IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
CASE NO: CCT 44/2010 In the matter between:
ELSIE GUNDWANA Applicant
and
STEKO DEVELOPMENT CC First Respondent
NEDCOR BANK LIMITED Second Respondent
MINISTER OF JUSTICE AND
CONSTITUTIONAL DEVELOPMENT Third Respondent
SUBMISSIONS ON BEHALF OF THE THIRD RESPONDENT
INDEX
No DISCRIPTION PAGE NUMBERS
1. INTRODUCTION ………….... 1
2. STRUCTURE OF SUBMISSIONS ………….... 1 – 2 3. APPLICANT’S RELIEF SOUGHT AS PER THE
NOTICE OF MOTION Part A
Part B Part C
………….... 2 – 3
………….... 3
………….... 3 – 5 4. CHRONOLOGICAL SEQUENCING OF THE
FACTS OF THE APPLICATION RESPONDENT’S SUBMISSIONS
The mortgage bond
Second respondent’s action against applicant Default judgment
Writ of attachment Sale in execution Eviction applications
Appeal against eviction order Outcome of appeal
Rescission application against default judgment
………….... 6
………….... 6 – 7
………….... 7
………….... 7 – 8
………….... 8
………….... 8 – 9
………….... 9 – 10
………….... 10
………….... 10 – 11 5. THIRD RESPONDENT’S SUBMISSIONS
Application for leave to appeal Appeals to the Constitutional Court
Applicant’s case in comparison with the interests
………….... 11 – 12
………….... 12 – 14
of justice requirement
Application for postponement
Application for direct access (in the alternative)
Applications for direct access
Applicant’s case in comparison with the requirement for compelling reasons
………….... 14
………….... 15 – 16
………….... 16
6. CONSTITUTIONAL VALIDITY OF SECTION 27A OF THE ACT, AS READ WITH, RULE 31(5)(a) OF THE UNIFORM RULES
Powers of the registrar in terms of rule 31(5)(a) of the Uniform Rules
Applicant’s reliance on Jaftha – judgment
………….... 17 – 18
………….... 18 – 19
7. CONCLUSION ………….... 20
INTRODUCTION
1. These submissions are filed on behalf of the third respondent, the Minister of Justice and Constitutional Development.
2. These submissions are filed on behalf of the third respondent for the assistance of this Honourable Court although the application is not opposed by the third respondent.
Furthermore, third respondent elected not file any affidavit in respect of the application but rather elected to present these submissions.
3. Third respondent had the opportunity to consider the affidavits filed of both the applicant and the first and second respondents. Third respondent will, in passing, refer to the facts as set out by these parties in their affidavits.
STRUCTURE OF SUBMISSIONS
4. These submissions will take the following format:
i) Firstly, the relief claimed by the applicant in her notice of motion will be setout.
ii) Secondly, a chronological sequencing of the facts of the application will be setout.
iii) Thirdly, the third respondent will present submissions discussing the shortcomings in the relief sought, by the applicant, for the assistance of this Honourable Court.
iv) Lastly, the constitutional invalidity of section 27A of the Supreme Court Act, 59 of 1959 (“the Act”), as read with, rule 31(5)(a) of the Uniform
Rules will be discussed as far as it relates to applicant’s case.
APPLICANT’S RELIEF SOUGHT AS PER THE NOTICE OF MOTION
5. Applicant approaches this Honourable Court for the following orders in the following terms:
1) Applicant’s application for leave to appeal to this Honourable Court, against the judgment and order handed down by the High Court of South Africa (Western Cape, Cape Town), on 27 February 2009 in the matter between
Part A:
Gundwana v Steko Development CC, case number A 379/2008, be postponed sine die, pending the outcome of an application for rescission of the judgment, which rescission application is currently pending before the High Court of South Africa (Western Cape, Cape Town) in the matter between Gundwana v Nedcor Bank Limited &
others, under case number 8299/03.
2) The costs of the application to be the costs in the appeal.
1) That applicant be granted leave to appeal to this Honourable Court against the judgment and order handed down by the High Court of Part B (in the alternative):
South Africa (Western Cape, Cape Town), on 27 February 2009 in the matter between Gundwana v Steko Development CC, case number A 379/2008.
2) Costs of the application to be costs in the appeal.
1) Applicant be granted direct access to this Honourbale Court.
Part C (in the further alternative):
2) It be declared that:
2.1) Section 27A of the Act and rule 31(5)(a) of the Uniform Rules do not permit a registrar of the High Court to grant an order declaring immovable property executable.
2.2) Alternatively, section 27A of the Act and rule 31(5)(a) of the Uniform Rules are constitutionally invalid to the extent that it permits a registrar of the High Court to grant an order declaring immovable property executable.
2.3) It is declared that a court may only declare immovable property executable when the summons seeking such an order includes a warning to defendant that::
2.3.1) Defendant’s right to access to adequate housing under section 26(1) of the Constitution of the Republic of South Africa, 1996 (“the Constitution”) and other rights might be affected by the order sought.
2.3.2) A court will consider all relevant circumstances before granting of such an order.
2.3.3) A defendant may make representations to a court on such relevant circumstances even if defendant has no defence to the claim for the payment of money in the summons.
2.4) Costs of the suit.
2.5) The applicant’s late filling of this application be condoned.
6. In essence it appears that the applicant seeks to:
i) Appeal, to this Honourable Court, against the judgment and order of eviction of the Western Cape High Court (Cape Town) in the matter of Gundwana v Steko Development CC (case number A 379/2008).
ii) Postpone her appeal, to this Honourable Court, against the judgment and order of eviction of the Western Cape High Court (Cape Town), Gundwana v Steko Development CC (case number A 379/2008), pending the outcome of an application for rescission (Gundwana v Nedcor Bank Limited and others) of the eviction order.
iii)
In the alternative:
Direct access, to this Honourable Court, to declare section 27A of the Act, as read with, rule 31(5)(a) of the Uniform Rules constitutionally invalid.
CHRONOLOGICAL SEQUENCING OF THE FACTS OF THE APPLICATION
7. Third respondent/Minster was not a party to the initial disputes between the applicant and the first and second respondents and will therefore rely on the facts as setout in the affidavits of these parties.
The mortgage bond:
7.1 During May 2001 applicant registered a mortgage bond with the second applicant (Nedcor Bank) over the property (Erf 457 and Erf 458 Tyolora at 457 Matrose street, Thembalethu) for a capital amount of R 25 000-00. The property was purchased for an amount of R 52 000-00.
7.2 Applicant’s repayment of the installments in terms of the mortgage bond was inconsistent and irregular.
Second respondent’s action against applicant:
7.3 On 8 May 2003 second respondent issued summons out of the Western Cape High Court (Cape Town), served on the applicant on 14 October 2003, claiming the following substantial relief:
i) Payment of he sum of R 33 543-06, being the balance due and
owing in respect of moneys lent and advanced by the second respondent to applicant pursuant to a mortgage bond.
ii) An order declaring the property executable for the said sum.
Default judgment:
7.4 On 7 November 2003 second respondent, after applicant’s failure to enter an appearance to defend, applied for judgment by default in respect of the substantive relief claimed in its action.
Writ of attachment:
7.5 On 7 November 2003 a writ of attachment was obtained directing the Sheriff to attach and take into execution the property cause to be realised therefrom the sum of R 33 543-06 plus interest thereon.
7.6 On 23 March 2003 Sheriff effected service of the writ of attachment on applicant by fixing a copy thereof on the front/main door of the property and by handing a copy thereof to a Ms G Kettledas on the part of the property used as a shop.
7.7 On 26 July 2007 notice of the sale in execution of the property was
handed to the occupant of the property and was also affixed to the door of the property.
Sale in execution:
7.8 On 15 August 2008 the sale in execution of the property duly took place and first respondent purchased property for an amount of R 207 000-00 and property was subsequently transferred into the name of the first respondent.
Eviction applications:
7.9 Applicant resisted vacating the property resulting in an application for applicant’s eviction being instituted, by the first respondent, in the Magistrate’s Court. First respondent abandoning his initial eviction application.
7.10 On 23 April 2008 another eviction order, in terms of the Prevention of Illegal Eviction from an Unlawful Occupation of Land Act, 19 of 1998 (“PIE”), was launched in the Magistrate’s Court by the first respondent.
7.11 On 27 May 2008 the eviction application was to commence but was postponed to 3 June 2008 with the applicant appearing in person.
7.12 On 3 June 2008 applicant was represented and a further application for postponement was requested in order to obtain certain documents from applicant’s previous attorneys of record (Legal Aid).
7.13 This application was refused on the following grounds:
i) A previous postponement had already been granted.
ii) The reasons for the postponement, in the opinion of the presiding officer, did not “sound fine” as it was unclear why applicant’s file form legal aid was required in order for her prepare opposing papers.
Accordingly the applicant’s eviction from the property was granted.
Appeal against eviction order:
7.14 On 18 June 2008 applicant noted an appeal to the Western Cape High Court (Cape Town) against the judgment and order of the Magistrate’s Court on the following grounds, that:
i) The magistrate had erred in finding that the applicant was an
“illegal” occupant in terms of PIE; and
ii) The magistrate had not taken cognisance of section 26 of the Constitution.
Outcome of appeal:
7.15 On 27 February 2009 the appeal was dismissed by the Western Cape High Court (Cape Town).
7.16 On 25 February 2010 applicant’s application for leave to appeal was dismissed with costs by the Western Cape High Court (Cape Town).
Rescission application against default judgment:
7.17 On 28 October 2008 applicant applied for a rescission of the default judgment of the registrar of 7 December 2003.
7.18 Second respondent is opposing this rescission applicant and filed its answering affidavit on or about 1 April 2009.
7.19 Applicant failed to deliver any reply to second respondent’s answer.
7.20 The rescission application was enrolled for hearing in the Western Cape High Court (Cape Town) for 11 February 2010.
7.21 By agreement between the parties the rescission application was postponed pending the outcome of this application.
THIRD RESPONDENT’S SUBMISSIONS
8. Third respondent/Minister, although not opposing the application, presents the following submissions in terms of which it is submitted that this Honourable Court could consider the application.
9. Application for leave to appeal
9.1 Applicant’s application for leave to appeal to this Honourable Court is directed against the order, confirmed on appeal of the Western Cape High Court (Cape Town), for her eviction form the property alone.
Appeals to the Constitutional Court:
9.2 Appeals to this Honouable Court are governed in terms of rule 19 of the Rules of the Constitutional Court.
9.3 An appeal takes place in peculiar circumstances and based on a specific facts which needs to be established by the applicant.
9.4 The granting of an appeal is a matter within the discretion of this Honourable Court and could be granted if:
i) The application raises a constitutional matter; and
ii) It is in the interest of justice to grant such an application.
Applicant’s case in comparison with the interests of justice requirement:
9.5 The eviction order against the applicant was made pursuant to the default judgment granted by the registrar of the Western Cape High Court (Cape Town).
9.6 These two issues are interrelated and dependant on one another.
9.7 The majority of applicant’s arguments are based squarely on the constitutional invalidity of section 27A of the Act, as read with, rule 31(5)(a) of the Uniform Rules.
9.8 Applicant did not raise any of these arguments, in respect of constitutional invalidity of section 27A of the Act, as read with, rule
31(5)(a) of the Uniform Rules, in the courts a quo resulting in this Honourable Court having to deal with the matter, on appeal, in a piecemeal fashion.
9.9 Furthermore, applicant requests this Honourable Court to decide her appeal without the benefit of knowing the outcome of the rescission application brought against the default judgment issued by the registrar of the Western Cape High Court (Cape Town) – Gundwana v Nedcor Bank Limited & others under case number 8299/03.
*
[This Honourable Court is referred to the fact that a similar challenge against the constitutional validity of section 27A of the Act, as read with, rule 31(5) of the Uniform Rules is currently before the Eastern Cape High Court (Grahamstown) in the matter of S P Kanana & another v The Minister of Justice and Constitutional Development & others (case number 1671/2010).The Minister is sited as the second respondent in these proceedings and is required to file his answering papers by mid August 2010.
Unless otherwise directed, a copy of this application will be
made available to this Honourable Court at the hearing hereof.]
10. Application for postponement:
10.1 On application’s own version the setting aside of her eviction order is necessary in order for her to proceed and finalise her rescission application against the default judgment granted by the registrar of the Western Cape High Court (Cape Town).
10.2 On the version of the second respondent the rescission application is already postponed as per agreement between the parties and applicant failed to inform this Honourable Court thereof.
10.3 It is therefore inappropriate for the applicant to request such a postponement as the matter might become purely academic in the event of the rescission application being granted.
10.4 Furthermore, the default order of the registrar and the eviction order against the applicant are interrelated and dependant on one another.
This Honourable Court might be required to further decide this matter in a piecemeal fashion should applicant not be satisfied with the outcome of the rescission application.
11. Application for direct access (in the alternative):
11.1 Applicant, in the alternative, seeks direct access to this Honourable Court, to declare section 27A of the Act, as read with rule 31(5)(a) of the Uniform Rules, constitutionally invalid.
Applications for direct access:
11.2 An application for direct access is an exceptional procedure and not ordinarily in the interests of justice as this Honourable Court would be required to sit as a court of first and last instance. Furthermore such an application for direct access:
i) May require this Honourable Court to deal with disputed facts on which the leading of evidence might be necessary.
ii) May require this Honourable Court to decide constitutional issues which are not decisive of the litigation and which might prove to be purely academic.
iii) Will require this Honourable Court to adjudicate a matter without the benefit of the views of other Courts having constitutional jurisdiction.
11.3 Direct access should be jealously guarded by this Honouable Court save should compelling reasons exists.
Applicant’s case in comparison with the requirement of compelling reasons:
11.4 It is again emphasised that applicant is approaching this Honourbale Court, on a constitutional matter, for the first time, and without this Honourable Court having the benefit of this substantive constitutional issues first being raised in other Courts.
11.5 Furthermore, and on the applicant’s own version, this matter might become purely academic depending on the outcome of the rescission application.
CONSTITUTIONAL VALIDITY OF SECTION 27A OF THE ACT, AS READ WITH, RULE 31(5)(a) OF THE UNIFORM RULES
12. Applicant’s challenge against the constitutional validity of the impugned provisions is founded on her socio-economic rights in terms of section 26 of the Constitution.
13. Furthermore, applicant relies on the judgment of this Honourable Court in the
matter of Jaftha v Schoeman and others; Van Rooyen v Stolz and others 2005 (1) BCLR 78 (CC) in support of her challenge.
Powers of the registrar in terms of rule 31(5)(a) of the Uniform Rules:
14. Rule 31(5)(a) of the Uniform Rules derives its purpose and power from section 27A of the Act, and reads as follows:
“Whenever a defendant is in default of delivery of a notice of intention to defend or of a plea, the plaintiff, if he or she whishes to obtain judgment by default, shall where each of the claims is for a debt or liquidated demand, file with the registrar a written application for judgment against such defendant: Provided that when a defendant is in default of delivery of a plea, the plaintiff shall give such defendant no less that 5 days’ notice of his or her intention to apply for default judgment.”
15. Rule 35(5)(b) of the Uniform Rules vests the registrar with the discretion, on receipt of such an application, to either:
i) Grant the judgment as requested;
ii) Grant judgment for part of the claim only or in amended terms;
iii) Refuse judgment wholly or in part;
iv) Postpone the application for judgment on such terms as he may consider just;
v) Request or receive oral evidence or written submissions;
vi) Require that matter be set down for hearing in open court.
16. According to Erasmus, Superior Court Practice (JUTA) at B1 – 204A, the purpose of this subrule is to relieve the burden on judges in the High Courts.
17. The subrule empowers the registrar (and imposes on him the duty) to grant or refuse judgment in uncomplicated matters where he simply checks that all administrative and formal steps have been taken to justify the judgment and where no evidence is required to prove the amount of the claim or the cause of action.
18. This rule therefore requires the registrar to perform a function that a Court would otherwise perform. However, the registrar only has the powers specifically conferred upon him by subrule (5)(b).
19. In case where the registrar has a legitimate doubt/concern about whether the judgment should be granted or not, it is his duty to refer the matter for hearing in open court.
Applicant’s reliance on the Jaftha – judgment;
20. It is submitted that applicant’s reliance on the Jaftha – judgment is misplaced in that:
i) Applicant’s dispute is based on a mortgage bond.
ii) A mortgage bond is an agreement between the borrower and the lender, binding upon third parties, once it is registered against the property title.
iii) Lender, should borrower be in default with payments, will be entitled to have the property sold in order to satisfy the outstanding debt.
iv) The borrower, through own violation or choice, compromises his/her rights to ownership, through acquiring a mortgage, until such time as his/her debt is repaid.
v) Borrower’s right to ownership and occupation is therefore dependant on the repayment of the monthly mortgage amount.
vi) The mortgage bond therefore curtails the right to property and ownership of a borrower as these rights are fused with bondholder’s rights in terms of the title.
vii) The value of the mortgage bond, as an instrument of security, therefore lies in the confidence that the law will give effect to its terms.1
1 Standard Bank of South Africa Ltd v Saunderson and others 2006 (2) SA 264 (SCA) paras 1 – 3.
CONCLUSION
21. In conclusion it is submitted that this application is premature and not in the interests of justice for this Honourable Court to adjudicate the constitutional issue raised in piecemeal fashion and without the benefit of the views of other Courts.
22. These submissions are presented for the assistance of this Honourable Court the third respondent not opposing the relief sought by the applicant.
23. No order for costs is sought.
SIGNED AT PRETORIA ON THIS 21ST DAY OF JULY 2010
______________________
Pieter Bezuidenhout
Counsel for the third respondent
