Similarly, if the Application is considered in terms of Rule 31(2)(b), the 	Application was brought outside of the twenty days provided for in the Rule. 	Again, the explanation for the delay since the Applicant became aware of the 	Judgment and the issue of the Application is in my view adequately explained 	and the Court condones the late bringing of the Application in terms of the Rule. 

[17]	If the Application is brought in terms of the common law then the Application, in 	my view, was brought within a reasonable time.
	
[18]	THE APPLICANT’S DEFENCE:

	18.1	The Applicant states in his Founding Affidavit that when he applied for the 			loan in 2008, he was 62 years old, employed by Micom and was due to 			retire at the age of 65. He further states that at the time, he did not 				contribute to any formal pension fund and his primary source of income 			was derived from his employment (Micom), described above.

	18.2	He further stated that his primary asset was the immovable property (Erf 			319 Laudium, Pretoria). I pause here to mention that the Respondent 			showed that this is the same property for which the loan was granted and 			in essence, the Applicant bought the property from this close corporation, 			of which he was the only member and he held 100% members interest. 

	18.3	The Applicant alleges that to the best of his knowledge and recollection, 			the loan was granted without a credible affordability test being conducted. 			He further states that Standard Bank failed to take into account that his 			income was not reliable, consistent and sustainable, taking into account 			that he was only three years away from retirement and he had no sizable 			pension pay-out to speak of.

	18.4	Applicant further alleges that Standard Bank failed to take into account his 		age and the fact that he would be 82 years of age when the last payments 		that were due, in terms of the loan, had to be paid.

	18.5	He further alleges that Standard Bank failed to take into account his past 			credit history and exposure to credit.

	18.6	As to the allegation that no credible affordability test has been conducted, 			it is important to note that the Affordability Assessment Regulations 				published in Government Gazette No.: 38557 on 13 March 2015, was not 			yet published and is not be applicable to this case. 

	18.7	The Respondent, in the Opposing Affidavit, fully sets out the measures it 			took and the factors it considered, more specifically with regards to the 			affordability of the loan and I am satisfied that Standard Bank, at the time 			that the loan was granted (2008), properly considered the question 				whether the Applicant could afford to repay the loan.
	18.8	This is confirmed by the facts of this matter that, on the undisputed version 		of the Applicant, he was able to service the loan and make repayments up 		to approximately 2016 (ie. 8 years after the loan was granted).

	18.9	As to the allegation by the Applicant that Standard Bank failed to take into 			account his past credit history, Standard Bank, in its opposing papers, 			annexed the necessary credit bureau history that were done in 2008, 			when the loan was applied for. Again, this allegation by the Applicant is 			not sustainable and does not, in my view, amount to a bona fide defence. 

	18.10	The aspect that remained and which was extensively argued by both 			parties, was the age of the Applicant, at the time when he applied for the 			loan (62 years of age). Further, directly relevant to this, was the source of 			income of the Applicant at that stage and the allegation that he had no 			sizable pension of any nature.

	18.11	In this regard, Standard Bank drew my attention to Section 61 of the 			National Credit Act (Act 34 of 2005) (hereafter “the Credit Act”) which 			specifically protects a consumer or prospective consumer against 				discrimination, as set out in Section 9(3) of the 1996 Constitution. 				Relevant for purposes of this Application, Standard Bank should not 			discriminate against a consumer or prospective consumer on the basis of 			age.

	18.12	In the National Credit Act (Sections 80 and 81), the legislator deals with 			reckless credit and prevention of reckless credit, the relevant sections will 			not be quoted verbatim herein.

	18.13	On the papers, and in argument, it was never contended that the Applicant 		could not afford to repay the loan, at the stage when the credit was 				granted. The long term sustainability and affordability, due to his age was 			the contentious issue before this Court.

	18.14	Standard Bank also, in its papers, Heads of Argument and argument 			before this Court, alluded me to Section 81(4), which reads as follows:

		“For all purposes of this Act, it is a complete defence to an allegation that 			a credit agreement is reckless if –

		(a)	the credit provider establishes that the consumer failed to fully and 				truthfully answer any requests for information made by the credit 				provider as part of the assessment required by this section…”

 	18.15	In this regard, my attention was drawn to the two application forms which 			formed part of the credit application that were completed and signed by 			the Applicant when he applied for the loan. Standard Bank argued that the 		Applicant did not truthfully disclose his occupation in that the averment in 			his Founding Affidavit is contradicted by the credit applications, the latter 			stating that he was self-employed as a sole proprietor. 

	18.16	The Applicant attempted to rectify this in his Replying Affidavit but merely 			added to the confusion. In his Replying Affidavit, he stated that he was not 		only self-employed but he was also employed as alleged in his Founding 			Affidavit. Nowhere in the application for credit and the information supplied 		by the Applicant, did he disclose to Standard Bank that he was indeed due 		to retire (as he alleges now in his papers), at the alleged age of 65. In my 			view, this non-disclosure, does have a material effect on the long term 			sustainability of the Applicant’s ability to repay the loan. To the contrary, 			the Applicant states in his credit application that he is self-employed, the 			reasonable inference therefrom is that he is a businessman and that there 			is no formal retirement age.

	18.17	Another factor that the Court has to take into account, when exercising is 			discretion whether to grant a rescission or not is the fact that the Applicant, 		in essence, by purchasing the property from the close corporation, of 			which he was the sole member, at that stage raised capital of 1.5 Million 			Rand, on a property which he already owned through the close 				corporation and occupied, as set out in his Founding Affidavit. Nowhere is 			it explained what happened to the proceeds received by the close 				corporation, of which he as the sole member.

	18.18	In the circumstances, I find that on the Applicant’s papers in this 				Application, read with his application for credit in 2008 there was a 				material non-disclosure of fact, facts that in all probability would have 			influenced Standard Bank’s decision to grant the loan or not.

[19]	In the premises, and in terms of Section 81(4)(a), Standard Bank has a complete 	defence, against the allegation of reckless credit.

[20]	Even if I am wrong in the aforesaid conclusion, on a proper conspectus of the 	information provided by Standard Bank in its Opposing Affidavit, the original 	credit application and ancillary documents, even if the Applicant was 62 years 	old, the conduct of Standard Bank cannot be construed as reckless.

[21]	In my view, a proper consideration of all the facts, including the fact that he was a 	sole proprietor, had business interests and a significant disposable income, at 	that stage, was taken into account when the loan was granted. If these facts are 	to be compared, it is in stark contrast with the matter of Absa Bank Ltd v De 	Beer and 2 Others 2016 (3) SA 432 GP, where money was lent and advanced 	to pensioners and as the Court therein found, was actually money thrown into a 	bottomless pit.

[22]	In the premises, I am of the view that the Applicant, in this Application, failed to 	establish that he has a bona fide defence, more specifically a defence that 	Standard Bank granted the credit recklessly and therefore, the Application for 	rescission, in my view, should not succeed.

[23]	In making this finding, I have duly considered all the authorities referred to in the 	Applicant’s list of authorities that were included in the Heads of Argument.

[24]	This brings me to the counter Application by Standard Bank. In this counter 	Application, Standard Bank seeks that the property described as Erf 319 	Laudium Township, held by Deed of Transfer No.: T120724/20078 (hereafter “the 	property”) to be declared specifically executable.

[25]	The Applicant answers to this Application in paragraphs 133 and further of its 	Replying Affidavit. The first point he raises is a point in limine and the allegation 	that the Applicants cannot proceed with the relief as a result of the Judge 	President’s Practice Directive 2 of 2018, where all foreclosure matters were 	postponed sine die, pending a decision of the Full Bench.

[26]	This point has become moot when the Full Bench considered the approach in 	foreclosure matters, in Absa Bank Ltd v Mokebe and related cases 2018 (6) 	SA 492 (GJ). Therefore, the point in limine cannot be upheld.

[27]	In considering Standard Bank’s request that the property be declared specifically 	executable, this Court has to consider the approach set out in Firstrand Bank 	Ltd v Folscher and Another, and similar matters 2011 (4) SA 314 (GNP) 	where the Full Bench of this Division set out the principles that should be applied 	in cases like these and further weighing the interests of the debtor against the 	interests of the bank.

[28]	In the present case, the Applicant has a duty to fully disclose, and is in the best 	position to fully inform the Court of any aspect that should be taken into account. 	See: paragraph 42 of the Folscher Judgment at page 333. 

[29]	The Applicant merely states:

	“In lieu of the fact that there is no real proceeds to be realised from the sale, it will 	mean that we cannot buy another home.”

	He further states:

	“I also do not have financial means to pay rentals.”

	He further states:

	“As a result, we will have no residence and proper housing.”

[30]	With the aforesaid in mind, he lists in paragraph 139, a number of persons 	(family) who resides in the property but does not explain how, in light of his 	financial position, he is able to provide for them or that he indeed does provide 	for them. The list of persons also does not include any explanation as to their 	rights to reside on the property and stay in his home. The mere fact that a person 	or persons reside in the home of another does not necessarily give them a right 	in law to remain there.

[31]	The fundamental right to housing and its limitations is fully set out in the Folscher 	Judgment at paragraph 11 to 17 and has to be considered by this Court. The 	Applicant, unfortunately, does not set out any grounds or sufficient information on 	which the Court can find that there is any alternative to declaring the property 	executable.

[32]	Standard Bank, on the other side, provided a loan to the Applicant, in essence 	raising further finance on a property which he already occupied (albeit through a 	close corporation) and as security for that loan, caused a bond to be registered 	over the said property. If the said bond was not provided, the loan would not have 	been granted to the Applicant.

[33]	The Applicant had the benefit of the loan since 2008, fell in arrears, and on his 	own version cannot enter into any alternative arrangement with the bank to 	prevent the property from being declared executable. The Applicant further does 	not propose any alternative, save to state that he cannot afford to obtain 	alternative housing, without taking the Court into his confidence and supplying 	any details.

[34]	In the present case, I deem it necessary to hold the Applicant to the original 	terms of the loan agreement, more specifically that he furnish as security for the 	said loan, the property which he now occupies.

[35]	In the premises, the Court is satisfied that the property should be declared 	executable.

[36]	In terms of the Absa Bank v Mokebe matter supra, the Court has a discretion to 	determine a reserve price. See: paragraph 51 of that Judgment at page 515 and 	further. The determination of a reserve price is to be considered on the merits of 	each case and I canvased this aspect with both parties in argument.

[37]	Standard Bank, in its opposing papers, annexed a valuation determining a 	market value of between 1.7 Million Rand and 1.95 Million Rand, with a forced 	sale value of R1.4 Million Rand. The municipal value of the property, is allegedly 	R870 000.00.

[38]	In the present case, considering all the facts, I am of the view that to set the 	reserve price at 1.4 Million Rand (being the forced sale value as determined by 	Standard Bank, which is not disputed by the Applicant), would protect the 	interests of all the parties.

[39]	If the reserve price is too high, then Standard Bank might have difficulty to 	dispose of the property and will have to approach the Court at a later stage, to 	reduce the reserve price, only incurring further costs. A forced sale value is, 	almost without exception, used in this Court in sequestration proceedings and in	voluntary surrender of estates and I see no reason why that same principle 	should not be applied when a reserve price, in matters like these, have to be set.

[40]	Unfortunately, as the enforcement of a reserve price is a relatively new 	development in our Courts, there is very little direction, if any, in the case law as 	to the approach that should be adopted.

[41]	This brings me to the question of costs. The loan agreement between the 	Applicant and Standard Bank provides for attorney and client costs and I see no 	reason why, if Standard Bank is successful in its opposition of Applicant’s 	Application, and if Standard Bank is successful in its counter Application, why I 	should deviate from that. I only have to include that the costs of 3 June 2019 	that was occasioned by the late filing of Heads of Argument, on behalf of the 	Applicant, should also be on an attorney and client scale.

[42]	In the premises, I make the following order:

	42.1	The Applicant’s claim is dismissed.

	42.2	The Applicant is to pay the costs of the Application, including the wasted 			costs of 3 June 2019, on a scale as between attorney and client.

	42.3	The property known as Erf 319 Laudium Township, Registration Division 			JR, Province of Gauteng, (“the property”) held by Deed of Transfer No.: 			T120724/2008, is declared specifically executable.

	42.4	The Registrar of the above Honourable Court is authorised to issue a Writ 			of Execution in respect of the property.

	42.5	The property is to be sold in execution, subject to a reserve price of 1.4 			Million Rand.

	42.6	The Applicant is to pay the costs of Respondent’s counter Application, on 			a scale as between attorney and client.

__________________________________
G JACOBS
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA

APPEARANCES:

For the applicant:	Mr Pillay 
From Pillay Thesigan Inc
			PRETORIA

For the respondent:	Adv Reyneke M
			Instructed by Ramsay Webber Attorneys
			JOHANNESBURG