IN THE HIGH COURT OF ESWATINI
JUDGMENT
Case No. 746/2016
In the matter between:
DON BOSCO GININDZA 1st Applicant
DON BOSCO GININDZA N.O. 2nd Applicant
DON BOSCO FELIX THEMBISO GININDZA TRUST 3rd Applicant
And
SWAZILAND DEVELOPMENT FINANCE
CORPORATION 1st Respondent
NKOSINGIPHILE DLAMINI N.O. 2nd Respondent
In re:
SWAZILAND DEVELOPMENT FINANCE
CORPORATION Plaintiff
And
DON BOSCO GININDZA 1st Defendant
DON BOSCO GININDZA N.O. 2nd Defendant
DON BOSCO FELIX THEMBISO GININDZA TRUST 3rd Defendant
Neutral citation: Don Bosco Ginindza & 2 Others v Swaziland Development Finance Corporation & Another In re: Swaziland Development Finance Corporation v Don Bosco Ginindza & 2 Others (746/2016) [2020] SZHC 19 (28 January 2020)
Coram : T. L. Dlamini J
Heard : 5/04/2018; 1, 20&27/11/2018; 6/12/2018
Delivered : 28 January 2020
Summary: Civil procedure – Loan agreement entered into between 1st Applicant and 1st Respondent – Mortgage bond executed in respect of the loan agreement – Mortgagor fails to repay loan settlement instalments – Action proceedings instituted against mortgagor – Default judgment sought and granted in favour of mortgagee for the principal amount of loan in the sum of E205, 760 – Mortgaged property foreclosed and sold by public auction – Loan balance alleged to have been reduced to E51, 761.19 – A second immovable property attached and advertised for sale by public auction – Attachment of the second immovable property challenged before this court.
Held: That the attachment of the second immovable property is for realizing an amount of money that is beyond the default judgment order which was sought and granted by the court.
Held further: That the advertised notice of sale by public auction of the second immovable property is set aside.
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JUDGMENT _________________________________________________________________
The application
[1] On the 29th March 2018 the applicants filed an application under a certificate of urgency wherein they seek, inter alia, the following orders:
1. That the notice of sale bearing High Court stamp dated 12th March 2018 be set aside and declared unlawful;
2. Staying execution of the notice of sale bearing High Court stamp dated 23rd March 2018;
3. That the 1st Respondent be ordered and directed to furnish to the 1st Applicant or his attorneys an up to date statement of account in respect of a written loan agreement entered into by the 1st Applicant and the 1st respondent on 23rd July 2014;
4. That the 1st Respondent be called upon to reimburse the 3rd Applicant the balance sum of money that may have remained after the sale by public auction held on the 15th July 2016, of Portion 48 of Farm 1209, situate in the Hhohho District, Kingdom of Eswatini; and
5. Costs of suit at attorney and own client scale.
Background
[2] In the month of July 2014 the 1st Applicant and 1st Respondent concluded a loan agreement in terms of which the 1st Applicant was loaned a sum of E205, 760 (Two Hundred and Five Thousand Seven Hundred and Sixty Emalangeni). A mortgage bond over Portion 48 of Farm 1209 situate in the Hhohho District was duly executed in respect of the loan agreement. This property is owned by the 3rd Applicant which is a trust entity, and whose trustee is the 2nd Applicant. An evaluation report, according to the 1st Applicant, valued the property at E490, 000 (Four Hundred and Ninety Thousand Emalangeni).
[3] Due to certain challenges, the 1st Applicant was unable to make the agreed monthly repayments. This led the 1st Respondent to institute court proceedings by way of summons issued against the Applicants. These proceedings were not defended and this court, on 23rd May 2016, granted in favour of the 1st Respondent judgment by default. The default judgment was granted in the following orders:
1. Payment of the sum of E205, 760 (Two Hundred and Five Thousand Seven Hundred and Sixty Emalangeni);
2. Interest on the above amount at the rate of prime +4.5% currently at 13.5% per annum calculated from the date of summons to date of final payment; and
3. Costs of suit at attorney and own client scale.
[4] Pursuant to the default judgment, the mortgaged property, viz., Portion 48 of Farm 1209, was attached and sold by public auction on the 24th March 2017. According to 1st Respondent, the property was sold for a sum of E280, 000 whereas the balance outstanding at the time was E318, 707.99. The debt, according to 1st Respondent, was reduced to E51, 671.19. When requested to settle this outstanding balance, the 1st Applicant is stated to have indicated that he was unable. As a result, a second writ of attachment, and execution, was issued against immovable property owned by the 1st Applicant. The property is described as Portion 72 (a portion of Portion 30) of Farm No.75, situate in the District of Hhohho, Mbabane, Swaziland.
[5] The above mentioned property [Portion 72 (a portion of Portion 30) of Farm No.75] was allegedly attached at the direction of the 1st Applicant, which allegation is denied by the 1st Applicant.
[6] The 1st Applicant contends that he was not furnished with an updated statement of account following the sale by public auction of Portion 48 of Farm 1209. This contention is however disputed by the 1st Respondent.
DETERMINATION OF APPLICATION
[7] The matter was briefly dealt with on different occasions in chambers. As indicated in paragraph [1] above, the application was filed on 29th March 2018. The Respondents filed their answering affidavits on 4th April 2018. On the first court day, viz., 5th April 2018, an order was issued by consent of the parties. The sale in execution was stayed indefinitely and the Applicants were ordered to file their replying affidavit within two weeks or to approach the 1st respondent within that period for negotiations, failing which the Respondents are granted leave to proceed with the sale in execution.
[8] Negotiations between the parties were unfruitful. The Applicants duly filed their replying affidavit. Based on the statement of account prepared by the 1st Respondent and attached to its answering affidavit, the 1st Applicant submitted that his liability is for the sum of E259, 761.59 only. According to the statement of account, this is the amount owing as at 23 May 2016 (date when the default judgment was granted). The 1st Applicant further submitted that any subsequent interest accrued after this date is directly attributable to the Respondents for their failure to execute promptly after the default judgment was granted.
[9] The 1st Applicant also contested the interest levied by the 1st Respondent after 23 May 2016. Instead of charging interest annually, as per the default judgment order, the 1st Applicant submitted that the interest was charged on a monthly basis.
[10] Both parties were then ordered to go through the statement together, with each party being accompanied by its own accountant, and to do the calculations and determine whether or not the interest was charged monthly. Thereafter the parties were to file an up-to-date statement of account for consideration by the court. The parties were to be notified of a date for them to make submissions.
[11] On the court return day (06 December 2018), the parties had still not agreed on the calculations. A complete statement of account was however filed by the 1st Respondent on the 3rd December 2018. The statement was for the period beginning from 30 July 2014 up to 30 October 2018.
[12] Based on the statement of account and the papers filed of record, I find it apposite to mention that the attachment and intended sale of Portion 72 of Farm No.75 is premised on the loan agreement balance as reflected in the statement and not on the default judgment issued by this court. Mr Jele for the Respondents conceded on the 06 December 2018 that the application for default judgment was for the original loan amount of E205, 760 and not the actual amount that was due and owing at that time. He was then ordered to procure and file a statement of account that is in conformity with the default judgment granted on 23 May 2016. The matter was then stood down pending a filing of the statement. That statement has not been filed up-to-date, hence my decision to prepare this judgment on the basis of the papers filed of record.
[13] Ex facie the statement of account filed on 03 December 2018, the amount owing as at 30 March 2017 is E318, 707.99. In support of my conclusion that the challenged sale is premised on the loan agreement balance as reflected by the statement and not on the default judgment order, the 1st Respondent states in its answering affidavit what is quoted below:
11. Consequently a third notice of sale was published for 24th March 2017 … On this occasion, the property was sold for a sum of E280 000.00 … I pause to mention that at the time of this sale, the outstanding balance was now a sum of E318, 707.99. (own emphasis)
12. The purchaser duly complied with the conditions of sale and ultimately the mortgage bond was cancelled and the applicant’s debt reduced to E51 671.19. That was the amount that was outstanding as at 30th June 2017…
13. We then caused an instruction to be given to the deputy sheriff Mr Nkosingiphile Dlamini to approach the applicant and request him to settle the outstanding balance. The defendant indicated that he was not in a position to settle the outstanding balance. Consequently, a writ of execution for movable property was issued so that the sheriff could attach movables belonging to the applicant in order to settle the debt…
14 … It is the applicant that then directed the sheriff to attach his immovable property in order to realize the outstanding amount…
15 …
16 It was on this basis that a sale of the immovable property was then advertised for 6th April 2018.
[14] In terms of Rule 45(1) of the Rules of this court, a party in whose favour a judgment has been pronounced may sue out of the office of the Registrar a writ for execution. According to Herbstein & Van Winsen, in their book The Civil Practice of the High Courts of South Africa, 5th ed., Vol. 2, execution is defined as a process for enforcing judgments and is only available when the claim or lis has been judicially resolved. It has not been resolved if the amount payable under the judgment can only be ascertained after a further problem of law has been decided (p.1023).
[15] From the above definition, there is no hesitation in my mind that a writ of execution is to be issued for the attachment and sale by public auction of the property of the judgment debtor for the fulfillment of a judgment of the court sounding in money. In casu, the 1st Respondent was on 23 March, 2016 granted a default judgment in the sum of E205, 760., plus interest thereon at the rate of 13.5% per annum, and costs of suit at attorney and own client scale.
[16] It is common cause that the costs were not taxed nor agreed to in writing by the parties. Rule 45(2) of the Rules of this court prohibits the issuance of a writ of execution for the fulfillment of an order for costs until they have been taxed by the Taxing Master. In his founding affidavit, the 1st Applicant state what is quoted below:
-
I am not, however, certain of the exact amount for costs and other ancillary charges since I have not been furnished with a bill of taxed costs and /or statement detailing such charges…
[17] In response to the above quoted averment, the 1st Respondent answered as quoted below:
26. AD PARAGRAPHS 26, 27 AND 28
Save to state that the writ was lawfully and properly issued and that the amount is due, owing and payable, the remainder of the allegations are denied. The respondent refers the Honourable Court to the preliminary paragraphs as well as annexure “DM 4” which shows the transaction history.
[18] The preliminary paragraphs to which this court is referred by the 1st Respondent speaks nothing on the issue of costs and the 1st Applicant’s averment thereon remains unchallenged and undisputed. Annexure DM4 on the other hand, is a statement of account in respect of the loan agreement starting from 30 July 2014 up to 28 February 2018. It doesn’t reflect any amount as costs of suit, and again the 1st Applicant’s averment is unchallenged and undisputed. Costs of suit are therefore not yet due and claimable as they have not been taxed yet, and have not been agreed to in writing either.
[19] On the basis of the observations and findings I make in the above paragraphs, it is a finding of this court that the writ of attachment, execution and sale by public auction of the immovable property of the 1st Applicant, viz., Portion 72 (a portion of Portion 30) of Farm No.75 is beyond the monetary value of the default judgment order issued on the 23 May 2016. That order was for the payment of E205, 760, interest thereon at the rate of prime +4.5% currently at 13 % per annum calculated from the date of issuance of summons (18 April 2016), plus costs of suit at attorney and own client scale.
[20] Ex facie the up-to-date statement of account, interest was levied on the owing amount monthly from 30 July 2014 up to 30 October 2018. The terms of the default judgment granted on 23 May 2016 are that interest on the sum E205, 760 is to be paid at the rate of 13.5% per annum and not monthly, plus costs of suit at attorney and client scale.
[21] The amount of E318, 707.99 which the 1st Respondent states to have been owing and sought to be recovered in full through the attachment and sale by public auction of Portion 72 (a portion of Portion 30) of Farm No.75 is not covered by the default judgment order issued on 23 May 2016. The notice of sale of this property is therefore liable to be set aside and it is so ordered.
[22] I am mindful however, of the fact that the 1st Respondent concedes in paragraph 7.2 of his replying affidavit that on 23 May 2016 when the default judgment was granted, his liability on the loan agreement was for the sum of E259, 761.59. Quoted below is the concession made by the 1st Applicant:
7.2 In my submission my liability only extends to the 23rd May, 2016 when the 1st Respondent was granted judgment by default which is a sum of E259, 761. 59 (Two Hundred and Fifty Nine Thousand Seven Hundred and Sixty One Emalangeni Fifty Nine Cents) as per the statement, annexure “DM4”. (own emphasis)
[23] Any shortfall or overpayment that may have occurred is to be rectified in accordance with order 27.3 below.
Costs of suit
[24] Under clause 11 of the loan agreement, provision is made for the payment of all legal and related costs. Clause 11.4 provides as quoted below:
11.4 All fees will be calculated on an attorney and own client scale.
[25] It was on the basis of the above quoted provision that this court granted costs on the application for default judgment, in favour of the 1st Respondent, at attorney and own client scale. In casu, the Applicants have prayed for costs at attorney and own client scale while the Respondents, in their heads of argument, seek costs at the ordinary scale.
[26] On the basis of the agreed clause 11 of the loan agreement, I am not disinclined to award costs at the punitive scale of attorney and own client.
[27] The following orders are therefore issued:
27.1 The notice of sale of Portion 72 (a portion of Portion 30) of Farm No.75 situate in the Hhohho District, Kingdom of Eswatini, bearing High Court stamp dated 12th March 2018 is hereby set aside.
27.2 The 1st Respondent is ordered and directed to furnish the 1st Applicant or his attorneys of record with an up-to-date statement of account in respect of the loan agreement entered into in July 2014. The statement must be inclusive of monies realized from the public auction of Portion 48 of Farm 1209 situate in the District of Hhohho, Kingdom of Eswatini.
27.3 Under further and/or alternative relief, the parties, with the assistance, advice and guidance of their attorneys of record, are to engage each other and agree on the settlement of any amount that may still be owing and due to either party.
27.4 Costs are granted in favour of the Applicants at the agreed clause 11.4 of the loan agreement, viz., at attorney and own client scale.
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T.L. DLAMINI
JUDGE – HIGH COURT
For Applicants : Mr. V. Thomo
For Respondents : Mr Z. Jele
