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[2013] ZAECPEHC 21
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First Rand Bank Ltd v Govender (718/2013) [2013] ZAECPEHC 21 (25 April 2013)
NOT
REPORTABLE
IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE, PORT ELIZABETH
Case No.: 718/2013
Date Heard: 16 April 2013
Date Delivered: 25 April 2013
In the
matter between:
FIRSTRAND
BANK LIMITED
..............................................................................
Plaintiff
and
DAVID
ANDREW GOVENDER
.......................................................................
Defendant
JUDGMENT
EKSTEEN J:
[1] This is an application for summary judgment. The plaintiff, a
registered commercial bank and credit provider in terms of the
National Credit Act, 34 of 2005 (herein referred to as “the
NCA”) entered into an agreement of loan with the defendant
in
2005 in order for the defendant to purchase an immovable property
(the property). A bond was duly registered over the property
in
favour of the defendant.
[2] The plaintiff issued summons against the defendant on 11 March
2013 in which it alleged that the defendant had breached the
agreement and by virtue of the express terms of the loan agreement
the entire outstanding amount due on the loan became due and
payable
together with interest. It accordingly sought judgment in the sum of
R563 355,80 together with interest thereon. In
addition the
plaintiff sought an order declaring the property which is situated in
Amsterdamhoek, Nelson Mandela Bay, to be executable.
[3] Following upon the alleged breach of the agreement the plaintiff
duly issued a notice in terms of the provisions of section
129(1)(a)
of the NCA. The said notice was dispatched by registered post to the
defendant and attached to the papers is proof thereof
and a track and
trace record which reveals that the letter was delivered to the
defendant on 19 February 2013 at Bluewater Bay.
The delivery is not
in dispute. In due course the summons was served on the defendant and
he entered an appearance to defend. The
notice of opposition prompted
the application for summary judgment.
Defences to claim
[4] The defendant filed a brief affidavit to resist the summary
judgment. He purports to raise three defences therein:
(i) That the plaintiff had failed to prove that a loan agreement
exists and what the terms of the agreement are;
(ii) That the plaintiff had failed to prove that the amount claimed
is in fact correct; and
(iii) That the defendant was under the protection of the NCA in that
he had applied for debt review pursuant to the provisions
of section
86 of the NCA.
[5] The affidavit filed in opposition to the summary judgment
application was filed out of time and accordingly Mr
Scott
,
on behalf of the plaintiff, argued that in the absence of any
explanation for the failure to comply with the time provisions set
out in Rule 32 of the Uniform Rules of Court, I should rule that the
affidavit constitutes an irregular step in terms of Rule 30
and that
it should be struck out. Upon engaging Mr
Scott
in
argument on this aspect he, correctly in my view, did not persist in
this argument. I shall accordingly deal with the three
defences
raised in the sequence in which they are set above.
[6] In commencing the affidavit in opposition to the summary judgment
application the defendant alleges that the “agreed
instalment
on our home loan agreement … as per the letter of grant”
was R5 788,53. He then proceeds to state
that the “Letter
of Grant was signed by me on the 12 April 2005”. Having made
these express admissions he proceeds
to allege, remarkably, that the
applicant has attached a letter of grant to the summons as proof of
the loan agreement which was
allegedly concluded between the parties
and that the applicant has based his cause of action for this entire
application on this.
He states that the “Letter of Grant
describes itself as a letter and as an ‘advice’.”
On this basis it
is argued that the applicant has failed to prove
that a loan agreement exists and what the terms of the agreement are.
[7] The argument is clearly spurious. The application is for summary
judgment. The applicant has alleged an agreement. He has annexed
the
letter of grant and the bond document to the particulars of claim.
The letter of grant commences by a confirmation that the
bank “has
agreed to lend” to the defendant R621 000,00 against
security of a first mortgage bond to be registered
over the property.
It then proceeds to set out the terms of the agreement which extends
for several pages. At the conclusion of
these terms a representative
of the plaintiff has,
ex facie
the document, signed the
agreement on behalf of the plaintiff. Immediately thereafter the
final page of the “letter of grant”
follows. It commences
to record:
“
I
agree to the aforegoing terms and conditions and declare …”
At the conclusion of the final page the defendant’s admitted
signature appears.
[8] It is plainly an offer to extend to the defendant a loan of
R621 000,00 on the conditions set out in the letter and it
is
signed on behalf of the plaintiff. It was thereafter expressly and in
writing accepted by the defendant. On any interpretation
it
constitutes an agreement of loan. The defendant has not alleged any
basis upon which it could conceivably be contended that
the document
does not constitute a binding contract. On the contrary, he admits
expressly that there was an agreed instalment on
the home loan
agreement and that he signed the letter of grant. The affidavit
accordingly reveals no defence based on the allegation
that no loan
agreement exists. The first defence must accordingly fail.
[9] In the second defence raised the defendant contends that the
plaintiff is prohibited by legislation from charging “administration
fees in excess of R5,00 (excluding VAT) on pre-existing homeloans in
excess of the maximum fee in the Usury Act until that fee
is amended
under the powers conferred by Section 105(1) of the NCA”. He
contends that the Minister of Trade and Industry
has not changed the
maximum fee and thus it remains at R5,00 (excluding VAT).
[10] Against this background the defendant alleges that the plaintiff
has not provided the court with a comprehensive bank statement
and
accordingly the court cannot be certain that the liquid amount
claimed in, and substantiated by the plaintiff’s certificate
of
balance, is correct.
[11] These averments are equally misguided in my view. In terms of
the bond agreement a certificate purporting to be signed on
behalf of
the bank shall be proof until the contrary is proved of the balance
owing and the fact that it is due and payable. A
certificate of
balance is annexed to the particulars of claim which shows the
outstanding amount to be R563 355,80. The defendant,
whilst
speculating on what might have been included in the calculation,
makes no averment that the plaintiff has charged administration
fees
in excess of that which is permitted. That being so, it follows that
the defendant has not made out a defence as envisaged
in Rule 32 of
the Uniform Rules of Court. In fact, I do not think that any facts
which he has alleged could justify any doubt as
to the correctness of
the certificate. The second defence must therefore also fail.
[12] I turn then to consider the third defence raised. It is not in
dispute that the defendant breached the terms of the loan agreement
nor is it disputed that he in fact received the notice in terms of
section 129(1) of the NCA on 19 February 2013. The relevant
portion
of the letter in terms of section 129(1) reads as follows:
“
Home
Loan Account Number: 3 000 009 500 957
Outstanding Account Balance:
R559643.72
Default Amount: R24403.86
1. We act on behalf of
Firstrand
Bank Limited
… and advise that you are in default under
Home Loan agreement/s (“credit agreement/s”) in respect
of the above
Home Loan Account.
2. …
3. In order to rectify this
situation, we propose that you either:-
3.1 pay the default amount
within 10 business days of delivery hereof;
3.2 contact our client directly
on 011 352 5544 to discuss the possibility of making a firm
arrangement to bring the default
in terms of the credit agreement/s
up to date; or
3.3 refer the credit agreement/s
to a debt counsellor, alternative dispute resolution agent, consumer
court or ombud with jurisdiction,
with the intent that any dispute
may be resolved under the credit agreement/s or (to) develop and
agree on a plan to bring the
payments under the credit agreement/s up
to date.
4. If you fail to respond to
this notice or reject our client’s proposals contained in
paragraph 3, within 10 business days
from delivery of this notice,
our client may exercise its rights, amongst any other remedies
available to our client, to have summons
issued against you which,
should judgment be granted against you, may result in the sale of
your home in execution, potentially
leading to the loss thereof and
your eviction therefrom.
5. Your attention is also drawn
to the following terms and conditions contained in the credit
agreement/s and/or bond/s in respect
of the above Home Loan Account:
5.1 When you are in default
thereof our client is entitled to claim immediate repayment of the
full outstanding balance; or
5.2 Terminate the credit
agreement/s, upon which all amounts whatsoever owing to our client by
you will be payable in full.
If you fail to respond to this
notice or reject our client’s proposals contained in paragraph
3, within 10 business days from
delivery of this notice, our client
may proceed to exercise the abovementioned rights.
6. …”
[13] The defendant alleges in his affidavit that the plaintiff served
a notice in terms of section 129 of the NCA on him advising
him “to
seek help from amongst others a debt counsellor, within 10 days of
receipt of the letter”, which letter was
received by him on 19
February. He then proceeds to allege that on 5 March 2013, the 10th
business day after receipt of the section
129(1)(a) notice, he
approached a debt counsellor and “applied to be placed under
Debt Review”. Within five days of
the date thereof, the debt
counsellor, he says, registered him to their system and a Form 17.1
was sent to the applicant. It emerged
later, from his supplementary
affidavit, to which I refer below, that the debt counsellor so
informed the plaintiff on 12 March
2013.
[14] On this basis the defendant contends that the plaintiff acted
prematurely in issuing summons as he (the defendant) had complied
with plaintiff’s request to see a debt counsellor within ten
days of receipt of the section 129(1)(a) notice.
[15] Clearly, the defendant has misconstrued the letter written to
him. He was not invited to “seek help from amongst others
a
debt counsellor”. What the defendant was invited to do is to
refer the credit agreement to a debt counsellor, alternatively
a
dispute resolution agent, consumer court or ombud with the intention
either to resolve a dispute which may exist under the credit
agreement in issue, or to develop and agree on a plan to bring the
payments under the credit agreement up to date. This is not
what the
defendant attempted to do. On the contrary, the express averments set
out in the affidavit indicate that the defendant
sought to include
the home loan agreement in a debt review process pursuant to the
provisions of section 86 of the NCA. This he
cannot do. Once a
section 129(1)(a) notice has been delivered it is not competent for
the debt in issue, being the home loan account,
to form part of any
debt review pursuant to the provisions of section 86 of the NCA. (See
Nedbank Limited and Others v National Credit Regulator
and Another
2011 (3) SA 581
(SCA) at para [14] p. 590.)
His reference to the debt counsellor, at least in respect is the
agreement in issue, is accordingly
a nullity and can have no impact
on these proceedings (compare
Standard Bank of South Africa
Limited v Hales a-nd Another
2009 (3) SA 315
(D&CLD) at
323I-J).
[16] It is accordingly clear that the defendant has not made out any
defence as envisaged in Rule 32. During argument before me
Ms
Govender
, who appears on behalf of the defendant,
recognised this difficulty and conceded that no defence had been made
out in respect of
the claim. She, however, requested that the matter
be postponed to enable the defendant to file a supplementary
affidavit by the
defendant in order to lay a foundation upon which I
might exercise my discretion in terms of the provisions of section 85
of the
NCA. Mr
Scott
resisted this application
.
I
granted the application as I considered it to be in the interests of
justice and the matter was accordingly postponed in order
to enable
the defendant to supplement his papers.
[17] A supplementary affidavit was duly filed. Notwithstanding the
basis upon which the application for the postponement was granted
the
defendant nevertheless again attempted to make out a defence under
the provisions of section 129 of the NCA. Again it was confirmed
that
the notice in terms of section 129 was received by the defendant on
19 February 2013. An application, as recorded above, was
made to a
debt counsellor on 5 March 2013 for debt review. The debt counsellor
advised the plaintiff thereof on 12 March 2013.
On this basis the
defendant then proceeds to allege that “[s]ummons was in any
event served upon me, before any dispute resolution
or repayment plan
could be developed or suggested by my Debt Counsellor to the
[a]pplicant” (
sic)
. It is argued for this reason that
the plaintiff did not act “
bona fide
” and acted
prematurely in issuing summons.
[18] Again I think that the defence is ill-considered. Firstly, on
his own version, the defendant says that the debt counsellor
was not
approached to resolve a dispute or to develop a repayment plan in
respect of this debt. The undisputed facts before me
show that
defendant had been in default for more than 20 business days, the
section 129(1)(a) notice was indeed received on 19
February 2013, no
response was received by the plaintiff within ten business days
thereof and accordingly the plaintiff proceeded
to issue summons on
11 March 2013, as he was entitled to do. (See section 130(1) of the
NCA.) The return of service of the combined
summons, particulars of
claim and annexures thereto, shows that the sheriff served the
summons upon the defendant of 11 March 2013.
I am unable to
comprehend how any communication given on 12 March 2013, after the
service of the summons upon the defendant, could
possibly cast doubt
upon the
bona fides
of the plaintiff.
Section 85 of the NCA
[19] I turn to consider section 85 of the NCA. Section 85 provides as
follows:
“
85
Court may declare and relieve over-indebtedness
Despite any provision of law or
agreement to the contrary, in any court proceedings in which a credit
agreement is being considered,
if it is alleged that the consumer
under a credit agreement is over-indebted, the court may-
(a)
refer the matter directly to a debt counsellor with a request that
the debt counsellor evaluate the consumer's
circumstances and make a
recommendation to the court in terms of section 86 (7); or
(b)
declare that the consumer is over-indebted, as determined in
accordance with this Part, and make any order contemplated
in section
87 to relieve the consumer's over-indebtedness.”
[20] Ms
Govender
has urged me to make an order in terms
of the provisions of section 85(a) in the exercise of my discretion.
Mr
Scott
argues to the contrary.
[21] Section 85 confers a discretion on the court. In
Firstrand
Bank Limited v Olivier
2009 (3) SA 353
(SE) at para [14] on
p. 359 Erasmus J considered the nature of the discretion. He held as
follows:
“
[14] A
court is not obliged to act simply on the defendant's allegation of
over-indebtedness, but 'may' make an appropriate
order in terms of
para
(a)
or
(b)
.
The court will exercise this discretion judicially with due regard to
the objectives of the NCA which, in the present regard,
is to assist
the over-burdened consumer to rehabilitate his affairs. In doing so,
the Act makes significant inroads into the credit
provider's
common-law rights, as well as its constitutional right of access
to the courts (s 34 of the Constitution of the
Republic of South
Africa Act 108 of 1996). The court will restrict the statutory
limitation of the credit provider's rights to
the extent that it is
reasonable and justifiable to do so in our democratic order while
promoting the objects of the NCA.”
I agree with this approach.
[22] This accords with the sentiment expressed by Cameron J in
Sebola
and Another v Standard Bank of South Africa Limited and Another
2012 (5) SA 142
(CC) at para [40] p. 154 where he confirmed the
dictum of the SCA in
Nedbank Limited v National Credit
Regulator
supra
at 585 para [3] stating:
“
The
interpretation of the NCA calls for a careful balancing of the
competing interests sought to be protected, and not for a
consideration
of only the interests of either the consumer or the
credit provider.”
(See also
Standard Bank of South Africa Limited v Hales and
Another
supra
at 322B-C.)
[23] The discretion which section 85 confers upon a court arises when
a credit agreement is considered in proceedings before it
and it is
further alleged by the defendant (the consumer under the credit
agreement) that he is over-indebted. Once these two jurisdictional
facts co-exist the discretion arises. The discretion is conferred
upon the court despite “any provision of law or agreement
to
the contrary”. It follows that notwithstanding the fact that
the plaintiff has commenced proceedings to enforce the credit
agreement by the issue of a notice in terms of section 129(1)(a) of
the NCA a general debt review, which includes the credit agreement
in
issue, may still follow in the event that the court exercises its
discretion in terms of the provisions of section 85 (see
Nedbank
Limited v National Credit Regulator
supra
at para [14]
on p. 590D).
[24] In the proceedings before me the loan agreement (credit
agreement) is being considered and the defendant has alleged that
he
is over-indebted. The parties are accordingly in agreement, and
correctly so, that I am empowered to exercise a discretion in
terms
of the provisions of section 85.
[25] It is argued on behalf of the defendant that in the event of a
referral in terms of section 85(a) the court does not have
to make a
determination of over-indebtedness, but only needs to refer the
matter to a debt counsellor, requesting the debt counsellor
to report
back to the court with a determination and recommendation for the
restructuring of the consumer’s debt. It is only
upon receipt
of such determination and recommendation, so the argument proceeds,
that the court will be able to exercise its discretion
informatively.
In the circumstances, so the argument runs, the defendant is not
required to make allegations of fact relating to
his alleged
over-indebtedness. I think that this argument fails to appreciate the
nature of these proceedings.
[26] It is of course correct that the court need not at this stage
make a determination of over-indebtedness. What is required
of the
court at this stage is to exercise a discretion and to do so
judicially along the lines set out above. The court has always,
even
before the advent of the NCA, retained a residual discretion to
refuse summary judgment even where the requirements of Rule
32(2)
have not been met. In
Breitenbach v Fiat (Edms) Beperk
1976 (2) SA 226
(T) Colman J considered the approach of the court to
the exercise of such a discretion. At p. 229C-F he stated:
“
The
discretion, clearly, is not to be exercised capriciously, so as to
deprive a plaintiff of summary judgment when he ought to
have that
relief …
The discretion … should
not be exercised against a plaintiff on the basis of mere conjecture
or speculation. It should be
exercised on the basis of material
before the Court.”
[27] These comments find equal application where a defendant asks of
a court to exercise its discretion under section 85 of the
NCA in its
favour. This is borne out by a number of instances where the courts
have considered the provisions of section 85. In
Firstrand Bank
Limited v Olivier
supra
at 361B Erasmus J said:
“
Certainly,
the application must be bona fide and not merely a delaying tactic,
and the defendant must set out sufficient information
to support
his allegation of over-indebtedness.”
(See also
Standard Bank of South Africa Limited v Panayiotts
2009 (3) SA 363
(WLD) at para [55] p. 372; and compare
Standard
Bank v Hales
supra
at p. 324 at 325 para [22].)
[28] It is accordingly necessary for a defendant who makes an appeal
upon the provisions of section 85 to set out sufficient facts
on
affidavit to enable the court to exercise the discretion which is
conferred upon it, and to satisfy itself that the application
for
referral is
bona fide
and not made as a delaying tactic.
[29] Section 79 of the NCA provides that a consumer is over-indebted
if:
“…
the
preponderance of available information at the time a determination is
made indicates that the particular consumer is or will
be unable to
satisfy in a timely manner all the obligations under all the credit
agreements to which the consumer is a party, having
regard to the
consumer’s-
(a) financial means, prospects
and obligations; and
(b) probable propensity to
satisfy in a timely manner all the obligations under all the credit
agreements to which the consumer
is a party, as indicated by the
consumer’s history of debt repayment”.
[30] In order to enable a court to assess the
bona fides
of
the defendant and to determine,
prima facie
, whether or not
the appeal on section 85 is a mere delaying tactic, it is required of
a defendant to take the court into his confidence
and to set out
sufficient information to enable the court to assess whether there is
a reasonable prospect that he may be found
to be over-indebted,
including the extent of his financial means and commitments. He
should set out sufficient particularity of
his current liabilities
and must take the court into his confidence in respect of his
financial means, including his current earnings
and investments, and
his monthly living expenses. He should set out particulars of his
financial prospects in the foreseeable future
so as to enable the
court to determine whether there is a reasonable prospect that he
will be able to rehabilitate his affairs
within a reasonable period.
This may require him to deal with the circumstances which gave rise
to his default and the extent of
the change which has since occurred,
if any, in his financial affairs. (Compare
Standard Bank v
Hales
supra
at p. 324I to 325E.) Each case will,
however, depend on its own facts.
[31] The defendant has fallen dismally short of this standard. He
recognises that it is incumbent upon him to indicate how he came
to
be in default under the agreement. In this regard he states:
“
The
employer experienced financial difficulties and I was not paid
timeously or correctly. This in turn resulted in my defaulting
under
the credit agreement and subsequently becoming over-indebted.”
[32] This explanation is extremely coy. He does not tell the court
what he was entitled to under his contract of employment nor
what the
extent of his employer’s default was. He does not give any
indication of the extent of the delay in payments nor
of the
obligations which he was required to meet at the time. He does not
tell us what assets or investments he had which he could
have
utilised to meet these obligations nor why, if such assets existed,
he did not realise them to settle his debt. In all he
had not taken
the court into his confidence as to the particulars of the history
which gave rise to his default.
[33] He recognises that it is incumbent upon him to provide
particularity as to the change which has occurred in his financial
circumstances since his default. In this regard he records:
“
I have
actively been pursuing new employment opportunities and have managed
to acquire a position with a neurological firm as an
operations and
marketing manager.”
[34] This, in my view, is of no assistance. He does not confide in
the court as to how his present earnings compare to what he
previously earned. He does not give any indication of whether his new
employment opportunity affords him greater or lesser remuneration.
In
the absence of any indication of the change in his earnings nor of
the change in his obligations, liabilities and living expenses
the
statement is of no assistance.
[35] He declares further that he has always been aware of debt
counselling and his right to approach a debt counsellor. In this
regard, however, he states:
“
I was
unaware that you had to approach a Debt Counsellor before you
received the S129(1)(a) notice. It has always been my belief
that the
notice was merely a demand and that once you received it, you could
then go to a Debt Counsellor.”
[36] What the defendant fails to explain is why he did not approach a
debt counsellor at the time of his default and why he chose
to sit
back and wait for a “demand” before seeking any
rearrangement in his affairs. He acknowledges that he did not,
in
response to the section 129(1)(a) notice, approach the plaintiff with
a proposal to reschedule his debt.
[37] He recognises that he is required to state how the debt would be
repaid and to address the potential for success of debt rescheduling.
In this regard he states:
“
My
Debt Counsellor informs me that the Debt Counselling Rules System
(DCRS) implemented by the National Debt Mediation Association
(NDMA)
requires a repayment of 80% of my original bond repayment as a viable
proposal under the debt review. I am prepared to commit
to this
payment and if possible an annual escalation of 8% thereon, thereby
allowing me to recover from my present indebtedness.
This will be
subject to my Debt Counsellors final proposal, should the Court see
fit to exercise its discretion in my favour.”
[38] It is immediately apparent from this that it is not a firm
proposal. It is qualified by “if possible” and “subject
to my Debt Counsellor’s final proposal”. What is,
however, conspicuously absent from this paragraph is any
particularity
which would enable the court to assess whether there is
a prospect that he could afford to pay this or of the potential for
success
of debt counselling in general. In particular there is an
absence of any information relating to his income, investments and
other
assets or of his financial commitments and living expenses.
[39] Where a defendant chooses to be unduly coy about his financial
affairs it should not come as a surprise if the court should
hold
that it is not satisfied as to his
bona fides
and is not
convinced that his allegation of over-indebtedness is not merely a
delaying tactic. In the present case, on a careful
consideration of
the very limited information placed before the court I do not think
that I can be satisfied of the
bona fides
of the allegation of
over-indebtedness nor can I be satisfied that the plea for relief
under section 85 of the NCA is not merely
a delaying tactic.
Accordingly, in the exercise of my discretion, I decline to refer the
matter to a debt counsellor in terms of
section 85. In the
circumstances the plaintiff is entitled to judgment.
Declaration of executability
[40] In addition to judgment the plaintiff seeks an order declaring
executable the immovable property, being Erf 1633 Amsterdamhoek,
in
the Nelson Mandela Bay Metropolitan Municipality and Division of Port
Elizabeth, Province of the Eastern Cape
In extent: 1065 square metres
Held under Deed of Transfer No. T 46108/2005
[41] In the summons served upon the defendant on 11 March 2013 the
following was recorded:
“
(a)
your attention is drawn to section 26(1) of the Constitution of the
Republic of South Africa, 1996, which accords to everyone
the right
to have access to adequate housing. Should you claim that the order
for execution will infringe that right it is incumbent
on you to
place information supporting that claim before the court;
(b) in terms of section 26(3) of
the Constitution you may not be evicted from your home or your home
may not be declared executable
and sold in execution without an order
of court made after considering all the relevant circumstances;
(c) in terms of rule
46(1)(a)(ii) of the Rules of the High Courts of South Africa, no writ
of execution shall issue against your
primary residence (ie your
home), unless the court, having considered all the relevant
circumstances, orders execution against
such property;
(d) if you object to your home
being declared executable, you are hereby called upon to place facts
and submissions before the court
to enable the court to consider them
in terms of rule 46(1)(a)(ii) of the Rules of Court. Your failure to
do so may result in an
order declaring your home specially executable
being granted, consequent upon which your home may be sold in
execution.”
[42] This invitation was not taken up by the defendant in his
affidavit and no reference at all was made to any circumstances which
may impact upon the provisions of section 26 of the Constitution. In
the supplementary affidavit, however, the defendant states:
“
If the
property is sold in execution it will have an impact on my access to
adequate housing. It is virtually impossible in the
present financial
environment to obtain a mortgage bond and I do not have the resources
to place a deposit or offer security. In
order for me to rent a house
for my family (wife and 2 minor children) and myself, the estate
agents would require a credit bureax
check and I will not qualify for
rental.”
These averments constitute the only information placed before me by
the defendant.
[43] In the particulars of claim the plaintiff has alleged that the
defendant concluded the credit agreement with the plaintiff
in order
to obtain money to acquire and/or improve the property in issue. It
alleged further that the bond was registered in order
to provide
security to the plaintiff in respect of the principal debt, together
with certain other charges. These averments are
not contested.
[44] Before me Ms
Govender
argued, with reference to
the aforestated averments in the supplementary affidavit, that if the
property was sold in execution
it would have an impact on the
respondent’s access to adequate housing. Section 26 of the
Constitution provides that “everyone
has the right to have
access to adequate housing”. In
Standard Bank of South
Africa Limited v Saunderson and Others
2006 (2) SA 264
(SCA)
Cameron JA and Nugent JA emphasised at p. 273 para [16] that-
“
It
must be borne in mind that s 26(1) does not confer a right of access
to housing
per
se
but only a right of access to 'adequate' housing; and this concept of
necessity is relative …”
[45] They noted that in
Jaftha v Schoeman and Others; Van
Rooyen v Stoltz and Others
[2004] ZACC 25
;
2005 (2) SA 140
(CC) the
Constitutional Court had held that ownership, as opposed to
occupation, of a residence which constituted “adequate
housing”
was itself invasive of section 26(1). They thereafter proceeded to
emphasise at p. 274 para [17]:
“
But
Jaftha
did not decide that the ownership of all residential property is
protected by s 26(1); nor could it have done so bearing in mind
that
what constitutes 'adequate housing' is necessarily a fact-bound
enquiry. One need only postulate executing against a
luxury home
or a holiday home to see that this must be so, for there it cannot be
claimed that the process of execution will implicate
the right of
access to adequate housing at all.”
[46] In the present matter we know from the summons that the loan
agreement was in the amount of R621 000,00. The defendant
has
not favoured the court with any information as to the original
purchase price nor the current value of the home or the economic
standing of the suburb in which it is situated. I have not been told
of its size or the facilities which it offers. I am accordingly
unable to judge the standard of housing which is in issue.
[47] In any event, in the present case it is not disputed that the
loan was advanced and the bond registered in order to acquire
the
property in issue, alternatively to improve same. This consideration
alone weighs heavily in assessing whether or not to make
an order
declaring the property executable. Reverting to the judgment in
Saunderson
supra
Cameron JA and Nugent JA
addressed this issue at p. 274 para [19] where they stated:
“
But
even accepting for present purposes that execution against mortgaged
property could conflict with s 26(1) such cases are likely
to be
rare. It is particularly hard to conceive of instances where a
mortgagee's right to reclaim the debt from the property will
be
denied altogether; and it is therefore not surprising that the
Constitutional Court noted in
Jaftha
that in the absence of abuse of court procedure - and none is alleged
here - a sale in execution should ordinarily be permitted
against
even a home bonded for the debt sought to be reclaimed. Nor can the
approach differ depending on the reasons the property
owner might
have had for bonding the property, or the object on which the
loan was extended. “
[48] Later, at p. 275 para [20] they proceeded to state:
“
Until
the defendants in the cases before us could show that orders for
execution would infringe s 26(1) the bank was not called
on to
justify the grant of the orders. The sole fact that the property is
residential in character is not enough to found the conclusion
that
an infringement of s 26(1) will necessarily occur.”
[49] In the present instance the defendant has not shown that an
infringement of his right to “adequate housing” would
occur.
[50] Ms
Govender
further resorts to
Jaftha’s
case
supra
where Mokgoro J at p. 162I-J said:
“
The
balancing should not be seen as an all or nothing process. It should
not be that the execution is either granted or the creditor
does
not recover the money owed. Every effort should be made to find
creative alternatives which allow for debt recovery but
which use
execution only as a last resort.”
[51] I think these comments are correct and Cameron JA and Nugent JA
recognised at p. 275 para [20] that it was more easily possible
to
contemplate a court delaying execution where there was a real
prospect that the debt might yet be paid. I have no doubt that
section 85 of the NCA provides such a mechanism, however, by virtue
of the paucity of information which was placed before me, I
have
concluded that I am not able to exercise my discretion in the
defendant’s favour. In these circumstances the plaintiff
is
entitled to an order declaring the property to be executable.
Costs
[52] Clause 11.1 of the bond agreement provides that the plaintiff
shall be entitled to all costs, including attorney and client
costs
and collection commission incurred by the bank, inter alia, in
demanding or obtaining payment of all or any sums due by the
defendant to the bank and in suing for the recovery thereof. On this
basis Mr
Scott
seeks a costs order on a scale as
between attorney and client. Ms
Govender
was unable to
advance any argument as to why such a costs order should not be
granted. I think, by virtue of the agreement between
the parties,
that the defendant is entitled to such a costs order.
[53] In the result, the following order is made:
1. The defendant is ordered to pay to the plaintiff:
(a) The amount of
R563 355,80;
(b) Interest on the amount of R563 355,80, calculated daily and
compounded monthly, at the rate of 8,5% nominal per annum
with effect
from 7 March 2013 to the date of final payment, both dates inclusive;
2. The property being Erf 1633 Amsterdamhoek, in the Nelson Mandela
Bay Metropolitan Municipality and Division of Port Elizabeth,
Province of the Eastern Cape
In extent: 1065 square metres
Held under Deed of Transfer Number T46108/2005 is declared specially
executable.
3. The defendant is ordered to pay the plaintiff’s costs of the
suit on a scale as between attorney and client.
J W EKSTEEN
JUDGE OF THE HIGH COURT
Appearances:
For Plaintiff:
Adv
P Scott SC instructed by Spilkins, Port Elizabeth
For Defendant:
Adv Govender instructed by MSA Attorneys, Port Elizabeth