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IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

CASE NO 04/00430

In the matter between

PETRUS GEYSER APPLICANT

and

NEDBANK LIMITED FIRST RESPONDENT

(formerly NEDCOR BANK LTD)

THE SHERIFF, JHB NORTH SECOND RESPONDENT

FRANS VAN DER WESTHUIZEN THIRD RESPONDENT

REGISTRAR OF DEEDS FOURTH RESPONDENT

In re

NEDBANK LIMITED PLAINTIFF

(formerly NEDCOR BANK LTD)

and

PETRUS GEYSER DEFENDANT

J U D G M E N T

VAN OOSTEN J

[1] This is the return day of a rule nisi granted by Goldstein J in an application for the stay of the transfer of an immovable property sold in execution, pending the outcome of an application for recission of judgment. The applicant seeks confirmation of the rule which is opposed by the first respondent.

[2] On 13 January 2004 the first respondent (“the bank”) instituted action, by way of a simple summons against the applicant. Its cause of action was monies lent and advanced in terms of a loan secured by a first mortgage bond registered over certain immovable property owned by the applicant. The claim was for payment of the sum of R409 117,89 interest thereon and costs as well as for a declaration for the executability of the mortgaged property “for the said sums and costs.”

[3] Summons was served at the applicant’s chosen domicilium citandi et executandi on 20 January 2004, by handing a copy thereof to the occupier of the hypothecated property, who according to the sheriff’s return of service was renting the property from the applicant. By notice dated 3 February 2004 and filed with the Registrar on 4 February 2004 the bank’s attorneys applied for judgment by default in terms of Rule 31(5)(a) on the basis that the applicant was in default of appearance. On 5 February 2004 the Registrar granted default judgment for the sums claimed and costs and in addition thereto declared the hypothecated property executable.

[4] On 8 August 2005 the applicant launched an application for recission of the default judgment. It was served on the bank on 15 August 2005 indicating the date of hearing of the application in the event of no opposition as 6 September 2005. In the recission application the applicant sets forth the facts and circumstances that gave rise to the launching thereof. In explaining his non-appearance the applicant states that he became aware of the summons on 1 February 2004 and on the very next day instructed his attorney to enter an appearance to defend the matter on his behalf. On 3 February 2004 being the last of the dies induciae allowed in the summons for entering an appearance to defend, the applicant’s attorney prepared and transmitted by facsimile a notice of intention to defend together with an explanatory letter to the bank’s attorneys as well as to the Registrar. These documents for reasons that I will later deal with apparently did not reach the court file with the result that judgment by default was granted on 5 February 2004.

[5] The bank’s attorneys did respond to the notice of intention to defend and the accompanying letter. On 5 February 2004 the attorney dealing with this matter on behalf of the bank’s attorneys, wrote to the applicant’s attorney informing him that she had been out of the office on 3 and 4 February 2004 and therefore only received the documents in question on her return to the office that very day. Regarding the default judgment which by then had already been granted she merely stated “clearly your notice of intention to defend had not yet reached the Registrar at the time when an application for default judgment was brought.”

[6] Further discussions between the parties eventually led to the conclusion of a settlement agreement. In terms thereof the applicant undertook to bring the arrears up to date by way of immediate as well as future payments to the bank while the bank agreed to a recission of the default judgment. In addition the bank undertook to stay further legal action on condition that the applicant adhered to his obligations in terms of the settlement agreement.

[7] The proposed application for recission of judgment fell into oblivion. The applicant did however proceeded to make the payments in terms of the settlement agreement but once again fell into arrears after December 2004. This prompted the bank’s attorneys to obtain from the Registrar a re-issue of the warrant of execution. The hypothecated property was attached on 27 June 2005. On becoming aware of the attachment the applicant on 8 August 2005 as I have already alluded to, launched the application for recission of judgment. On 18 August 2005 the hypothecated property was sold sub-hasto. On 30 August 2005 the applicant by way of urgency launched an application under the same case number as the recission application in terms of which he sought an interim interdict to suspend the transfer of the hypothecated property to the third respondent¹ as well as a rule nisi directed at the setting aside of the default judgment as well as all the steps taken pursuant thereto. The bank opposed the application. The matter came before Goldstein J. One of the grounds upon which the applicant assailed the validity of the judgment by default, was the contention that this court had no jurisdiction to hear and determine the action against him. Having heard full argument on the merits of the matter and in particular on the jurisdictional issue Goldstein J delivered a fully reasoned judgment in which the applicant’s contention regarding the lack of jurisdiction was upheld. Having reached this conclusion the learned Judge issued a rule nisi² which reads as follows:

“2. That the first, second and fourth respondents be interdicted and prohibited from passing transfer of Erf 712 Parktown (Extention) Township, Registration Division IR Province of Gauteng to the third respondent, being the purchaser at the sale in execution, pending decision on the return date of the rule nisi of the issues listed here below;

4. That a rule nisi be issued calling on the respondent to show cause on Tuesday 13 December 2005, at 10 a.m. or so soon thereafter as the matter may be heard:

1. why the default judgment of 5 February 2004 should not be declared void;

2. why the writ of execution, dated 27 June 2005, should not be declared invalid and of no force and effect;

3. why the attachment of Erf 712 Parktown (Extention) Township, Registration Division IR, Province of Gauteng, should not be set aside;

4. why the sale in execution on 18 August 2005 of the said Erf 712, Parktown should not be set aside;

5. why the costs should not be awarded against the first respondent and such other respondents as may oppose the confirmation of the rule.”

A full set of affidavits has subsequently been filed in which a number of issues are dealt with.

[8] A matter which at the outset has exercised my mind is what effect should be given to the finding of Goldstein J on the jurisdictional aspect. Did the learned Judge finally determine the jurisdictional issue or was it merely meant as an expression of a provisional view in the face of the interim nature of the order that was granted? Whether legal issues should be decided at the interlocutory stage of the proceedings is the subject of some controversy and has been dealt with in a number of cases revealing different approaches that have been adopted. In Ex Parte St Clair Lynn 1980 (3) SA 163 (W) Coetzee J said:³

“I think that it is advisable, when one deals with the matter at the stage when merely a rule nisi is asked, particularly when full argument is presented to one on the particular points in issue, that the problem should not be shelved, as it were, for decision by another Judge if one is persuaded that the relief ought not to be granted.”

The notion of a Judge “half-heartedly” dealing with a matter at the interlocutory stage of the proceedings and leaving the final decision thereof in the hands of the trial Judge did not find favour with Viljoen J (as he then was) in Fourie v Olivier en ‘n Ander 1971 (3) SA 274 (T) at 285F-H. Goldstein J dissented from this view in a judgment reported sub nom Tony Rahme Marketing Agencies SA (Pty) Ltd and Another v Greater Johannesburg Transitional Metropolitan Council 1997 (4) SA 213 (W). Holding the opposite view the learned Judge came to the conclusion that the views expressed by a Judge at an interlocutory stage of the proceedings in particular where situations of urgency require prompt decision, are only to be considered as prima facie views which would not prevent the trial Judge at the hearing thereof to revisit that particular issue. The expression of such a view and the granting of interim relief the learned Judge proceeded to hold would not conflict with the principles of res judicata to which he added:⁴

“I also see no embarrassment in an urgent court Judge being overridden by a trial judge. Each of us, privileged to hold this high and responsible office, owe, in the wielding of our considerable power, a duty only to truth and justice. The interlocutory decisions of Colleagues, and indeed those of our own, are not binding at later stages of the proceedings and should, and I trust, do yield easily to persuasive arguments indicating error or oversight.”

In Beecham Group Ltd v B-M Group (Pty) Ltd 1977 (1) SA 50 (T) Franklin J writing for the Full Court approved of the approach adopted by the Commissioner of Patents (Nicholas J) whose decision was on appeal to the effect that where “difficult questions of law” were raised they had to be dealt with at the trial and not the interlocutory stage of the proceedings. If it is accepted that “difficult questions of law” imply that ordinary questions of law could be decided at the interlocutory stage of the proceedings, Blignaut AJ (as he then was) said in Ward v Cape Peninsula Ice Skating Club 1998 (2) SA 487 (C) it would be possible to reconcile the views Viljoen J in the Fourie v Olivier en ‘n Ander referred to above and the approach of Nicholas J approved of in the Beecham - case.

[9] Against this background I am of the view that a legal issue should only be decided at the interlocutory stage of the proceedings if it would result in the final disposal of either the matter as a whole or a particular aspect thereof. Such an approach I consider is both practical and sensible and has the advantage of curtailing costs. The mere expression by the Judge hearing the application at that stage of the proceedings of his or her prima facie views on a particular aspect is of academic interest only and does not advance the matter any further towards finality. The finding that the Court has no jurisdiction disposes of the matter as a whole. In casu a rule nisi was issued which resulted in the continuation of the proceedings. No finality in any sense was reached nor did the decision of the learned Judge bring finality on the issue of jurisdiction.⁵ The issue of jurisdiction therefore remained alive. What is more it led to increased costs. On the first day of the hearing Goldstein J during argument postponed the matter and requested counsel to file supplementary heads of argument on the issue of jurisdiction. Supplementary heads of argument on behalf of both the applicant and the bank were filed and an extra day was taken up for the hearing of full argument on this aspect and the delivery of judgment. For these reasons I am of the view that it is undesirable for a Judge at the interlocutory stage of the proceedings in a judgment decide legal issues by merely expressing prima facie views on those issues unless such decision disposes of the matter as a whole or any aspect thereof.

[10] This brings me to judgment of Goldstein J on the jurisdictional issue in the present case. I propose to revisit the issue on the basis that Goldstein J merely expressed a prima facie view on this aspect. In argument before me counsel for the bank raised the further contention that the applicant submitted to the jurisdiction of this court in choosing a domicilium citandi et executandi within the area of jurisdiction of this court and further by concluding and honouring the agreement of settlement after having become aware of the default judgment. The contention regarding submission to jurisdiction is not without merit but in the view I take of the matter it is not necessary to express any final views on this aspect. Having revisited the jurisdictional issue I find unable to align myself with the prima facie views expressed by Goldstein J. Before dealing with the reasoning of the learned Judge it is necessary to list the jurisdictional facts that are present in this matter. The extra-territorial facts all existing or having arisen in Pretoria are the applicant’s residence and place of business, the signing of both the loan agreement on which the bank’s cause of action was based, as well as the power of attorney to pass the bond and finally where performance in terms of the loan agreement had to take place. As opposed hereto the bond was registered in Johannesburg where the hypothecated property which was the applicant’s chosen domicilium citandi et exucutandi, was situated. In regard to these factors Goldstein J said:

“It seems to me that at the end of the day so much of the loan transaction occurred outside the jurisdiction of this court, and so little within it, that there are not enough factors giving rise to the jurisdiction of this court and to justify its competence to hear the matter.”

And the learned Judge went on to say

“There are no grounds of convenience, justice and good sense requiring this court, rather than that in Pretoria, to have jurisdiction. That such a requirement, namely of convenience, justice and good sense must be satisfied is implicit in the dicta of Cameron JA⁶ which I have quoted. The first respondent transacted with the applicant in Pretoria, advanced money to him there and expected to pay it there. That Court seems to me to be clearly the appropriate one, and none of the grounds for shifting jurisdiction to this court is satisfied.”

For the reasons that follow I am inclined to hold the opposite view.

[11] Section 19(1)(a) of the Supreme Court Act 59 of 1959 provides that a High Court shall have jurisdiction over persons residing in and causes arising within its area of jurisdiction. It is by now well established that the expression “causes arising” signifies all factors giving rise to jurisdiction under the common law including although not limited to a cause of action (See Cordiant Trading v Daimler Chrysler Financial Services (Pty) Ltd 2005 (6) SA 205 (SCA) par [11]). Reverting to the facts of this matter it is true that all the facts that may establish this court’s jurisdiction relate to the hypothecated property which is situated within the area of this court’s jurisdiction. As already mentioned a declaration as to the executability thereof was sought and obtained. Such declaration is not an order but as Van Reenen J held in Ivoral Properties (Pty) Ltd v Sheriff, Cape Town and Others 2005 (6) SA 96 (C) at 114 par [50] “…merely part of the procedure by which the execution of a judgment debt is obtained and does not constitute an exercise of jurisdiction over such property by the Court from which it issues...” But the property quite apart from its executability, has another relevance for purposes of founding jurisdiction. It undoubtedly played an integral if not vital part in the loan transaction which as indicated earlier constituted the basis for the bank’s cause of action. It was obviously on the strength of the security of a first mortgage bond that the loan was granted to the applicant. This factor Goldstein J held was of no moment as so the learned Judge reasoned “In fact, if it so wished, the first respondent could have advanced the money without registering the bond at all”. I am unable to agree. Fact of the matter is that security was required by the bank and it was provided. Whether the bank could have granted the loan without any form of security in my view is of no relevance. It is accordingly my finding that the situs of the hypothecated property constitutes a jurisdictional connecting factor giving rise to the jurisdiction of this Court.

[12] It remains to consider whether this one factor is sufficient to confer jurisdiction on this Division. In Roberts Construction Co Ltd v Willcox Bros (Pty) Ltd 1962 (4) SA 326 (A) the Court in applying the common law doctrine of continentia causae held that where one court has jurisdiction over a part of a cause, considerations of convenience, justice and good sense justify its exercising jurisdiction over the whole cause. The further development of the doctrine which was expressly left open in that matter was taken a step further in Permanent Secretary, Department of Welfare Eastern Cape and Another v Ngxuza and Others 2001 (4) SA 1184 (SCA) where Cameron JA in dealing with jurisdiction in a class action, held on inter alia constitutional grounds that the jurisdiction of the Eastern Cape Division extended to include extra-jurisdictional applicants resulting in that court having jurisdiction over the whole class. In the instant matter the situs of the hypothecated property as I have alluded to, does not strictly form part of bank’s cause of action. It is however for the reasons stated, a factor giving rise to the jurisdiction of this Court. Once that is accepted the correct approach to be adopted in my view must be consonant with the gradual amplification rather than limitation by our Courts of the traditional rationes jurisdictionis. There is no good reason why the doctrine of cohesion of causes should not be applied in the present matter.

[13] The rationes jurisdictionis existing in this matter in my view confer concurrent jurisdiction on this Division as well as the Transvaal Provincial Division. On this aspect it is of interest to note that the Rules of Court confer concurrence of jurisdiction of the Transvaal Provincial Division in the area of this Court.⁷ Considerations of convenience, justice and good sense are as far as these two Divisions are concerned, almost evenly balanced. Nothing has been shown to exist that would justify a preference of one Division over the other. Nor does the practical import of either of the two Divisions exercising jurisdiction⁸ in the circumstances of this case tip the scale in favour of either of them. Straddling the Jukskei River between the two Divisions with modern day transport facilities and sophisticated systems of communication has become increasingly undemanding. Finally, the fact that the number of jurisdictional factors having arisen in Pretoria outnumbers those in this Division⁹ can hardly oust this Division of its jurisdiction. A conjuctio causarum clearly exists. Both Divisions having concurrent jurisdiction the bank as dominus litis consequently became entitled as a matter of choice, to institute the proceedings in this Court.

[14] This brings me to the application for recission of judgment. From what I have set out above concerning the events that preceded the granting of the judgment by default, it is clear that the applicant timeously sent a notice of intention to defend to both the bank’s attorneys and the Registrar. As to the former it as mentioned elicited a response by way of a letter¹⁰ only and the application for default judgment simply proceeded. The feeble explanation of the attorney dealing with the matter of being out of the office when the notice was received is plainly irrelevant. It is common cause that the documents were sent and received by the bank’s duly appointed attorneys of record. Under these circumstances the bank’s request for default judgment constituted an abuse of the process of the court. They were in face of the notice of intention to defend not entitled to apply for default judgment. It was faintly suggested by the bank¹¹ that the service by fax did not constitute proper delivery in terms of the Rules.¹² But such a technicality¹³ would not have availed the bank’s attorneys. They were under a duty to disclose to the Registrar having received the notice of intention to defend. It is trite that a request for default judgment is in the nature of an ex parte application therefore requiring an applicant to make full disclosure of all relevant factors which in casu would have incorporated informing the Registrar that a notice of intention to defend had been received (Cf Bankorp Ltd v Ridl and Another 1993 (4) SA 276 (D); Santam Ltd and Others v Bamber 2005 (5) SA 209 (W)). The conduct of the bank’s attorneys fell short of this standard and it accordingly follows that there can be no alternative but to set aside the steps taken by the Registrar in ignorance of the fact that a notice of intention to defend had been filed. But there is a further reason for setting aside the default judgment: it was clearly granted by mistake. As mentioned the applicant’s notice of intention to defend was sent by fax to the Registrar on 3 February 2004. The applicant states that he at some stage after the judgment had been granted made enquiries with the Registrar who informed him that the notice of intention to defend had not reached the court file as it had been uplifted by the bank’s attorneys on 16 January 2004 and only returned to its rightful place the day before judgment was entered. Nothing turns on this aspect – it is common cause that both the Registrar and the bank’s attorneys were in possession of the applicant’s notice of intention to defend when judgment by default was entered. The matter therefore had by then already become defended. It follows that the default judgment falls to be set aside. Finally, I should mention that several further grounds¹⁴ in support of recission of judgment were raised by the applicant. The conclusion I have come to however makes it unnecessary for me to consider those grounds.

[15] As for the costs of this application both parties have achieved some success, the applicant in obtaining recission of the judgment and the bank in relation to the finding that this Court has jurisdiction. The fairest order in my view would be for the costs of this application to follow the result in the action.

[16] In the result the following order is made:

1) The judgment by default in case no 04/00430 dated 5 February 2004 is rescinded and set aside.

2) All steps taken pursuant to the judgment referred to in par 1 above are set aside.

3) The costs of this application will be costs in the action.

__________________________

FHD VAN OOSTEN

JUDGE OF THE HIGH COURT

COUNSEL FOR THE APPLICANT ADV RJ RAATH SC

APPLICANT’S ATTORNEYS AS CASSIM ATTORNEYS c/o SGM MIA

COUNSEL FOR THE FIRST RESPONDENT ADV AP JOUBERT SC with him

ADV NJ HORN

FIRST RESPONDENT’S ATTORNEYS BLAKES MAPHANGA INC

DATE OF HEARING 9 FEBRUARY 2006

DATE OF JUDGMENT 22 MAY 2006

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