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[2013] ZAECPEHC 50
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Nedbank Ltd v Price and Others (3204/12) [2013] ZAECPEHC 50 (17 October 2013)
7
Not
Reportable
IN THE HIGH COURT OF
SOUTH AFRICA
EASTERN CAPE –
PORT ELIZABETH
Case No: 3204/12
In the matter between:
NEDBANK LIMITED
..................................................................
Plaintiff
and
JOHN ERNEST PRICE
N.O.
.............................................
First
Defendant
SHAUNAGH MARGARET
McEVOY N.O.
........................
Second
Defendant
ALEXANDER GEORGE
PRINCE N.O.
...............................
Third
Defendant
FRANCOIS FOUCHÉ
N.O.
............................................
Fourth
Defendant
JOHN ERNEST PRICE
.....................................................
Fifth
Defendant
SHAUNAGH MARGARET
McEVOY
..................................
Sixth
Defendant
JUDGMENT
REVELAS J:
[1] This is an
application for summary judgment. The plaintiff bank had entered into
a loan agreement with the Tsitsikamma Trust
(the Trust) on 9 December
2008, in terms whereof it advanced R5 million to the Trust. The loan
was secured by a mortgage bond registered
over a property in Walmer
(the property). The Trust fell into arrears with its monthly
repayments instalments of R69 106.94
per month. As at 13 June
2012 the consolidated balance of the debt owing by the Trust was
R4 614 912.96 plus finance
charges and the Trust was in
arrears for over four months. The plaintiff subsequently instituted
action for payment of the consolidated
debt.
[2] The first, second,
third and fourth defendants were cited in their capacities as
trustees of the Trust. The fifth and sixth
defendants, who are
married to each other in community of property, were cited as
sureties who bound themselves as co-principal
debtors for the
repayment of the loan. The fifth and sixth respondents live in the
property. Apart from the amount claimed and
interest thereon, the
plaintiff also seeks an order that the property be declared
executable.
[3] Service of the
summons herein was effected in terms of a court order, prescribing
certain forms of service, other than personal
such as service by
registered mail and postings on a gate. The order was complied with
and all the defendants are properly before
court. The order was
granted pursuant to an application brought by the by the plaintiff on
the basis that the defendants, and the
fifth defendant in particular,
were deliberately evading personal service. This assertion was
supported by comments on the Sheriff’s
returns of service. An
appearance to defend was entered and the plaintiff applied for
summary judgment. The attorneys for all the
defendant’s
withdrew on 26 September 2013.
[4] The application was
postponed on several occasions, the last as a result of the fifth
defendant (Mr Price) stating that he was
ill. Mr Price advised that
he suffered from terminal prostate cancer. No medical evidence to
that effect, or to what extent his
health status would impair his
abilities to argue his defence, was advanced when the matter came
before me. Mr Price sought a further
postponement for two weeks which
I declined to grant and he appeared in person. The matter had been
postponed previously for the
same reason. Mr Price did not give any
acceptable explanation for not instructing another attorney or why
his erstwhile attorneys
could not act on his behalf. According to him
he could afford legal representation. Mr Price is also not the only
trustee who was
in a position to instruct attorneys. The sixth
defendant, his wife, could have done so. I did not believe that any
purpose would
have been be served by postponing the matter. Mr
Price’s physical condition, on his own version, was hardly
likely to improve
within two weeks.
[5] It was not in
dispute that the Trust owed the bank the sum sued for. Mr Price
opposed the application for summary judgment on
the following
grounds:
(5.1) Summary judgment
would inevitably infringe his right to adequate housing and not to be
evicted from his home, which rights
are protected by section 26 of
the Constitution of this country.
(5.2) He has made
alternative arrangements with the plaintiff regarding the repayment
of his arrears.
(5.3) The plaintiff’s
attorneys of record had acted for the Trust in 2011 and were now
acting on behalf of the plaintiff against
the Trust and thus there
was a serious conflict of interests.
(5.4) The failure to
meet the Trust’s obligations to the plaintiff was temporary,
and could be remedied. Mr Price maintained
that he had the means to
repay the loan. Hence, as I understood his argument, the action
instituted was precipitous. If summary
judgment was granted the Trust
would be seriously prejudiced since it would not be afforded a
further loan from Standard Bank,
which would also be secured by a
second bond registered over the property. (This ground was not raised
on the papers but only during
argument).
[6] Mr Price’s
reliance on the rights protected by section 26 of the Constitution is
misplaced. The property in question is
valued (according to Mr Price)
at R12 million. In my opinion, the drafters of the Constitution did
not have such expensive homes
in mind and this ground does not
constitute a
bona fide
defence.
[7] The second ground,
namely that he had made an alternative arrangement with employees of
the plaintiff i.e. that if he paid up
his arrears all litigation
against him would be ceased was pursued at length during argument.
Two amounts (R252 000.000 and
R26 000.00 respectively and
totalling R278 000.00) had in fact been paid to the plaintiff in
September 2013 a month ago,
following e-mail correspondence between
Mr Price and two employees of the plaintiff bank. The e-mail
exchanges do not reflect that
such an agreement arrived at. The
aforesaid amounts in any event only covered the arrears and no
repayments towards the actual
loan amount was made thereafter. Even
though the arrears were paid only a month ago, the fact remains and
no payments were made
in October. The Trust therefore remains in
arrears and according to and Mr Price, further payments to be made by
him would be dependent
on him obtaining a further loan from Standard
Bank. The Trust is at this point still in breach of the loan
agreement which entitles
the plaintiff to enforce the entire loan
amount.
[8] The third ground
(the alleged conflict of interests) was addressed by Mr Price in an
affidavit in the form of a scathing attack
on the integrity
plaintiff’s attorneys of record. The plaintiff bank was an
existing client of these attorneys, also in many
similar matters,
when the Trust was represented by them in only one case during 2011.
This matter had no relevance to, or impacted
in any way on the
plaintiff’s present litigation against the Trust. No conflict
of interests was demonstrated on the facts
before me. The objection
appears to be one only on principle and is not founded on any real
conflict of interests or any actual
prejudice suffered as a result of
the Trust once also being represented by the plaintiff’s
attorneys of record. In my view,
if Mr Price was really convinced
that the attorneys in question had acted unethically, he should have
raised his concerns with
the Law Society. His complaint however, does
not extinguish the Trust’s debt.
[9] Mr Price’s
assertion that he (or the Trust has the means to pay and therefore
judgment should not be granted against the
Trust, flies in the face
of his statement that he actually needs a further loan to obtain
funds. It is hardly likely that Standard
Bank would approve a second
bond over the Trust’s property, in order to finance repayment
of the first mortgage bond in favour
of the plaintiff. Such an
uncertain eventuality in the future is also not a
bona fide
defence.
[10] None of the
grounds raised above constitute a
bona fide
defence. I
therefore grant summary judgment against the defendants jointly and
severally, the one paying the other to be absolved
for:
1. Payment to the
plaintiff of the sum of R4 614 912.96.
2. Payment of interest
on the said amount of R4 614 912.96 at the variable
mortgage bond rate, currently 7.25% per annum
charged by the
plaintiff from time to time, from 1 July 2012 to date of payment.
3. The immovable
property specially hypothecated, being the Remainder of Erf 3875,
Walmer, in the Nelson Mandela Metropolitan Municipality,
Division of
Port Elizabeth, Eastern Cape Province in extent 1989 (one thousand
nine hundred and eighty nine square metres), held
by Deed of Transfer
No. T. 3551/09, is hereby declared executable.
4. Costs of suit to be
taxed as between attorney and client, including the costs occasioned
by the postponement on 25 September
2013.
__________________
E REVELAS
Judge of the High Court
Counsel for the
Plaintiff: Adv Zietsman
Port Elizabeth
Instructed by: Pagdens
Attorneys
Port Elizabeth
For the Defendant’s:
Mr Ernest Price in person
Date Heard: 15 October
2013
Date Delivered: 17
October 2013