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[2016] ZAGPJHC 142
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Nedbank Limited v Schoeman N.O and Another (42242/14) [2016] ZAGPJHC 142 (2 June 2016)
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
CASE NO: 42242/14
DATE: 02 JUNE 2016
In the matter between:
NEDBANK
LIMITED
..............................................................................................................
Applicant
And
CHRISTOFFEL ANDRIES SCHOEMAN N.O.
IN HIS CAPACITY AS THE TRUSTEE OF
THE MALUTI
TRUST
................................................................................................
First
Respondent
CHRISTOFFEL ANDRIES
SCHOEMAN
.............................................................
Second
Respondent
JUDGMENT
KRIEGLER AJ:
1.
The
applicant is a registered bank and credit provider in terms of the
company and banking laws of South Africa, and in terms of
the
National Credit Act 34 of 2005 (NCA).
2.
It
claims an order against the respondents jointly and severally as
follows: for payment of the sum of R2 549 615,89;
interest
on that sum at 7.35% per annum from 31 August 2014 to date of
payment; declaring specially executable immovable residential
property described as Erf 1…, N….., Ext 1.. Township,
Gauteng at 9 W… Street N…., Ext 19 (the property);
authorising the registrar of this court to issue a warrant of
execution for the attachment of the property; and attorney and client
costs.
3.
The
second respondent, Mr Schoeman, is a businessman and attorney. He is
cited as the first respondent in his capacity as trustee
of the
Maluti Trust (the trust) with its place of business and chosen
domicilium citandi et executandi
as Office 1…., L…. A….. C….., corner R….
and C…. D….., N…... Mr Schoeman
is cited as the
second respondent in his personal capacity, as surety and
co-principal debtor for the trust’s indebtedness
to the bank.
The trust owns the property. The property’s address
– 9 Winterberg Street – is the second
respondent’s
chosen
domicilium citandi et executandi
and his primary residence.
4.
The
bank’s claims against the trust rely on two written loan
agreements, each incorporated into a first and second mortgage
bonds
registered in its favour by the trust over the property. The
bank relies on a manager’s certificate of balance
and on bank
statements to establish the existence and amount of the indebtedness
claimed under both loan agreements and mortgage
bonds.
5.
Mr
Schoeman deposed to the respondents’ opposing affidavits in his
personal capacity and as (sole) trustee for the trust.
He
admits the trust entered into the first loan agreement with the bank
concluded on 11 March 2005; that it was concluded
on the further
terms of a “mortgage loan agreement” concluded on 13 July
2005; that he represented the trust in so
doing; that the first
mortgage bond was registered over the property; and that the bank
advanced to the trust the amounts of R1 692 000.00
and
R169 200.00 during July 2005 under the first loan agreement.
6.
According
to the bank, the second loan amount and mortgage bond were entered
into on 19 November 2007 and 3 January 2008 respectively;
under the
second loan agreement, as in respect of the first loan agreement and
first bond the trust registered, a second mortgage
bond was
registered over the property in favour of the bank and the trust
(still represented by Mr Schoeman) acknowledged
its indebtedness
to the bank in the sum of R1 305 130.00, plus a further sum
of R327 000.00, repayable by the trust
in monthly instalments
commencing on the first day of the month within 30 days after the day
of the month in which the monies were
advanced; and that these sums
were duly advanced under the second loan agreement and mortgage bond
to the trust in January 2008.
7.
The
bank contends more specifically, based on a certificate of balance,
that the trust’s bond account (a single consolidated
account in
respect of both bonds and both loan agreements) was in arrears
immediately before these proceedings were commenced in
the amount of
R101 320.57, and that the full balance due, owing and payable by
the trust under both loan agreements at the
time was R2 549 615.89,
plus interest on the amount at the rate of 7.35% per annum (as agreed
in both loan agreements)
calculated and capitalised monthly in
advance from 31 August 2014, which despite due demand the trust has
failed to pay.
8.
Mr
Schoeman denies any liability to the trust under the first loan and
bond, alleging the loan advanced has been “fully paid
up”;
he denies the second loan agreement was concluded at all,
including his signature on it; he denies any moneys
were advanced
under (the disputed) second loan agreement; he denies a second bond
was registered over the property; he denies his
signature on the
suretyship and (on that basis alone) denies ever binding himself as
surety or co-principal debtor for or on behalf
of the trust for any
of the amounts claimed. Mr Schoeman further challenges the
certificate of balance on the basis that
it contains a mistake; he
nevertheless alleges the same mistake indicates that the bank “may”
have ceded (“securitised”)
the trust’s indebtedness
to another entity, depriving the bank of its locus standi in these
proceedings. Mr Schoeman
further denies receiving any notice in
terms of s 129 of the NCA of the bank’s claims; and he
alleges the credit was
recklessly extended to the trust in terms of
the NCA, claiming the bank in fact performed no risk assessment on
the trust as consumer.
9.
The
respondents claim in the circumstances there are “genuine”
disputes on these “material” aspects of the
applicant’s
case, “raised in good faith” which they submit cannot be
adjudicated by way of motion and must therefore
be referred to trial,
or justify a dismissal of the application with costs.
10.
In
National
Director of Public Prosecutions v Zuma
[1]
Harms DP said:
“
Motion proceedings, unless concerned
with interim relief, are all about the resolution of legal issues
based on common cause facts.
Unless the circumstances are
special they cannot be used to resolve factual issues because they
are not designed to determine probabilities.
It is well
established under the
Plascon-Evans
rule that where in motion proceedings disputes of fact arise in the
affidavits, a final order can be granted only if the facts
averred in
the applicant’s … affidavits, which have been admitted
by the respondent … , together with the facts
alleged by the
latter, justifies such order. It may be different if the
respondent’s version consists of bald or uncreditworthy
denials, raises fictitious disputes of fact, is palpably implausible,
far-fetched or so clearly untenable that the court is justified
in
rejecting them merely on the papers
…”
11.
I
examine each of the disputes with these principles in mind.
section 129 of the nca
12.
Mr
Schoeman selected as the trust’s
domicilium
citandi et executandi
under the first
mortgage bond, the address of the mortgaged property and his home
address, 9 W….. S….., N……
Ext. 1…….
Under the (disputed) second mortgage bond Mr Schoeman chose Office
1….., L…. A…. C….
N… for this
purpose on behalf of the trust. As his personal
domicilium
citandi et executandi
under the
(disputed) suretyship Mr Schoeman again chose 9 W…..
Street – that is, his residential address and
the same address
he had chosen under the first mortgage bond for the trust. To
avoid confusion and out of caution the bank
caused notices in terms
of s 129 to be sent (by pre-paid registered mail and by sheriff)
to Mr Schoeman in both capacities,
to both these addresses.
13.
The
applicant’s notice of motion was served by sheriff on the trust
at Office 101, Los Arcos Centre address and on Mr Schoeman
in his
personal capacity at his residence at the 9 W….. Street
address. A notice of intention to oppose the application
was
served on 24 February 2015 on behalf of both respondents, represented
by the same attorneys. Copies of the original notices
were attached
to the founding affidavit, containing all relevant detail about
service and about the claims against both respondents.
Therefore,
even if the original notices did not come to Mr Schoeman’s
attention, he nevertheless received the s 129
notices, in his
personal capacity and in his representative capacity, at the very
latest when the notice of motion was served on
him and on the trust
at the “correct” addresses, on his.
14.
The bank as credit provider must make
averments that satisfy me on a balance of probabilities
[2]
that the s 129 notices reached the trust and
the second respondent. Whether or not the notice actually came to the
attention
of “either” respondent when they were first
sent (by registered post and by the sheriff) need not be decided –
though it is overwhelmingly probable that those notices did come Mr
Schoeman’s attention – since the notices indisputably
reached the respondents and plainly came to Mr Schoeman’s
attention (in both capacities) when the notice of motion attaching
copies of the original notices were served on him.
[3]
15.
The respondents request that the matter be
adjourned in terms of s 130(4)(b) of the NCA and that I set out
steps which the
applicant must take before the matter may resume. I
see no need to do so in the present circumstances. As I have
said, the
original notices came to Mr Schoeman’s attention
at the latest when the notice of motion was served on him. In
any event, Mr Schoeman says nothing about how the respondents may
have been prejudiced by allegedly not receiving the notices at
the
outset or since, or how they might have act if they had received the
notice and therefore how an adjournment under s 130(4)(b)
might
assist.
[4]
16.
The
entire challenge under s 129 of the NCA therefore has no merit.
THE CERTIFICATE OF BALANCE:
LOCUS STANDI
AND
PROOF OF DEBT
17.
As
I have said, the respondents claim any indebtedness reflected in the
certificate of balance has or may have been ceded, and that
the bank
therefore has no
locus standi
.
They further claim that first loan advanced has been paid up,
they deny the entire second loan agreement, they deny any
second bond
over the property, they deny that any amount was advanced under any
further loan agreement and they ultimately deny
owing any amount
under the trust’s bond (home loan) account. The
respondents make each of these claims and raise each
of these factual
disputes by asserting that the certificate of balance contains a
mistake and is therefore not sufficiently reliable
as proof of any
indebtedness. Yet they rely on the same certificate as a
prima
facie
indication that any debt owing to
the bank was ceded to a third party.
18.
The
idea that the debt may have been ceded stems from a single reference
to “
Greenhouse Funding (Pty)
Limited
” in the certificate of
balance. The respondents speculate that this may indicate a
cession or securitisation of the
debt by the bank to Greenhouse.
Confronted by this challenge the bank explained in its replying
affidavit the reference to
Greenhouse in the certificate was an
inconsequential mistake and, out of caution, the bank produced and
attached another “fresh”
certificate, confirming and
updating the first.
19.
There
is no substance to the respondents’ challenge to the first
certificate nor do they have any answer to the “fresh”
certificate. Both complied with all the prerequisites for a
valid certificate of balance stipulated in the loan agreements
and in
the suretyship. The reference in the first certificate to
Greenhouse appears opposite the words “
Institution
Name
”. Nothing further is
stated in the certificate about Greenhouse or about the
“
Institution
”.
On their own and seen in context these references to Greenhouse
as institution have no apparent meaning or significance.
And
whatever else they might mean or imply, it certainly does not state
or imply that the debt described in the certificate has
or might have
been ceded or “securitised” to any entity, let alone to
Greenhouse. Quite the contrary must in
my view be inferred.
The certificate is printed on a Nedbank letter head, and signed
by a manager of Nedbank’s “Mortgage,
Collections and
Recoveries” division. Immediately below the line item and words
“
Institution Name: Greenhouse
Funding (Pty) Limited
” appears
the following unambiguous statement:
“
The above mentioned bond holder
[correctly identified as ‘
Maluti
Trust IT 12386/96
’]
is
indebted to the Bank in terms of a loan secured by a mortgage bond
for: bond account no. 8……..
”
20.
There
can in this light be no real question that the words “
the
Bank
” refer to the applicant, and
that the debt is therefore owing to the bank and not to Greenhouse.
The certificate on
its plain terms therefore confirms the
indebtedness of the stated amount (R2 549 615.89 plus
interest at the agreed interest
rate) by the trust to the bank, as
the manager of “
Mortgage
Collections and Recoveries
”
intended (according to the deponent to the founding affidavit) to
confirm for purposes of the present application.
21.
Mr Schoeman in my view grasps at an
apparent, fully explained and inconsequential mistake to indulge in
“
pure speculation
”
as Eksteen J recently described a similarly misdirected challenge to
a certificate of balance in
Thompson v
Investec Bank Limited
[5]
.
In that case the creditor bank produced direct evidence,
uncontradicted by the respondent, that the agreements had in fact
not
been securitised or ceded. In this case the creditor bank likewise
produced direct evidence in its founding papers, uncontradicted
by
the respondent, that the agreements had in fact not been securitised
or ceded in confirming:
“
Neither the bond nor the loan
agreement have been ceded or endorsed in terms of any securitisation
agreement nor has the Applicant’s
rights in terms thereof been
ceded, compromised or surrendered in any way or manner whatsoever, in
favour of any Third Party
.”
22.
Mr
Schoeman “
vehemently
”
denies these allegations, saying the mistake “
makes
this Certificate of Balance suspect as this implies that
securitisation has in fact occurred.
”
In the apt words of the learned judge in
Thompson
,
Mr Schoeman’s reasoning similarly “
involves
a considerable leap of logic
”,
particularly in the face of the bank’s direct evidence that in
fact the debt was not ceded or securitised.
23.
That
disposes of the respondent’s challenge to the bank’s
locus standi. And if the certificate does provide
prima
facie
proof of the existence and amount
of the trust’s indebtedness to the bank, it potentially also
disposes of the respondents’
challenges in that regard.
However, each issue concerning the existence and amount of the
indebtedness must further be considered
in its own context.
24.
The respondents bear the onus to prove the
indebtedness under the first loan and mortgage bond was fully paid
up.
[6]
The basis on which the bank relies on a
certificate to prove the contrary, and to prove all aspects of the
debt and the amount owing,
is contractual. The mortgage bond
and suretyship provide that the certificate will be regarded as
prima
facie
evidence or proof of the
existence and amount of the indebtedness which of course includes the
identity of the debtor to the stated
creditor – in this
instance, the bank. But the bank has gone further by producing
a second certificate of balance,
also duly signed and in all other
respects in accordance with its requirements under the suretyship and
the loan agreements.
25.
In
the bank’s supplementary replying affidavit a senior “
Legal
Manageress
” employed by the bank
in its home loans litigation department introduced copies of all the
trust’s bank statements
under its home loan account, from its
inception up to and including November 2015. The statements
confirm that on 13 July
2005 an amount of R1 693 402.00 was
advanced to the trust; that the amount has not been paid up as the
Mr Schoeman
alleges; that on 19 December 2007 a further amount
of R1 300 000.00 was advanced to the trust, matching
precisely the
second advance alleged by the bank under the second
loan agreement and mortgage bond; and that the total amount claimed
as at the
relevant date remained outstanding and owing by the trust
to the bank under the same account.
26.
The respondents have not rebutted the
prima
facie
proof represented by either of
the two certificates of balance. Either therefore serves as
conclusive evidence for purposes of
these proceedings.
[7]
27.
The
bank has gone well beyond the certificate and produced credible and
uncontradicted evidence confirming the correctness of the
certificate
and thereby established the amount of the indebtedness, the nature of
the debt (arising from a loan agreement), in
relation to the correct
debtor (the trust) owing to the bank and to no other potential
creditor.
28.
I
am satisfied that the statements on their own establish that the
amount due and owing by the trust to the bank as at 29 October
2015
on the bond account and was R2 792 443.00 (at the agreed
rate of interest), which includes sufficient proof that
the first
loan advanced was not paid up. I am further satisfied, based in
the certificates and the statements, or on either
certificate, that
the trust is liable for these amounts to the bank and that according
to the first and second loan agreements,
the trust is liable for the
bank’s costs of these proceedings at the scale as between
attorney and client costs.
29.
No
issue is raised over whether I might or should exercise my discretion
against the bank by not declaring the property especially
executable
or by not authorising the registrar to issue a warrant of execution
for the attachment of the property. The bank
has provided
satisfactory grounds, based on undisputed facts, which in my view
warrant an order to such effect.
RECKLESS CREDIT
30.
Mr Schoeman is an attorney and businessman.
As counsel for the bank submitted, it is fair to assume he
would have understood
the risks, costs and obligations involved in
accepting the credit on the terms of the loan agreement, on behalf of
the trust. Counsel
for the bank further submitted, correctly,
that no facts or relevant circumstances are stated by Mr Schoeman in
support of his
claim that the loan agreements ought to be declared
reckless in terms of s 80 of the NCA. The respondents bear
the onus
to prove that allegation.
[8]
They were required to set out, with
sufficient particularity, facts about the negotiations leading to the
conclusion of the agreement,
about the parties involved in the
negotiations, and the relevant details of any credit application
signed by or on behalf of the
debtor should have been disclosed.
[9]
I agree with counsel for the bank that the
respondents have set out no facts, let alone sufficiently detailed
facts, to sustain
any aspect of this defence.
31.
Counsel
for the respondents readily and properly conceded in argument that Mr
Schoeman’s entire reckless credit defence contradicts
and is
mutually destructive of Mr Schoeman’s denial of the entire
second loan agreement and mortgage bond. I therefore cannot
attach
any weight to Mr Schoeman’s evidence on any issue not
supported by any other evidence.
32.
The
only relevant assertion by Mr Schoeman in this regard was that the
bank in fact performed no risk assessment. The bank
however in
reply established this claim to be clearly untrue. The bank did
so by attaching a printed home loan application
form, completed by Mr
Schoeman himself on behalf of the trust. The further credit extended
under the second loan agreement was
approved and advanced on the
basis of this application for further credit, and the financial and
other information pertinent to
the assessment of risk provided in it
by Mr Schoeman. The application form includes a statement of
the trust’s assets
and liabilities, including a declaration by
Mr Schoeman that the mortgaged property (described as his primary
residence) at 9 W…..
Street at the time was worth R4,5 million
– as it happens, far exceeding the bank’s present claims.
The
application form also reveals that the further credit
sought was in the precise amount (R1,3 million) which shortly
thereafter
was advanced under the second loan agreement. Mr
Schoeman did not seek to challenge any of this evidence and counsel
for
the respondents, quite properly, offered no explanation for it
either.
suretyship
33.
It
is against the backdrop of such clearly untenable evidence by
Mr Schoeman that I assess his claim that the signature on
the
suretyship plainly purporting to his signature, is not his. I
also assess that version on its inherent probabilities
and by further
considering it is entirely unsupported, in circumstances calling for
substantiation from the respondents.
34.
The
denial is inherently improbable. It was a condition under both
mortgage bonds that the trust’s debts be secured
by personal
suretyship. (The first mortgage bond is admitted; the dispute
raised over the very existence of the second bond
is so untenable
that it may be considered plainly false – not least because the
bank and the notary under whose hand the
bond was ostensibly
registered would on that version be implicated in a fraud.) As
a condition to both bonds one would therefore
reasonably expect a
suretyship to exist in favour of the bank by some surety. The
second respondent is the only trustee of
the trust. He applied
for the loans on behalf of the trust. The loans are secured by
bonds registered over the property
which is his primary residence at
an address which Mr Schoeman furnished as his own chosen domicile. It
is overwhelmingly probable
– as the suretyship on which the
bank relies reflects – that Mr Schoeman himself would have
stood surety in respects
of the trust’s debt. And if he did not
stand surety for the debt, or if no-one did so, Mr Schoeman should
have personal knowledge
as to whether anyone else or no-one had done
so. Yet Mr Schoeman provides no such evidence or context that
might explain
why the bank would (or whether it did) forego such
security altogether or who else might have stood surety. In
denying his
signature on the suretyship Mr Schoeman effectively
imputes a fraud of some kind to the bank – there is no
potentially innocent
explanation for a signature purporting to be his
appearing on the document. One would expect such a far-reaching
assertion
to be based on something more than a bald claim that it is
not his signature.
35.
I
cannot accept Mr Schoeman’s version. I therefore
find he did bind himself as surety and co-principal debtor to
the
trust, on the terms alleged by the applicant.
CONCLUSION
36.
On my assessment the second respondent’s
version on each of the issues which the respondents say must be
referred to trial
“
consists of
bald or uncreditworthy denials
,
raises
fictitious disputes of fact, is palpably implausible, far-fetched
”
and is “
so clearly untenable that
the court is justified in rejecting …
[it]
…
merely on the papers
.”
[10]
37.
I
am satisfied in relation to each such issue that the respondents have
raised no
bona fide
dispute and that each of their defences may and should be rejected on
the papers.
38.
I
make the following order:
A. The first respondent and the second
respondent are ordered jointly and severally, the one paying the
other to be absolved –
(a)
to pay to the applicant
the
sum of R2
549 615.89;
(b) to pay interest on such sum to the applicant at
the rate of 7.35% per annum calculated and capitalised monthly in
advance from
31 August 2014 to the date of payment.
B. The immovable property, Erf 1….., N……,
Ext 1… Township, Registration Division IQ, Province of
Gauteng,
measuring 1 396 (one thousand three hundred and ninety
six) square meters, held by Deed of Transfer No. T1……,
situate at 9 W….. Street, N……. Ext. 1…,
mortgaged under mortgage bond no. B……. and B…..
is declared specially executable for the sum and interest thereon set
out in paragraph A of this order and for the costs set out
in
paragraph D of this order.
C. The Registrar is authorised to issue a warrant of
execution for the attachment of the property described in paragraph B
of this
order.
D. The first and second respondents are jointly
and severally liable to pay the applicant’s attorney and client
costs.
MA KRIEGLER
ACTING JUDGE OF THE HIGH COURT OF SOUTH
AFRICA (GAUTENG LOCAL DIVISION, JOHANNESBURG)
APPEARANCES:
FOR APPLICANT Adv D Van Niekerk
Instructed by Hammond Pole
Majola Inc.
Johannesburg
FOR RESPONDENTS Adv EN Sithole
Instructed by Anderson-Kriel
Attorneys
Johannesburg
[1]
[2009] ZASCA 1
;
(2009) 2 SA 277
(SCA) 290 par [26]
[2]
Sebola and Another v Standard Bank of South
Africa Limited and Another
(2012) 5 SA
142
(CC) [74]
[3]
SA Taxi Development Finance (Pty) Ltd v
Phalafala
(2013) JDR 0688 (GSJ) per
Van Eeden AJ par 9.
[4]
Phalafala
pars
[10] and [11]; and see
ABSA Bank
Limited v Petersen
(2013) 1 SA 481
(WCC) per Binns-Ward J at par 25
[5]
At 69, unreported case number 846/2010 ECLD HC
dated 1 July 2014
[6]
Pillay v Krishna
(1946) AD 946
at 958
[7]
See
Senekal v Trust
Bank of Africa Limited
(1978) 3 SA 375
(A); and see
Veltsman and Other v
Standard Bank of SA Limited
[2004] All
SA 704
(E)
[8]
Scholtz
et al
,
Guide to the
National Credit Act
par
11.5.7
[9]
Ibid.
[10]
National Director of Public Prosecutions v
Zuma
, ibid.