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[2010] ZAECPEHC 74
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FirstRand Bank Ltd v Van Niekerk NO and Others (2738/2010) [2010] ZAECPEHC 74 (17 December 2010)
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT
ELIZABETH)
Case
No.: 2738/2010
Date
heard: 7 December 2010
Date
delivered: 17 December 2010
In the matter between:
FIRSTRAND
BANK LIMITED
Applicant/Plaintiff
and
HERMANUS ARNOLDUS VAN NIEKERK
N.O.
First Respondent/Defendant
MARTHINNIS JAKOBUS MöLLER
N.O.
Second
Respondent/Defendant
LIZELLE MöLLER N.O.
Third
Respondent/Defendant
MARTHINNIS JAKOBUS MöLLER
Fourth
Respondent/Defendant
LIZELLE
MöLLER
Fifth
Respondent/Defendant
JUDGMENT ON APPLICATION FOR
SUMMARY JUDGMENT
DAMBUZA, J
:
This is an application for summary
judgment in which the plaintiff seeks judgment against the
defendants for payment of R966,652.80,
interest thereon at 8.4% per
annum, an order declaring executable an immovable sectional unit in
respect of which it registered
a mortgage bond, and costs of suit.
The application is opposed.
According to the papers, on 4 March
2008 the plaintiff, being the First National Bank Limited (“the
Bank”) lent a
capital amount of R928,000.00 to the Möller
Trust (“the Trust”) of which the first to third
defendants are trustees.
To secure the loan a Sectional Covering
Mortgage Bond was registered over the sectional unit which the Trust
sought to buy with
the loan amount; the unit is in a Sectional
Title Scheme. The plaintiff pleads that the loan amount is now
payable in terms
of the loan agreement concluded by the parties as
the Trust has failed to
“pay an amount or amounts”
due under the agreement. The fourth and fifth respondent stood
surety for and bound themselves jointly and severally in
solidum
a
s co-principal debtors together with the Trust for performance
by the Trust of its obligations under the loan agreement. The
plaintiff’s claim against them is therefore in their
capacities as sureties.
Subsequent to entering an appearance
to defend, the defendants filed their affidavits in opposition of
the application for summary
judgment. They set out several defences;
the first being a point
in limine
that the Trust should have
been cited as such, the second being the failure by the plaintiff to
attach an “
authorized resolution of the Trustees of the
Möller Trust”
in respect of hypothecation of the
property in question. At the start of the hearing of the
application counsel for the defendants
advised that the defendants
were not persisting with the points
in limine
.
Regarding the merits of the
application, although not specifically expressed as such, I can only
conclude from the papers that
the defendants dispute their liability
under the loan agreement, the mortgage bond and the suretyship.
They contend that the
plaintiff failed in its duty to do a
feasibility study of the development of which the unit is part. I am
not satisfied that
this constitutes a bona fide defence as envisaged
in Rule 32 of the Rules of Practice in the High Court. As submitted
on behalf
of the plaintiff the defendants (and therefore the Trust)
purchased a sectional title unit in a sectional title scheme. A
home
loan agreement was concluded with the plaintiff for the
purchase price thereof and a Sectional Covering Mortgage Bond was
registered
over the unit in favour of the plaintiff to secure the
home loan. The Trust did not purchase shares in the development
company.
There could be no duty therefore on the Bank to conduct a
feasibility study into the development scheme. This contention by
the defendant does not disclose a defence which is
bona fide
and good in law. The contention by the defendants that they do not,
in summary judgment proceedings, need to set out their defence
in
full does not assist them.
The defendants further allege that a
certain Nel misled them into concluding the agreement. During
argument it was common cause
that Nel was employed by the company
which developed the sectional scheme. There is however, no valid
basis advanced for the
allegation that Nel’s representations
were made on behalf of the plaintiff. The nature and/or content of
the misrepresentation
by Nel is also not clear from the papers. The
most that I can conclude from the allegations is that developer for
which Nel worked
sold shares in a non-existent company and presented
a false feasibility study. Even if I accept that such
misrepresentations
were made, for the same reasons set out above,
these allegations do not, in my view, reveal a bona fide defence or
a defence
valid in law to the plaintiff’s claim. So is the
further contention by the defendants that the properties are
over-valued
by 33%. In this regard the defendants rely, once more,
on the plaintiff’s failure in its duty to ensure that the unit
price
was in line with the security provided. It is common cause
that the developer was liquidated. The defendants contend that the
plaintiff was negligent in failing to obtain background information
necessary regarding the liquidation. But, again, there is
no proper
basis laid or authority cited by the defendants for this contention.
I am not aware of any legal principle in terms
of which a Bank
(plaintiff) advancing a loan for purchase of a new property bears
the alleged duty and counsel could not refer
me to any. In my view
the fact that the development scheme was liquidated is no proper
basis for repudiation of the defendants’
obligations under the
home loan agreement.
Mr Scott
who appeared on
behalf of the Bank correctly highlighted the fact that the
defendants are currently owners of a valuable property
as a result
of the home loan agreement; but they are unwilling to pay for it as
they are obliged to under the loan agreement.
The loan amount which
was initially R928,000.00 now stands at R996,652.80. Consequently I
am satisfied, despite the absence
of an allegation in the summons,
as to the amount of arrears, that a proper case has been made for an
order declaring the sectional
unit executable.
The following order shall therefore
issue:
Against the First, Second and
Third Defendants in their capacity as co-trustees of the Möller
Trust:
Payment of the amount of
R996,652.80;
Payment of interest on the said
amount of R996,652.80 at the rate of 8.4% per annum, calculated
and compounded monthly with
effect from 1 September 2010 to the
date of payment, both dates inclusive;
An order declaring executable the
following property, namely a Unit consisting of:
Section No. 204 as shown and more
fully described on Sectional Plan No. SS539/2008, in the scheme
known as KING’S VILLAGE
& TERRACES in respect of the land
and building or buildings situated at WALMER, in the Nelson Mandela
Bay Metropolitan
Municipality, Division of Port Elizabeth, of which
section the floor area, according to the said sectional plan, is 74
(Seventy
Four) square metres in extent; and
an undivided share in the common
property in the scheme apportioned to the said section in
accordance with the participation
quota as endorsed on the said
section plan;
Held by Deed of Transfer No.
ST19743/2008;
Costs of suit.
Against the Fourth and Fifth
Defendants jointly and severally with the Möller Trust, the
one paying, the others to be absolved:
Payment of the amount of
R996,652.80;
Payment of interest on the said
amount of R996,652.80, calculated and compounded monthly, at a
rate of 8.4% per annum with
effect from 1 September 2010 to the
date of payment, both dates inclusive;
Costs to be taxed as between
attorney and client.
_________________________
N. DAMBUZA
JUDGE OF THE HIGH COURT
Appearances
:
For the plaintiff: Adv P.W.A. Scott SC
instructed by Spilkins Attorneys of Port Elizabeth
For the defendants: Adv A.C. Moorhouse
instructed by Jacques Du Preez Attorneys of Port Elizabeth