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[2016] ZAGPJHC 160
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Investec Bank Limited v Maruarona and Another (14412/2014) [2016] ZAGPJHC 160 (19 April 2016)
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
no:
14412/2014
DATE:
19 APRIL 2016
In
the matter between:
INVESTEC
BANK
LIMITED
.................................................................................................
Applicant
And
MARUARONA:
SHIBISHI
SAMUEL
.......................................................................
First
Respondent
LUJABE
–
CHITEPO:
MATSHELISO
.................................................................
Second
Respondent
JUDGMENT
KATHREE-SETILOANE
J:
[1]
In this application, Investec Bank Limited (“the applicant”)
seeks:
(a)
Judgment against the first respondent in
respect of a debt arising out of a loan agreement under account
number 2……,
which was entered into between the
applicant and the first respondent on 26 September 2008 (“the
first loan agreement”);
(b)
Judgment against the second respondent as
surety for the first respondent’s indebtedness arising from the
first loan agreement;
(c)
An order declaring an immovable property
owned by the first and second respondents executable for the
indebtedness under the first
loan agreement in terms of a mortgage
bond registered in favour of the applicant on 27 November 2008; and
(d)
Judgment against the first respondent in
respect of a debt arising out of a loan agreement under account
number 2……….,
which was entered into between the
first respondent and the applicant on 19 April 2011 (“the
second loan agreement”).
[2]
It is common cause that the National Credit Act 34 of 2005 (“the
NCA”) is applicable to the two loan agreements
which were
entered into between the parties.
[3]
The act of default relied upon by the applicant at the hearing of the
application as well as in its heads of argument is that
the first
respondent purportedly abused the applicant’s systems to
generate forged documents, which he then used to commit
fraud by
representing to a third party that payment had been made to such
third party. However, in its founding affidavit the act
of default
which it relied upon was that the first respondent was in arrears in
respect of the mortgage loan agreement.
[4]
It bears mention that should it be found that the first respondent is
in default of the first loan agreement, then he would
automatically
be in default of the second loan agreement as clause 4.3.2 of the
second agreement makes it an event of default for
the borrower to
breach any other agreement entered into with the applicant.
[5]
The first respondent denies that he has engaged in the fraudulent
conduct relied upon by the applicant. In relation to the allegation
that he was in arrears in respect of the mortgage loan agreement, the
first respondent contends that he had, subsequently to the
acceleration of the indebtedness under the loan agreements, paid the
applicant all amounts that are overdue and, therefore, in
terms of s
129(3) (a) of the NCA, he is entitled to continue making payments of
the instalments under the agreements as they have
been reinstated. He
accordingly submits that there is no basis for the applicant to claim
payment of the accelerated indebtedness
on the two loan agreements.
[6]
Section 129(3) (a) of the NCA provides:
‘
Subject
to subsection (4), a consumer may
at any
time before the credit provider has cancelled the agreement
re-instate a credit agreement that is in default by paying to
the
credit provider all amounts that are overdue
,
together with the credit provider’s permitted default charges
and reasonable costs of enforcing the agreement up to the
time of
re-instatement (emphasis added).’
[7]
It is common cause that the loan agreements have not been cancelled
and/or terminated by the applicant, and that the applicant
is
claiming specific performance. Importantly in this regard, the
applicant’s s129 Notices in relation to both the first
and
second loan agreements state:
‘
Please
note that
you are entitled, at any time
before termination of the credit agreement to re-instatement of the
credit agreement by paying all
amounts that are overdue
,
together with Investec’s permitted default charges and the
reasonable costs of enforcing the credit agreement up to the
time of
re-instatement .’ (emphasis added).
[8]
The first respondent alleges, in its answering affidavit, that as at
July 2014, he had paid all the outstanding arrears to the
applicant
in respect of the first loan agreement in the amount of R207 000.00.
The Applicant disputes this in its replying
affidavit.
[9]
The first respondent further contends that the payment of all the
outstanding arrears reinstated the mortgage loan agreement
by
operation of law - as envisaged by s 129(3) of the NCA. The Applicant
disputes that the aforementioned payments reinstated the
mortgage
loan agreement in terms of s 129(3) of the NCA. The applicant argues,
in this respect, that mortgage loan agreement is
not capable of
reinstatement in terms of s129 (3) of the NCA, because the act of
default which it relies upon is the fraud perpetrated
by the first
respondent as against itself, and not the first respondent’s
failure to make payment of instalments and other
amounts due to the
applicant in terms of the first loan agreement in full. The
contention thus advanced is that s 129(3) has no
application to the
current dispute, because the default relied upon is an act of fraud
as opposed to the failure to pay timeously
and in full. I
disagree as there is simply no juridical basis for interpreting s
129(3) of the NCA in this narrow manner.
[10]
Furthermore, on consideration of the applicant’s founding
affidavit, it is quite clear that the breach which it relied
upon to
claim the accelerated payment of the full amount outstanding in terms
of the first loan agreement, was the first respondents’:
‘
failure
to make payment of instalments and other amounts due to the Applicant
in terms of the first loan agreement timeously and
in full and, as at
24 January 2014, [he] was in arrears in this regard in the sum of
R112 762.42.
In
consequence thereof, the full amount outstanding in terms of the
first loan agreement immediately became due and payable by the
First
Respondent and consequently by the Second Respondent as surety.
The
First Respondent accordingly and by reason of such failure and breach
of his obligations with respect to the first loan agreement,
similarly committed a breach of the second loan agreement.’
[11]
That this was indeed the act of default upon which the applicant
relied to claim payment of the total amount owing under the
first
loan agreement is evident from its s 129(1) notice, dated 3 February
2014, wherein it states as follows:
‘
We
are instructed that you have failed to make punctual payment of your
instalment in terms of the above credit agreement and that
accordingly your account is in arrears in the sum of R112 762.42, due
as at 24 January 2014.
The
above constitutes a breach of the terms and conditions of the credit
agreement and entitles Investec to claim payment of the
capital
amounts outstanding and all interest accrued thereon together with
all other amounts payable.’
[12]
Although the applicant makes extensive reference in its founding
affidavit to an act of fraud purported to have been committed
by the
first respondent, it does not rely upon that act to found its claim
for breach of the terms and conditions of the first
loan agreement.
In a belated attempt to remedy the position, the applicant seeks for
the first time, in its replying affidavit,
to rely upon the purported
act of fraud to found the first respondents breach when it states:
‘
The
First Respondent’s fraud is accordingly highly relevant to
these proceedings as it constitutes a breach of the terms of
the
first loan agreement and, by virtue of the cross default provisions
contained in the second loan agreement, it also constitutes
a breach
of the terms of the second loan agreement.’
[13]
It is generally impermissible for an applicant to seek to make out
its case in its replying affidavit (
Director of Hospital Services
v Mistry
1979 (1) SA 626
(A) at 635H-636B;
SA Railways
Recreation Club and Another v Gordonia Liquor Licensing Board
1953 (3) SA 256
(C) at 260). The applicant has, in my view,
quite clearly failed, in its founding affidavit, to found its claim
for breach
of the first loan agreement on fraud, and it cannot
therefore rely on that ground to claim the full outstanding payment
on the
first and second loan agreements. In any event, and in so far
as the applicant relies on clause 8.18 of the first loan agreement
to
found its claim for breach on the act of fraud purportedly committed
by the first respondent, clause 8.18, in my view, simply
does not
support its case. Clause 8 of the mortgage bond entitled “Default”
provides:
‘
Should:-
8.1.1
the borrower fail to pay any amount payable in terms of this
agreement timeously or in full;
…
8.1.8
the borrower fail to comply with the provisions of the
Companies Act or the
Close Corporations Act No 69 of 1984
, if
applicable, or any other law, or should the borrower be arrested on
suspicion of a failure to comply with any law or should
the
borrower’s auditor or accounting officer report that a material
irregularity has taken place;
…
then
and in such event:-
8.1.12
the Total Amount shall, without any further action by either party,
be immediately due and payable,
subject
to the borrower’s right to reinstate the agreement in
accordance with
Section 129(3)
of the NCA (if the NCA applies).
(emphasis added).’
[14]
Clause 8.1.8 of the first loan agreement is of no application in the
current matter, as the first respondent has not failed
to comply with
the Companies Act or the
Close Corporations Act or
any other law.
Neither has he been arrested on suspicion of a failure to comply with
any law, nor has his auditor or accounting
officer reported that a
material irregularity has taken place. More importantly clause 8.1.12
expressly makes any of the acts of
default referred to in clause
8.1.1 to 8.1.11 subject to the borrower’s right to reinstate
the agreement in accordance with
s 129(3)
of the NCA.
[15]
The question concerning whether the arrears on the two loan
agreements have been paid in full by the first respondent, and
whether the loan agreements have by virtue thereof been reinstated,
can be answered with reference to the payment reconciliation
as at 1
November 2015, which was handed up to court during argument by the
applicant. It is clear from this payment reconciliation
that the
first respondent had made payment of all arrears outstanding on the
first loan agreement. However, in respect of
the second loan
agreement the arrears outstanding were R6160.00. As submitted
by counsel for the first respondent in argument,
the first respondent
was not aware of the arrears outstanding on the second loan agreement
as at 1 November 2015, as due to the
litigation he was not receiving
statements from the applicant. This was common cause. The first
respondent, however, undertook
to make payment of the outstanding
amount immediately after the hearing.
[16]
It is abundantly clear that at all material times, the first
respondent had the intention to reinstate the first and second
loan
agreements and to continue with making instalment payments on them.
The first respondent’s arrears on both loan agreements
are
currently paid up and he has, therefore, reinstated the first and
second loan agreements in terms of
s 129(3)
of the NCA.
In
the premises, the first and second loan agreements have been
reinstated by operation of law. It is, accordingly, impermissible
for
the applicant to claim any “acceleration” of the full
amount owing on these loan agreements (
Nkata
v Firstrand Bank
2014 (2) SA 412
(WCC)
paras 37 and 38).
[16]
In the result, I make the following order:
1.
The application is dismissed with costs.
F
KATHREE-SETILOANE
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Counsel for the
applicant: Ms D Fisher SC
Instructed by:
Du Toit – Sanchez – Moodley Inc
For the first and
second respondents: Mr E Xavier
Instructed by:
Biccari Bollo Mariano Inc
Date of hearing:
19 November 2015
Date
of Judgement: 19 April 2016