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Gundwana v Steko Development
Gundwana v Steko Development CC and Others is an important case in South African property law and civil procedure. The Constitutional Court held unanimously that Registrars of the High Court are not constitutionally competent to authorise sales in execution of mortgaged homes when granting a default judgment. In such cases, the determination of executability requires judicial oversight, because it touches on the homeowner's right to housing under section 26 of the Constitution. The judgment was handed down on 11 April 2011 by Justice Johan Froneman. Heavily indebted to the logic of Jaftha v Schoeman, it partly overturned the Supreme Court of Appeal's earlier holding in Standard Bank v Saunderson. BackgroundIn 1995, Elsie Gundwana bought a property in Thembalethu with the assistance of a loan granted by Nedcor Bank (the second respondent) and secured through a mortgage bond on the property. When she fell into arrears in 2003, the Registrar of the High Court granted the bank, by default judgement, an order declaring her property to be executable. The bank did not take further action until 2007, when the property was sold in execution to Steko Development (the first respondent). In April 2008, Steko applied in the George Magistrate's Court for an order to evict Gundwana from the property. The eviction order was granted. Gundwana sought to challenge the eviction order in the High Court, which dismissed the appeal, and then in the Supreme Court of Appeal, which refused leave to appeal. She also applied to the High Court for rescission of the 2003 execution order. Finally, she approached the Constitutional Court of South Africa, applying both for leave to appeal the eviction order and for direct access to challenge the constitutionality of the 2003 execution order. In particular, she challenged section 31(5)(b) of the Uniform Rules of Court, which empowered the High Court Registrar, when ordering default judgment, to declare immovable property to be specially executable. Gundwana's counsel, Anna-Marie de Vos, contended that it was unconstitutional for the Registrar to make such a declaration when it permitted the sale in execution of the home (primary residence) of a person. JudgmentGundwana was granted direct access. Writing on behalf of a unanimous bench, Justice Johan Froneman held that it is unconstitutional for a High Court Registrar to declare immovable property to be specially executable when ordering default judgment under rule 31(5) "to the extent that this permits the sale in execution of the home of a person". Judicial oversight is required in such cases, because the execution of a person's home potentially infringes on the homeowner's right to housing under section 26 of the Constitution. Per Froneman:
The court remitted the matter to the High Court, which would adjudicate Gundwana's application for rescission of the execution order. It also set aside the eviction order and referred the application back to the Magistrate's Court, which would make a determination after the rescission application had been decided in the High Court. ConsequencesThe judgment overturned the findings of the Supreme Court of Appeal in Standard Bank v Saunderson, to the extent that the Supreme Court had found that the registrar was constitutionally competent to make execution orders when granting default judgment in terms of rule 31(5)(b).[1] With effect from 24 December 2010,[2] the Uniform Rules of Court were amended to deal with the consequences of the Gundwana judgment:[3]
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