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[2010] ZAGPPHC 620
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Changing Tides v Mahoney and Another (48549/2008) [2010] ZAGPPHC 620 (21 March 2010)
IN THE HIGH
COURT OF SOUTH AFRICA
(NORTH GAUTENG
HIGH COURT, PRETORIA)
Case No:
48549/2008
Date: 21 May 2010
In the matter
between:
CHANGING
TIDES
...........................................................................................................................
Applicant
And
DOUWE FOPPE
MAHONEY
..............................................................................................
First
Respondent
SANET
MAHONEY
..........................................................................................................
Second
Respondent
JUDGMENT
MAVUNDLA, J.
[1] This is an
opposed application for summary judgment against the defendants,
jointly and severally, the one paying the other
to be absolved, for
payment in the amount of R444, 952.20 together with interest on the
aforesaid amount calculated at the rate
of 16.10% per annum from 1
September 2008 to date of oayment. The applicant further prays for an
order declaring executable certain
immovable property Erf 2186
Stilfontein Extension 4 Township, Registration Division Province of
North as well as costs of suit
on attorney and own client.
[2] The plaintiff
issued summons against the defendants for the payment of the amount
mentioned herein above. The plaintiff in paragraph
1.1 of the
particulars of claim has alleged that it is a trustee of South
African Home Loans Guarantee Trust, a irust dully registered
under
Masters Reference No. IT/10713/00 (‘the Trust”), with its
principal office place of business at The Grades, 78
Amstrong Avenue,
La Lucia, Durban.
[3] The plaintiff
has attached as annexure “A1” a copy of the letter of
authority issued by the Master of the High Court
(Transvaal
Provincial Division) to the plaintiff and authorising the plaintiff
to act as trustee of The South African Home Loans
Guarantee Trust.
[4]
According to the particulars of claim, the first defendant and the
second defendant are married to each other out of community
of
property, and their respective addresses of
domicilium
citandi et excutand'
is
at the above mentioned property sought to be declared executaoie.
[5] The indebtedness
of the defendants is premised on two loan agreements in respect of
amounts loaned and advanced to the defendants,
and tne relevant
righis. interest and title in respect of such indebtedness was
allegedly ceded to the Plaintiff.
[6]
The first loan agreement was concluded between Pretoria, Main Street
65 (Pty) Ltd and the defendants on 1S January 2006 for
an amount of
R279 783.18, plus an additional sum of R75 000. 00
1
.
The amount of R279 783.18 was advanced to the defendants by
Main
Street 65 (Pty) Ltd
on
13 February 2006 subject to the terms and conditions contained in the
loan agreement, a copy of which is attached as annexure
“B1"
and “B2” to the particulars of claim. It is alleged that
the defendants failed to comply with the material
repayment terms of
the aforesaid agreement.
[7] It is futher
alleged that on 5 April 2006 Main Street 65 (Pty) Ltd in writing
ceded all its rights, title anc interest and arising
out of the Loan
Agreement, to Thekwini Warehousing Conduit (Pty) Ltd (“Thekwini”)
who accepted the cession. Annexure
“C” being the copy of
the cession has been attached to the particulars of claim.
2
It is further averred in paragraph 11 of its particulars of claim
that the plaintiff as lender, at the instance of the defendants
re-advanced on 13 July 2005 to the defendants as borrowers, at the
latters instance and request an amount of R18, 000. 00, for
which
plaintiff holds no security. Annexure “D’ is attached,
being a copy of the Re-advance Schedule.
[8]
It is further averred in paragraph 12 of the particulars of claim,
that on 22 November 2006
Thekwini
ceded
all its right, title and interest, to and were accepted by
Main
Street 65 (Pty) Ltd Registration Number 2001/00404/07),
which
in turn ceded on 29 May 2007 all its rights arising from the
aforesaid cession. It is further averred that Main
Street,
then
on 22 November 2006
ceded
to
The Thekwini Fund
5
(Pty) Ltd which accepted, all its right, title and interest arising
from the aforesaid cession. A copy of the said cession is
attached as
annexure “F”.
[9] In paragraph 14
of the particulars of claim, it is averred that on 29 May 2007 and at
Pretoria, the Thekwini Fund 5 agreed to
advance to the defendants an
amount of R115 000.00 subject to the terms and conditions contained
in the loan agreement and its
schedule, a copies of which are
attached as annexure “G1” and “G2”
respectively. Pursuant to the aforesaid
agreement, Thekwini 5 on 19
June 2007 duly advanced to the defendants the amount of R115, 000.
00.
[10]
It is further averred in paragraph 15 that,
inter
aiia,
on
5 August 2008 Thekwini ceded, as it was entitled to, all its right,
title and interest to Main Street 65 (Pty) Ltd, in terms
of or
arising from the loan agreement to “Main Street, which accepted
such cession. A copy of the aforesaid cession is attached
as annexure
“H”. It is further averred that the defendants failed to
comply in terms and conditions as stipulated in
the two written
agreements, the schedules thereto and Re-Advancement Schedule.
anneyj'e "B1”, “B2
V
r2”
ano “D’ oy ïaliirc into arrears witr. tne montniy
instalment which arrears, in soite demand, defenaants
failed
[11]
The defendants in opposing the application for summary judgment have
raised in their opposing affidavit two points
in
limine.
The
first point
in
iimine
is
that the affidavit in support of the application for summary judgment
was not deposed to in accordance with the requirements
contained in
Regulation 1(1) of the Regulations published in Government Gazette
R1258 of 21 July 1S72 (“the Regulations”).
However this
point
in iimine
has
been abandoned.
[12]
The second point
in
limine
is
tnat the plaintiffs particular's of claim are vague and embarrassing
and accordingly excipiabie in that: the plaintiff cites
itself
personally as a trustee of South African Home Loans Guarantee Trust
with the Master’s reference number: IT 10713/
00, but not as
nominee ex
officio.
It
is further contended that in paragraph 23 of particulars of claim it
is alleged that the trust on 1 September paid an amount
of R444
,
952.
20 yet the judgment is sought in favour of the plaintiff in its
personal capacity, and there is no legal basis alleged upon
which the
plaintiff is entitled to one judgment.
The
second point
in
limine
rai
sed
is that the piainiiff in this action is Changing Tides 17 (Pty) Ltd.
The plaintiff has cited itself as trustee of 'South AFRICAN
Home
Loans Guarantee Trust, with the Masters reference number as IT
10713/00. The plaintiff however has not cited itself as nomino
officio, but in its personal capacity as Changing Tides 17 (Pty) Ltd.
It is contended that there is no allegation made in the particulars
of claim to support the contention that the trust is before the
Court. It is submitted that the plaintiff before Court has no
l
ocus standi.
[13] It is further
contended that the particulars of ciaim contain essentially two
claims. The first ciaim which arises from moneys
lent and advanced by
“Main Street 65 (Pty) Ltd", which were allegedly later
ceded back to “Thekwini Warehouse
Conduit (Pty) Ltd’ and
later again ceded back to “ Main Street” and which were
allegedly later ceoed back to
“Thekwini 5 (Pty) Ltd.
[14] The second
claim is in respect of money allegedly lent and advanced by one
Thekwini 5 (Pty) and again it is alleged in respect
of a cession
thereof to “Main Street" and later again ceded back to
“Thekwini 5. The cause of action set out in
the particulars of
claim is in favou' of the South African Home Loans Guarantee Trust
(“the trust”) and not Changing
Tides (Pty) Ltd. There is
no allegation made explaining the basis upon which “Changing
Tides 17” is entitled to judgment.
[15]
It is further contended that the affidavit in support of summary
judgment has reference to the trust as being the Plaintiff
with the
Master's reference number as IT 10713/00. It is contended that there
is no allegation made in the particulars of claim
to support the
contention that the trust is before the Court, it is submitted that
the plaintiff before Court has no
locus
standi.
[16]
It is contended on behalf of the applicant that the defences raised
by the defendants are highly technical and by nature indicative
of
the fact that the defendants do not have a bona fide defence against
the plaintiffs claim and that they should not be allowed
to hide
behind such defences but ordered to pay the plaintiff's claimin this
regard reference is made of
Trans-African
Insurance CO. Ltd v Maluke
3
and JNO. G Teale & Sons Ltd v Vrystaatse Plantediens Ltd.
4
It
is further contended that where the defendants are aware of the
plaintiff’s claim, there is no prejudice on their part
and the
Court should in the exercise of its discretion order the defendants
to pay the plaintiff’s claim, in this regard
the plaintiff
relies on the matter of
Standard
Bank of South Africa Ltd v Roestof
5
[17]
With regard to the defendants’ contention on
locus
standi,
it
is submitted on behalf of the plaintiff that the issue is not so much
whether the piaintiff has
l
ocus
standi
,
but whether it has been properly cited, it is submitted that it is
evident from paragraphs 1.1 to 1.3 of the plaintiff's particulars
of
claim that it is cited in its representative capacity as trustees of
the South African Loan Guaranteed Trust (“trust”).
[18]
It is further submitted that the plaintiff is properly before the
Court in its representative capacity in this regard reliance
is made
of the matters of
Rosner
v Lydia Swanepoel Trust
1998
(2) SA 123
WLD at 127B-C;
Mariola
and Others v Kaye- Eddie NO and Others
1995
(2) SA 728
WLD at 731CV-D.
[19]
It is further contended on behalf of the plaintiff that even if it
were to be found that the citation is incorrect, which is
not
admitted, the citation is capable of being cured by way of an
amendment at the hearing of the application and the defendants
would
suffer no prejudice, in this regard reliance is made on
Rosner
v Lydia Swanepoei Trust
6
;
Standard Bank
Finance Nominees (Pty) Ltd v Lurie and Others
7
.
[20]
The defendants in order to successfully resist the summary judgment
application must satisfy the court that they have a
bona
fide defence to the applicant's claim. They must do so by stating
the
nature the grounds their defence and the material facts upon which
they rely which appears to be good in law ; vide.
Maharaj
v Barc;ays National Bank Ltd
8
“
(I)
The defence must go to the merits of the application and not consist
merely of an attack on the language of the summons and
the
plaintiff’s affidavit, nor is it sufficient for a defendant
merely to state that he or she has no knowledge of the allegations
in
the plaintiff’s summons or that he or she cannot comment on the
plaintiff’s claim;
(ii)
the defence raised must be valid in law not merely an unenforceable
moral right or inability to pay.
However,
the procedure for summary judgment is not intended to replace the
exception as a test of one or other of the parties' legal
contentions. It has been held that when a real difficulty as to the
matter of law arises, the court should grant summary judgment
only if
it is satisfied that the point is really unarguable, and also that it
is not depriving the defendant of the right he or
she would have had,
in an appropriate case, had the point in ; law been decided against
him or her on exception, of an amending
his or her pleading...
(iii).
The defendant is not required to disclose the whole of his or
defence; it is sufficient if he or she discloses the nature
and the
grounds of a
bona
fide
defence
and the material facts relied upon therefor;
(iv). Purely
technical defences are not permitted.” Vide Superior Court
Practice at B1-225.
[21]
A trustee cannot act in its personal capacity. It must act
nomino
officio, vide Mariola and Others v Kaye-Eddie NO and Others
.
9
[22]
It has been submitted on behalf of the respondents that
in
casu
the
plaintiff is acting in its persona! capacity. It has further been
submitted that this
status
quo
cannot
be cured by an amendment since there is no allegation that the
plaintiff is acting
nominee
officio.
It
is further submitted that the summary judgmsn; snouid oe dismissal'
witr, costs for the aforesaid reasons,
inter
alia.
[23]
In is not in dispute that the plaintiff is a trustee. In paragraph
1.3 the plaintiff refers to the letter of authority issued
by the
Master of the High Court (Transvaal Provincial Division) and in
support thereof has attached annexure A, which is a copy
of the
aforesaid letter. This letter provides,
inter
alia
.
that the plaintiff is represented by Donald Andrew Guthrie and is
thereby authorised to act as trustee of The South African Loans
Guarantee.
[24]
With regard to the submission made on behalf of the respondents that
the
status qou
cannot
be cured. ! find it apposite to cite in full what was said by
Goldstein J in
Rosner
v Lydia Swanepoel Trust
1998
(2) SA 123
(W) at 128:
“
8
In
Devonia
Shipping Ltd v MV Luis (Yeoman Shipping Co Ltd intervening)
1994
(2) SA 353
(C) at 359—Rose innes J said the following:
The
general rule is that an amendment of a notice of motion, as in the
case of a summons or pleading in action, will always be allowed
unless the application to amend is
mala
fide or
unless
the amendment would cause an injustice or prejudice to the other side
which cannot be compensates by an oroer for costs or,
in other woros.
uniess tne parries cannot oe put back for the purposes of justice in
the same position as they were in tne notice
of motion which it is
sought to amend was filed... A material amendment such as alteration
or correction of the name of tne applicant,
or the substitution a new
a new applicant, should in my view usually be granted subject to the
considerations mentioned of prejudice
to the respondent... The risk
of prejudice will usually be less in the case where the correct
applicant has been incorrectly named
and the amendment is sought to
correct the misnomer than in the case where it is sought to
substitute a new applicant. The criterion
in both cases, however, is
prejudice which cannot be remedied by an order of costs and there is
no difference in principle between
the two cases...’
I
respectfully agree with the dicta. Not only is there a considerable
body of authority which accords with the learned Judge’s
views
(see, for example, Goldberg v Tomaselli & Sons Ltd
1940 TPD
408
;
Curtis-Setchwell
& McKie v Koeppen
1948
(3) SA 1017
(W);
Trustees
African Explosives Pension Fund v Nestel
1961
(3) SA 245(W))
, but his approach appears to me. with respect, to be
eminently practical and sensible, eschewing technicality and
correcting procedural
mistakes as cheaply as is possible. Of course,
the passage ! have quoted justifies the amendment.’’
[25]
In casu, there is no application for an amendment. However, were this
matter to go on trial, I have no doubt that an amendment
would be
successfully appiied for. The amendment would purely be to state that
the plaintiff is acting
nominee
officio.
As
matters stand, the respondents are aware that the plaintiff has
authority to act on behalf of the Trust, as is clear from annexure
A
referred to herein above.
[26]
It has further been submitted that there are no allegations in the
pleading to justify an entitlement of the amounts claimed
by the
plaintiff who is acting in its personal capacity. In my view, the
answer to this submission is to be found in what was said
by
Labuschagne J in the matter of
Mariola
and Others v Kayie-Eddie NO and Others
(supra)
at 232:
“
In
our law a trust is not a legal persona but a legal institution.
sui
generis.
The
assets and liabilities of a trust vest in the trustee or trustees.
The trustee is the owner of the trust property for purposes
of
administration of trust, but
qua
trustee
he has no beneficial interest therein. See
3raun
v 3iann and 3oth at NNO and Another
[1984] ZASCA 19
;
1984
(2) SA 850
(A) at 859E-60A
Commissioner
of iniand Revenue v Friedman and Others NNO
[1992] ZASCA 190
;
1993
(1) SA 353
(A) at 370E-G.”
[27] Whatever amount
are to be paid in this matter as it stands, such money would be for
the benefit of the trust and not for the
plaintiff in its personal
capacity. In as much it has been specifically pleaded that the moneys
are claimed on behalf the trust,
I am of the view that in the
circumstances of the case it is clear that the money claimed would
accrue to the benefit of the trust.
In the premises I am of the view
that the contention of the respondents should not be upheld. This
must be seen in the context
that the defendants do not dispute their
indebtedness to the plaintiff.
[28] On the merits,
the defendants do not dispute their indebtedness to the plaintiff.
They, however, contend that after they had
financial constrains, they
approached a debt commissioner for the restructuring of their
financial liabilities informed the plaintiff
accordingly. They
further contend that the plaintiff unlawfully cancelled the debt
review
[29] I do not agree
that there was an unlawful cancellation of the debt review by the
plaintiff. In my view there is no merit in
this contention. Annexure
DM2 is dated 2 May 2008. The defendants were ni September 2008 per
annexure DM7 informed by Hoem Loan
that their account is in arrears,
unless they remedy the situation within In my view the plaintiff was
within its rights to issue
summons against the defendants. There is
no merit in this submission.
[30]
In respect of merits, the defendants contend that after they had
financial constrains during April/May they approached a credit
advisor to place them under debt review in terms of s36 of the
National Credit Act. On the 15 May 2008 their credit advisor DDT
Financial Services remitted a letter to their creditors, including
Home Loans Guarantee Trust in terms of section 8S(4)(b)(i)(ii)
of the
Credit Act
10
.
On 27 August 2008 their debt counsellor notified Home Loans in terms
of subsection 24 (10) of the regulations of the
National Credit Act
34 of 2005
that the application of the first respondent for debt
review was successful and that are in the process of being
restructured
11
.
The available monthly repayment to the plaintiff was determined at
R2200.70 @ 3.00% per annum.
12
[31] Home Loan on
3
rd
September 2008 informed DDT that it has not received
any payment proposal nor any payment has been allocated to itself. It
also
advised in terms of s 86(10) of the National Credit Act of the
termination the debt review with immediate effect as 60 days after
the application for debt review.
13
[32] The defendants
further aver that the plaintiff unlawfully cancelled the debt review.
From what I have pointed out herein above,
it is clear that the first
respondent applied for debt review in May. Only on 27 August 2008 was
his application successful, much
longer than 60 days from the date of
application of debt review.
In
my view, the plaintiff cannot be faulted for having terminated the
debt review because in any event, there was no payment by
the first
defendant
of
any amount determined by the deo: counseilor. Besides, there was no
action by the defendants or the debt counsellor to the Magistrate's
Court as envisaged in
section 87
of the
National Credit Act
.
14
There is no
explanation provided by the first defendant as to why there was this
delay before his application was approved. There
is also no
indication that the second defendant has also applied for debt
review. In the circumstances. I am of the view that there
is nothing
obliging the plaintiff from not issuing summons against the
defendants and claim payment of what is due to it. I am
also of the
view that the review debt cancellation by the plaintiff was not
unlawful.
[34]
The defendants, in my view, have not snow' that they have not
satisfied me that they have
bona
fide
defence
against the plaintiff’s claim, in the premise, I am of the view
that the application for summary judgment should be
granted against
the Defendants.
[35] In the
premises, I make the following order:
1. That summary
judgment in favour of the plaintiffs is granted against both
defendants, the one paying the other to be absolved,
for:
1.1 payment of the
sum of R444 952.20.;
1.2 interest on the
amount of R444 952.20 at a rate interest on the 16.10% per annum from
1 September 2008 to date of payment.
1.3 ERF 21285
STILFONTEIN EXTENSION 4 TOWNSHIP, REGISTRATION DIVISION I.P..
PROVINCE OF NORTH - WEST, MEASURING 1487 (ONE THOUSAND
FOUR HUNDRED
AND EIGHT'.' SEVEN!) SQUARE METRES, HE_D ? DEED OF TRANSFER NO.
T83354/20C3. SUBJECT TO THE CONDITIONS "HEREIN
CONTAINED AND
EXPECIALLY TO THE RESERVATION OF RIGHTS TO MENERALS. also known as
149 JAN VAN RIEBEECK AVENUE, STILFONTEIN EXTENSION
4. NORTH, is
hereby declared executable.
1.4 Costs of suit.
DATE OF
JUDGEMENT: 21 MAY 2010
N.M.
MAVUNDLA
JUDGE
OF THE HIGH COURT
PLAINTIFF’S
ATT : EDELSTEIN-BOSMAN INC.
PLAINTIFF’S
ADV : MR DANIEL PRINSLOO.
DEFENDANTS’
ATT : MICHIEL ZWARTS ATTORNEYS
DEFENDANTS’ADV
: MRZ.F. KRIEL
1
Paragraph
3 of the particulars of claim, at paginated page 5.
2
Paginated
page 10 of the particulars of claim at paragraph 10
3
1956(2)
SA 273 (A.D.) at 278F-G: “No doubt parties and their legal
advisers should not be encouraged o become slack in the
observance
of the Rules, which are an important element in the machinery for
administration of justice. But on the other hand
technical
objections to less than perfect procedural steps should not be
permitted, in the absense of prejudice, to interfere
with the
expeditious and, if possible, inexpensive decision of cases on their
real merits.”
4
1968(4) SA 381 A at 374G-H:
5
.
2004 (2) SA 492
WLD at 496 G-H: "If the papers are not
technically correct due to some obvious and manifest error which
causes no prejudice
to the defendant, it is difficult to justify an
approach that refuses the application, especially in a case such as
the present
one where a reading of the defendant's affidavit
opposing summary judgment makes it clear beyond doubt that he knows
and appreciates
the plaintiff s claim against him."
6
Supra at 127B-C; etc
7
1978 (3) SA 338
(W) at 346A-B
8
1976(1)
SA418 at 426 A-C
9
1995
(2) SA 728
(W) at 732 where Labuschagne .T said:
"In
legal proceedings trustees must act nominee
officii
and cannot act in their private
capacities.
Shahmahomed v Hendriks and Others
1920 .AD 151 at 170-If.”’;
Rosne v Lydia Swanepoei Trust
1998
(2) SA 123
(W) at 127 para 7.
10
The
defendants have attached a copy of the relevant letter as annexure
DFM2. In the said letter all credit bureaus were advised
to list
consumer Douwe Foppe Mahoney, within 5 days of receipt of this
notice, as having applied for debt review. All credit
providers are
advised to supply credit details with regard to the above mentioned
consumer as per
section 86(5)(a)(b)
of the
National Credit Act 34 of
2005
, Current balance R390 000 Installment R5833.23
11
Annexure
DFM 3.1 at paginated page 152.
12
Paginated page 153 and 154
13
Paginated page 160-161
14
Magistrate may re-arrange consumer's obligations -(1) If a debt cou
nselor makes a proposal to the Magistrate's terms of
section
86(8)(b)
, or a consumer applies to the Magistrate's Court in terms
of
section 86(9)
, the Court must conduct a hearing and, having
regard to the proposal and information before it And the financial
means, prospects
and obligations may – reject the
recommendation or application as the case may be : or make:
(I)
an order declaring any credit agreement to be reckless, and an
order contemplated in
section 83
(2) or (3), if the Magistrate's
Court concludes that the agreement is reckless:
(ii) an order
re-arranging the consumers obligations in any manner contemplated in
section 86(7)(c)(ii)
; or
(iii) both orders contemplated in
subparagraph (I) and (ii)
The National Credit Regulator may not
intervene before the Magistrate's Court in a matter referred to it
in