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[2014] ZAGPJHC 423
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Miracle Mile Investments 67 (Proprietary) Limited and Another v Standard Bank of South Africa Limited (2013/22057) [2014] ZAGPJHC 423; 2016 (2) SA 153 (GJ) (11 December 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO.:
2013/22057
DATE:
11 DECEMBER 2015
In
the matter of:
MIRACLE
MILE INVESTMENTS 67 (PROPRIETARY) LIMITED
......................
First
Applicant
PRESENT
PERFECT INVESTMENTS 116
(PROPRIETARY)
LIMITED
.....................................................................................
Second
Applicant
And
THE
STANDARD BANK OF SOUTH AFRICA
LIMITED
.............................................
Respondent
JUDGMENT
GAIBIE,
AJ
[1]
The principle debt in this matter arose
from an agreement concluded between Mr N.C. Papachrysostomou
(“Nicolas”) and
the respondent (“the Bank”).
In terms of that agreement Nicolas was granted a “liberator
facility”,
pursuant to which an account was opened for him in
the books of the Bank and a line of credit was granted to him to the
maximum
amount of R13,984,600.00. In terms of the facility, the
Bank undertook, during the currency of the agreement, to disperse
and
pay out or lend and advance sums of money on behalf of Nicolas and it
would for that purpose debit his account with such sums.
It was
a requirement of the facility that Nicolas’ debt to the Bank be
secured by collateral or suretyships. In the
circumstances both
applicants executed suretyships in favour of the Bank and they
registered twelve (12) bonds as security pursuant
to the suretyships
signed by them.
[2]
In turn, Nicolas: agreed to pay the
principle debt with interest in 240 monthly instalments; accepted
that the Bank would be entitled
to levy its usual and customary
charges and to debit his account with such charges; and accepted
liability to pay for all legal
costs and expenses which the Bank may
incur in connection with the enforcement of its rights in terms of
the agreement.
[3]
For their part, the applicants bound
themselves as sureties and co-principle debtors
in
solidum
with Nicolas for the due and
punctual payment of any sum then or thereafter owing by him to the
Bank. In executing
the deeds of suretyship, the
applicants were represented by Nicolas and by his wife to whom he was
married out of community of
property.
[4]
Following the conclusion of the agreement,
the execution of the deeds of suretyship and the registration of the
mortgage bonds,
Nicolas overdrew the account and in consequence
thereof he was indebted to the Bank in the amount of approximately
R7.4million
on 21 October 2008 (‘the decisive date’).
[5]
It was common course that Nicolas did not
draw on the liberator facility nor did he make any payments to the
Bank in consequence
of the facility after the decisive date.
Because no payments were made after the decisive date and the Bank
failed to take
action against Nicolas for a period in excess of 3
years, the applicants contend that the debt owed by Nicolas to the
Bank was
extinguished by prescription. Consequently they
submit, that the accessory debts owed by them as sureties for
Nicolas’
facility have also been extinguished by prescription.
On the applicants version, Nicolas’ debt to the Bank prescribed
on 22 October 2011 by virtue of the provisions of section 11 of the
Prescription Act, No. 68 of 1969 (the Act).
[6]
In opposing this application, the Bank
raised several arguments in relation to when prescription in such
matters commence running;
whether the debt is subject to a three year
or thirty year prescription period; whether prescription was
interrupted; and whether
it would be more convenient to deal with
these issues in its action proceedings launched after this
application. I deal with
each of these arguments in the
paragraphs below.
When
does prescription begin to run?
[7]
The Bank contends that the liberator
facility granted to Nicolas was not a mere overdraft facility but was
an enhanced facility
payable in monthly instalments for 240 months
commencing in August 2005. According to the Bank, repayments
were not due on
the date of any particular advance but in monthly
instalments over the duration of the agreement. Consequently,
it contends,
that the failure to pay a particular monthly instalment
did not automatically accelerate the balance of the debt or render it
immediately
due and payable. However, the facility granted to
Nicolas entitled the Bank to convert the facility to one repayable on
demand
if he failed to pay any instalment due in terms of the
agreement and if he did not remedy this failure within 7 days of
written
notice given to him by the Bank to do so. A failure to
remedy the breach would also entitle the Bank to terminate the
facility
and claim immediate payment of the outstanding balance.
It is the Bank’s case that no such notice was given to Nicolas
and therefore the amount due in terms of the facility did not become
payable. In the circumstances, they submit that prescription
did not commence running and could only commence once the notice was
given.
[8]
The Bank did however send a letter of
demand, or a notice, to Nicolas to remedy his breach in August 2008.
The demand was
only in respect of the arrears outstanding at that
point. Despite the fact that Nicolas failed to remedy the
breach, the
Bank did not terminate the facility or claim immediate
payment of the outstanding balance. For its part, the Bank
contends
that the amount owing remained payable in monthly
instalments and that prescription could only commence running at the
point at
which it exercised its rights in terms of clause 12.2 of the
terms and conditions of the liberator facility.
[9]
Clause 12 deals with issues of default and
the circumstances of any termination of the facility. It
provides as follows:
“
12
Default and termination
12.1
We will not be obliged to make any advance or re-advance under the
facility and/or we may convert
the facility into one repayable on
demand and/or we may revise any of the terms and conditions of the
facility and/or increase
the interest rate charged if any of the
following events occur:
12.1.1
you breach any of the terms and conditions of this facility or any
other agreement between us and
you fail to remedy this breach within
7 days of a written notice having been given to you to do so;
12.1.2
you fail to pay any instalment due in terms of this agreement and you
do not remedy this failure
within 7 days of written notice having
been given to you to do so;
…
..........
12.1.5
a provisional or final order is passed placing you or any surety:
12.1.5.1
under sequestration;
12.1.5.2
in liquidation or under judicial management; or
12.1.5.3
any comprise or arrangement between you or your creditors or any
surety and its creditors
is sanctioned or otherwise becomes
effective;
..............
12.2
In any of the events envisaged in 12.1, we shall have the right
without prejudice to any other rights or remedies available to us,
to
terminate the facility and claim immediate repayment of the
outstanding balance by giving written notice. It may be
effective
immediately or from a date stated in the notice
[my
emphasis]. If the facility is cancelled any amounts owing to us
become payable:
12.2.1
immediately, if stated in the notice, or
12.2.2
on the dates stated in the notice”.
[10]
Based on the above clauses, and
particularly clause 12.2, the Bank argues that the termination of the
facility and a claim for immediate
payment of the balance by notice
in writing is a pre-requisite for the acceleration of the balance of
the indebtedness. Given
that no such notice in writing was
given to Nicolas at any material time, the debt or its prescription
could not commence running.
According to the Bank, the debt
remained payable in monthly instalments for the balance of the term
of 240 months.
[11]
In order to determine whether or when
prescription in this matter began to run, if at all, it is necessary
to examine various provisions
of the Act, as well as the relevant
principles that have emerged from our jurisprudence.
[12]
Section 12(1)
of the
Prescription Act
provides
that:
“
Subject
to the provisions of sub-sections 2 and 3, prescription shall
commence to run as soon as the debt is due”.
[13]
Section 11 of the Act provides:
“
The
periods of prescription of debts shall be the following:
(a)
Thirty years in respect of –
(i)
any debt secured by mortgage bond;
.............
(d)
Save where an act of Parliament provides
otherwise, three years in respect of any other debt”.
[14]
Whether the debt incurred by Nicolas in
terms of the liberator facility became prescribed, depends on whether
the debt became ‘due’
within the meaning of that word in
section 12(1) of the Act. If the debt became due from the date
of Nicolas’ default
on or about the decisive date, prescription
would have commenced running from that date and the Bank’s
claim would have prescribed
on 22 October 2011. In other words,
the debt would have prescribed prior to the launch of this
application by the sureties
(on 21 May 2013), and prior to the Bank’s
institution of an action for the recovery of the debt against the
sureties and
Nicolas (on 27 August 2013).
[15]
The
words “debt is due” in section 12(1) is not defined in
the Act. In the circumstances, it is necessary to examine
the
jurisprudence in relation to this issue. Dealing with the
interpretation of that phrase, the court in
Deloitte
Haskins and Sells Consultants (Pty) Limited v Bowthorpe Hellerman
Deutsch (Pty) Limited
[1]
,
held
that for prescription to commence running “there has to be debt
immediately claimable by the debtor or stated in another
way that
there has to be a debt in respect of which the debtor is under an
obligation to perform immediately............. It follows
that
prescription cannot begin to run against a creditor before his cause
of action is fully accrued, ie before he is able to pursue
his
claim”
[2]
.
[16]
The Bank’s contention is that
prescription cannot commence running in respect of a loan repayable
in instalments simply because
one or more instalments are not paid.
They submit that the enquiry is whether the failure to pay any
particular instalment
accelerates the debt, and renders the full
balance due. That, in turn, they submit depends on the terms of
the contract in
issue. In that regard they rely on various
academic articles which explain the merits of such an approach.
By way of
example,
Christie in the Law
of Contract in South Africa 6
th
Edition
explains the position as
follows at page 436:
“
If
the contract contains an acceleration clause making the entire
balance of the debt payable on the debtor’s failure to pay
any
one instalment it will only be necessary to examine the clause
carefully in order to see whether anything in addition to the
debtor’s fault, such as a written demand is required to bring
it into operation.
The
normal acceleration clause does not itself make the balance of the
debt payable but gives the creditor an option to demand it,
so
prescription runs from this demand, not from the debtor’s
failure to pay the instalment.”
[17]
Christie’s
approach is similar to that adopted in an article in the 1973 Annual
Survey of SA Law at page 72 in relation to
a survey of the decision
in
Orton
v Barhouch
[3]
.
The author of the article, McLennan, criticised that decision and
took the view that each instalment gives rise to a separate
cause of
action as and when it falls due for payment and that prescription
cannot begin to run until the particular instalment
falls due for
payment. He contended that there may be many good reasons why a
creditor, who has an option, should decide
not to enforce an
acceleration clause. It might be to the advantage of the
creditor not to interfere with the payment arrangements
where, for
example, the debt is secure and carries a high rate of interest.
He also submits that it seemed anomalous that
such a creditor should
be held disentitled to recover later instalments. This article,
and by implication Christie’s
approach, was considered by the
Court in
Western
Bank Limited
v
SJJ Van Vuuren Transport (Pty) Limited
[4]
.
In response to that argument the Court cited with approval the
judgment of Van Den Heever J in
Hamilton
Plase (Edms) BPK v Stadler
[5]
,
who
gave the judgment of the full Court in that matter with the other
members of Court concurring and in resounding fashion responded
to
the issues raised by McLennan in the following terms:
“
......
By ‘n transaksie soos die onderhawige is daar geen sprake van
‘n keuse tussen onversoenbare moontlike vorderingsegte
nie.
Eiser het geen keuse om uit te oefen in die sin van besluit wat hy
wil vorder nie. Hy het slegs die reg om betaling
to vorder van
die kapitale bedrag aan hom verskuldig. Sy ‘keuse’
is slegs aangaande wanneer om op te tree: by
eerste kontrakbreuk of
te wag tot ‘n latere stadium; en dit is ‘n ‘keuse’
wat aan iedere kontraktant beskikbaar
is – waardeur hy dan ook
sou hy te lank wag die risiko van verlies van sy vorderingsreg
mettertyd loop tensy hy sorg dat
verjaring gestuit word.
Lex
subvenit vigilantibus non dormientibus
.
Dit is na my mening ook die antwoord op die kritiek van McLennan in
die 1973 Annual Survey te 72 op Orton v Barhouch
1973 (2) SA 565
(D)
wat, met eerbied, korrek beslis is.”
[6]
[18]
In support of Van Den Heever J’s
approach, Melamet J in
Western
Bank
concluded that:
“
I’m
in agreement with the reasoning of the learned Judge and am of the
opinion that it is of application to the case under
consideration
herein. It is true that the plaintiff in the present case need
not have taken any action when the breach first
occurred but the
question is not when did he decide to take action but when did the
right to take action first accrue and it is
clear that the right to
claim the balance of the rentals owing under the lease accrued in
September 1971 when the first default
occurred. I’m of
the opinion that the contract does not provide that the right to
claim such balance of the rentals
only arose when the lessor
decided to claim but arose immediately on default when the payment of
rental which was due”.
[7]
[19]
While
there is merit in the argument raised by academics such as McLennan
and Christie, case law and jurisprudence point to a markedly
different approach
[8]
. If
the Bank was entitled to accelerate payments and claim the full
amount but failed to do so, this does not, according
to the
jurisprudence prevent prescription from running. Prescription
runs from the date that the Bank had the right to enforce
payment of
the full amount due to it even though it did not do so and was
prepared to wait longer.
[20]
To
adopt the approach suggested by the Bank, would mean that the Bank
could effectively delay prescription from running depending
on
whether or not it issued a written notice requiring the remedy of a
breach or indeed confirmation of the termination of the
facility and
the immediate claim for repayment of the outstanding balance.
In this way prescription would be dependent on
the Bank’s
election and communication to Nicolas, rather than on an
interpretation of the provisions of section 11 and section
12 of the
Act
[9]
.
Prescriptive
period 30 year or 3 years?
[21]
The Bank contends that the applicable
period of prescription is 30 years because the period of prescription
of a debt secured by
a mortgage bond is 30 years in terms of section
11 of the Act. According to the Bank, Nicolas’ debt was
secured by
both the suretyships and also the mortgage bonds passed or
transferred in terms thereof. In terms of the suretyships, so
the argument continues, the applicants are not only sureties for
Nicolas debt but also co-principle debtors. Consequently,
the
mortgage bonds have been incorporated into the terms of the liberator
facility agreement and are not severable therefrom.
In
substance, the Bank submits that the indebtedness of the applicants
has therefore become merged with that of Nicolas under the
facility
and the liability of the applicants as sureties and mortgages has in
that sense lost its accessory character. Consequently
they
argue that the prescriptive period is 30 years, and not 3 years.
[22]
In light of this argument it is necessary
to return to the terms of the liberator facility, and in particular
to ‘the letter
of grant’, which together with the
agreement and the terms and conditions governed the nature of the
facility granted to
Nicolas. Clause 3 of the letter of grant
provided as follows:
“
3.
Using the facility
Use
of the facility in full or any portion of the facility is subject to
you having:
3.1
provided us with a collateral called for in 4 below; and
3.2
signed and returned the duplicate of this letter of grant and the
attached terms and conditions of liberator facilities”.
[23]
In paragraph 4 of the letter of grant the
collateral held in relation to the grant is set out in numerous and
successive paragraphs
but the distinction between the principal debt
and the collateral in support of that debt is clear. Consider
for example:
(a)
Paragraph 5 of the letter of grant which is
entitled – “
Disclosure of
principal debt
(in terms of the Usury Act No. 73 of 1968)”.
“
The
maximum cash amount actually received or which will be received by
you on your behalf is not known or determinable but will
not at any
given time exceed the amount of this facility.
Initially
the
principal debt
will be made up of the following:
The
facility amount paid to you / on your behalf : R13,984,600.00
Costs
of registering the bond: R 24,712.00
Initial
principal debt
:
R14,009,312.00
Other
costs (inclusive of VAT): R
Property
assessment fees: R 30,000.00
Minimum
monthly instalment
The
principal debt
with interest is repayable in 240 monthly
instalments. Your initial minimum monthly instalment is made up
of the following:
Monthly
instalment: R119,157.97
Total
initial monthly instalment:
R119,157.97
[my
emphasis]
(b)
In paragraph 9 of the letter of grant the
primary obligation of Nicolas for the purposes of repayment is
specifically stated in
the following terms:
“
The
interest payable by you is calculated on a daily basis on the
outstanding balance, is charged monthly on the last day of the
month
and is due and payable immediately. Any interest which is
unpaid on the due date, will be capitalised on that date.”
[24]
It is accordingly apparent from the terms
of the letter of grant and from Nicolas’ obligations
articulated in that letter
that the suretyships and the mortgage
bonds were collateral for the principal debt offered to Nicolas by
the Bank. In the
circumstances, and in the absence of the
principal debt, neither the suretyships nor the mortgage bonds would
have existed.
The applicants registered the bonds of security
for their obligations as sureties and co-principal debtors.
They clearly
therefore did not undertake a separate independent
liability as a principal debtor and their debt remained accessory to
the principal
debt. The bonds that were passed, were
essentially passed to secure their liability and to secure the
liability of
Nicolas as the principal debtor. In the
circumstances, the prescriptive period of Nicolas’ debt
therefore remains three
years in terms of section 11 of the Act.
[25]
In
Kilroe-Daley
v Barclays National Bank Ltd
[10]
,
the
Appellate Division as it then was, dealt with similar facts as exist
in this matter with regard to the position of sureties.
In that
matter Kilroe-Daley signed a document in terms of which she bound
herself as surety
in
solidum
and co-principal debtor for all debts or other obligations of
whatever nature both present and in future from whatever cause
arising
which may be or become due, owing or payable by the relevant
company. In order to secure her indebtedness to the bank
arising
out of the suretyship agreement, she hypothecated immovable
property that was registered in terms of a deed of transfer to the
bank under a mortgage bond. In relation to her liability to the
bank, the Appellate Division, said the following:
“
The
liability which she undertook is set out in para 8 of the
declaration. She bound herself as surety and co-principal
debtor.
It is correct that a contract of suretyship is a
separate contract from that of the principal debtor and his
creditor. It
is, however, accessory to the main contract”
[11]
[26]
The Appellate Division also cited with
approval the following dicta in
Union
Government v Van Der Merwe
1921 TPD 318
at 321
where
Wessels JP said:
“
The
legal scope of the surety’s contract is identical with that of
the principal debtor –
accessorium
sui principalis naturam sequitur
.
The surety undertakes the same obligation as the debtor, and
undertakes to perform the same obligation so soon as the debtor,
when
called upon, fails to perform it… It is true there are
two contracts, the one between the creditor and the debtor
and the
other between the creditor and the surety. But the contract
between the creditor and the surety is not an independent
contract
with an obligation of its own but an accessory contract with the very
same obligation that exists between the principal
debtor and the
creditor. Although it is true that the surety contract may be
entered into by an agreement different to that
of the principal
contract, yet immediately the surety agrees to become such, whether
by a written or a verbal agreement, then his
contract with the
creditor is of the same nature as that of the principal debtor,
because it becomes accessory to it, or is, as
it were, absorbed by
it.
[12]
”
[27]
In
the circumstances, the Appellate Division in
Kilroe-Daly
concluded that a surety and co-principal debtor does not undertake a
separate independent liability as a principal debtor and that
the
addition of the words, “co-principal debtor” does not
transform his contract into any contract other than one of
suretyship
[13]
.
The consequences of this approach means that if the principal debt
became prescribed or for any other reason ceased
to exist, then the
surety’s debt also became prescribed and ceased to exist
[14]
.
In the circumstances, the prescriptive period of Nicolas’ debt
therefore remained 3 years.
Another
bond
[28]
The Bank contends that the prescriptive
period was thirty years because it granted a further loan to Nicolas
for the acquisition
of a property known as section 88 Avignon
Lonehill, Ext. 88 which was purchased on a sectional title basis and
measured 78 square
metres in area. The purchase price of the
home was R639,000.00 and the Bank registered a bond by Nicolas in the
amount of
R575,100.00 to finance the acquisition of the property
during November 2005. The Bank submitted that the bond not only
secured
the home loan but had in its terms also served a continuing
covering security “…
in
respect of existing and future debts arising from any cause
”
including “
money lent and advanced
in the utilisation of any other banking facilities or otherwise
”.
In light of the broad description of the obligations so secured, the
Bank contended that it was wide enough to cover
Nicolas’
indebtedness under the liberator facility. Consequently they
argued that the debt due to the Bank in terms
of the liberator
facility was not only secured by the bonds which formed the subject
of the application before this Court, but
also the another bond which
secured it as well as the home loan. The consequence of this
other bond they suggest, is that
the prescriptive period in respect
of Nicolas’ debt to the Bank is 30 years, and not 3 years.
[29]
The home loan bond was however cancelled
post Nicolas’ sequestration when the property was sold by the
trustees on 13 January
2013. In the circumstances, and until
that date, so the argument goes, the bond served to secure his
indebtedness to the
Bank and precluded the applicants from contending
that the prescriptive period was 3 years, or that it falls to be
measured on
the so called decisive date.
[30]
It
seems to me that there are three fundamental problems with this
submission. First, extinctive prescription applies to the
principle debt and not to the mortgage bond itself and therefore
prescription begins to run when the debt is due
[15]
.
Where the bond is cancelled before payment or performance of the
debt, the 30 year prescription period can no longer be
applicable and
if more than the otherwise shorter prescription period has elapsed
since the due date of the debt, the debt will
become prescribed upon
cancellation of the bond when the operation of the 30 year period
falls away
[16]
.
Secondly, and perhaps more fundamentally, where the bond is
registered in an amount which is insignificant compared to the
principle debt, and in circumstances where it was intended to secure
another debt, it can hardly be argued that the mortgage was
intended
for the much higher principle debt in respect of which specific bonds
were secured.
Interruption
of prescription
[31]
The Bank contends that irrespective of its
submissions set out above, prescription was interrupted by Nicolas’
acknowledgment
of the liberator debt in sequestration proceedings
instituted against him by Firstrand Bank Ltd. Such
acknowledgment they
say was contained in an affidavit that Nicolas
filed in those proceedings on 24 April 2012 in which he sought a
discharge of the
provisional order of sequestration against him.
In annexure “C” to that affidavit he provided a list of
properties
owned by him and the companies in which he was a
shareholder. The list of properties include all of those
properties in respect
of which bonds securing the liberator
indebtedness had been registered. In particular, Nicolas
identified the amount secured
by each such bond and recorded his
indebtedness to the Bank as secured by each such property.
According to the Bank, the
purpose of annexure “C” to his
affidavit was intended to demonstrate that on his version, his total
liabilities amounted
to R13,450,000.00 and that his assets, and in
particular his properties, could be sold for R21,000,000.00 and
consequently that
his assets exceeded his liabilities. In the
body of his affidavit, Nicolas specifically confirmed the liability
to his creditors
in the amount of R13,450,000.00 and this liability,
according to the Bank:
“
.....
plainly includes the amount owed to the respondent in terms of the
liberator facility i.e. as secured by the bonds referred
to in
…annexure C”.
[32]
This proposition is problematic for the
following reasons. First, the Bank was not a party to the
sequestration proceedings
and any “acknowledgment”
insofar as it may be contended was made by Nicolas in his affidavit,
or in annexure “C”
thereto, was not made to the Bank but
to Firstrand Bank who launched the sequestration proceedings.
Such an acknowledgment
cannot interrupt prescription in relation to
the debt that emanated from the liberator facility for the reasons
advanced by Loubser:
“
The
acknowledgement of liability must be made by the debtor himself or
his authorised agent; it must be made to the creditor
himself
or his agent. The running of prescription is therefore not
interrupted where the debtor acknowledges liability to
a person whom
he believes, through a mistake of law, to be the creditor.
Likewise an undertaking to refund the amount of
the debt to the
creditor, where the undertaking is given to a third party who does
not act as the creditor’s agent does not
interrupt
prescription”
[17]
.
[33]
In
terms of section 14(1) of the Act, “the running of prescription
shall be interrupted by an express or tacit acknowledgement
of
liability by the debtor”. The phrase “acknowledgment
of liability” is not defined in the Act and in
the absence of
any clear indications to the contrary, the section must be
interpreted in light of the current jurisprudence.
In
Pentz
v Government of the Republic of South Africa
[18]
and
Markham
v South African Finance and Industrial Co Ltd
[19]
1962,
the Appellate Division indicated that the words “
acknowledgement
by the debtor
”
in section 14(1) should be construed as meaning an acknowledgment to
the creditor or his agent.
[34]
Secondly,
it is not clear from Nicolas’ affidavit in the sequestration
proceedings that there is an explicit acknowledgement
of his
indebtedness to the Bank. At best, for the Bank, annexure “C”
to his affidavit indicates that the Bank
is the bond holder of the
bonds held in relation to the properties identified therein. No
mention is made of the liberator
facility or of the amount of the
debt owed to the Bank in respect thereof. Even if my
interpretation is incorrect, and the
Bank’s interpretation that
the reference to these properties must by implication mean his
indebtedness in relation to the
liberator facility, then the
acknowledgment was made in 2012 after the debt had prescribed in
2011. I accordingly agree with
the applicant’s contention
that the acknowledgment, if any, must refer to an existing liability
and not to a liability which
existed in the past. In other
words, if the acknowledgment is made after the prescription period
has elapsed, the acknowledgment
has no effect and cannot interrupt
the running of prescription in terms of section 14(1) of the Act.
The acknowledgment,
if any, by Nicolas which is relied upon by the
Bank was made after the debt had already prescribed. This view
is also supported
by:
Loubser:
Extinctive Prescription
[20]
;
Lipshitz v Dechamps Textiles, GMBH & Another
[21]
;
Mostert v Mostert
[22]
;
Grey v Southern Insurance Association Limited
[23]
;
Vilakazi v National Employers General Insurance Company Limited
[24]
.
The
launch of an action
[35]
The final issue raised by the Bank,
although it was not pursued in argument, was that it had now launched
a summons or an action
in relation to the outstanding debt which
emanated from the liberator facility and that in the circumstances it
would be convenient
to hear the action and the application
simultaneously as both will traverse the same factual and legal
issues. However, the facts
in this matter were not disputed and the
only issue in dispute was in relation to the applicable law. In
any event, the summons
was issued after the application, and the law
in my view is a matter that has been determined in terms of this
judgment.
If anything it is more convenient to dispose of this
matter in the context of this application given that the facts are
common
cause.
Order
[36]
In the circumstances, and after hearing the
parties in this matter, the following is ordered:
1.
The Respondent is ordered to consent in
writing that the following mortgage bonds be cancelled:
For
the first Applicant:
a.
SB025500/05 ST22690/2005 196
SS LONEHILL VILLAGE ESTATE,116
b.
SB055095/05 ST50794/2005 188
SS LONEHILL VILLAGE ESTATE,116
c.
SB061707/06 ST48595/2006
96 SS TINZA LIFESTYLE ESTATE,317
d.
SB099244/06 ST77777/2006
132 SS TINZA LIFESTYLE ESTATE,488
e.
SB178920/06 ST142354/06
246 SS TINZA LIFESTYLE ESTATE,998
f.
SB178942/06 ST142381/06
272 SS TINZA LIFESTYLE ESTATE,998
g.
SB178961/06 ST142402/06
296 SS TINZA LIFESTYLE ESTATE,998
h.
SB181185/06 ST144193/06
82 SS SIBITI PRIVATE ESTATE, 1013
i.
SB107768/05 ST97533/05
80 SS LONEHILL VILLAGE ESTATE,116
For
the second Applicant:
j.
SB31249/04 ST046531/03 62 SS SHIMBALI
SANDS, 274
k.
SB31632/03
l.
SB106279/03;
2.
That the cancellation of the bonds listed
in paragraph 1 above occur without demanding payment of any sum from
the Applicants;
3.
The required consent shall be given by the
Respondent, within a period of 7 days from the date of this order,
failing which the
Sheriff of this court be authorised and directed to
furnish the required consent;
4.
That the Respondent pays the costs of this
application including the cost of senior counsel.
GAIBIE
AJ
Date
of Hearing: 28 October 2014
Date
of Judgment: 11 December 2014
Appearances:
For
the Applicants: Adv. J.F. Roos SC
Instructed
by: HJ Moller Attorney
Tel:
(011) 022 6142
Fax:
086 563 3084
Email:
hjmoller@hjmoller.co.za
For
the Respondent: Adv. S Symon SC with X Stylianou
Instructed
by: Ramsey Webber Attorneys
Tel:
(011) 778-0600
Fax:
(011) 778-0677
Email:
wdb@ramweb.co.za
Ref:
Werner De Beer / Chalene Bronkhorst
[1]
[1990] ZASCA 136
;
1991
(1) SA 525
(A) at 532G-H
[2]
This
interpretation is supported in Western Bank Limited v SJJ Van Vuuren
Transport (Pty) Limited & Others
1980 (2) SA 348
(T), and in
Santam v Ethwar 1999 (2) SA 244 (SCA).
[3]
1973
(2) SA 565
(D) at 570.
[4]
1980
(2) SA 348
(T) at 352.
[5]
1977
(3) SA 361 (NC).
[6]
Fn
4 at pg 353.
[7]
Fn
4 at pg 353.
[8]
Hamilton
Plase (Pty) Ltd. V Stadler
1977 (3) SA 361
(NC); Western Bank
Limited v SJJ Van Vuuren Transport (Pty) Limited and Others
1980 (2)
SA 348
(T); Bankorp Limited v Leipsig
1993 (1) SA 247
(ECD) at
252.
[9]
Santam
v Ethwar
[1998] ZASCA 102
;
1999 (2) SA 244
at 254.
[10]
[1984] ZASCA 90
;
1984
(4) SA 609
(A).
[11]
Fn
10 at page 622.
[12]
See
also the approval of this approach in Mahomed v Lockhat Bros. and
Company Limited
1944 AD 230
at 238
[13]
At
page 623
[14]
See
Kilroe Daly at page 623; and see Leipsig v Bankorp Ltd 1994 V2
SA 128(a) at page 132
[15]
Loubser:
extinctive prescription, page 38
[16]
Loubser
at page 38; Oliff v Minnie
1953 (1) SA 1
(AD) at 3 C – E; see
also annexure ‘H’ of the pleadings which is the summons
and particulars of claim launched
by the Bank against the applicants
in this matter and Nicolas which was issued on 27 August 2013, after
cancellation of this
further bond.
[17]
Loubser:
Extinctive Prescription, at page 139.
[18]
1983
(3) SA 584 (A.)
[19]
1962
(3) SA 669
(A) at 676F.
[20]
At
140 – 142.
[21]
1978(4)
SA 427 (C) at 430D-G.
[22]
1913
TPD 255
at 260.
[23]
1982
(3) SA 688
at 691F – 692E.
[24]
1985
(4) SA 251
(C) at 256B – 257C.