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[2023] ZAKZPHC 22
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Custom Capital Cash Advances (Pty) Ltd v Mundell and Others (7567/2020P) [2023] ZAKZPHC 22 (3 March 2023)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NUMBER: 7567/2020P
In
the matter between:
CUSTOM
CAPITAL CASH ADVANCES (PTY)
LTD
APPLICANT
And
GREGORY
JOHN
MUNDELL
FIRST RESPONDENT
CLAIRE
CATHERINE MUNDELL
SECOND RESPONDENT
ABSA
BANK
LIMITED
THIRD RESPONDENT
UMGENI
LOCAL MUNICIPALITY
FOURTH RESPONDENT
JUDGMENT
P
C BEZUIDENHOUT J
:
[1]
During August, September and October 2019 Applicant concluded three
cash advance facility
agreements with Pristine Mineral Water CC.
Second Respondent was the sole member of the close corporation.
Provisional sentence
was obtained against the close corporation in
the amounts of R 321 870.98, R 375 520.84 and R 751 041.69 plus
interest and costs
on 21 October 2020. The provisional order became
final and the close corporation was placed in liquidation. No
payments were made.
[2]
First and Second Respondents stood surety for the principal’s
debt and judgment
was granted against them in the said amounts
referred to above on 14 June 2021. Only a few small repayments were
made by First
and Second Respondents.
[3]
Applicant now wishes to have a property which is owned by First
Respondent, namely
Portion 43 (of 42) of the Farm Lot [....] No.
[....], registration division FT, province of KwaZulu-Natal in extent
21,3626 hectares
held by Deed of Transfer No. [....] Situated at
Crestwood Farm, Curries Post Road curries Post, KwaZulu-Natal
declared executable.
It is common cause that Third Respondent has a
bond over the said property.
[4]
There is on the papers a dispute as to whether the said property on
which it is contended
a bed a breakfast is operated is the primary
residence of First Respondent as alleged by him. It is however common
cause between
the parties that as the matter is to be argued on the
papers and dealt with in terms of the principle set out in the
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA
623
(A) at 634 H-I. It is therefore accepted that the property is the
primary residence of First Respondent.
[5]
The application is therefore brought in terms of the provisions of
Rule 46A of the
Rules of this court against First Respondent. The
application is opposed by First Respondent.
[6]
It was submitted by Mr. Hoar that the home was not the primary
residence that First
Respondent was renting a home in Cotswold Downs
Golf Estate in Hillcrest for R 25 000.00 a month where his wife and
children were
residing and his children attending private schools. He
therefore submitted that if the property is sold it would ensure that
an
amount of R 50 000.00 is freed up monthly for First Respondent to
pay the debt which is owing. It was further submitted that the
debt
has to be paid and the property is not the only place where First
Respondent can stay. It is used for commercial purposes.
The movables
in the property is owned by a Trust and in section 65 proceedings
First and Second Respondent had no disposable income.
[7]
There is a valuation of the property that was done in 2019 when the
property was valued
at approximately R 11 million. There is a bond of
R 8, 39 million registered against the property. It was submitted
that First
Respondent was selective on what he placed before court
and that the municipal evaluation was approximately R 13 million. It
was
submitted that the debt had to be paid, that Applicant has made
all attempts but have received a number of
nulla bona
returns
and that it accordingly has no other means except to execute against
the immovable property in an attempt to obtain payment
of its
judgment. It was further submitted that the business of the close
corporation which was liquidated was moved to First Respondent
and
continued doing the same business. It was submitted that a reserve
price of R 8.5 million should be set.
[8]
It was submitted on behalf of First Respondent that it had to be
accepted that it
was the primary residence of First Respondent. It
was further submitted that there was no valuation under oath and in
this regard
I was referred to the decision of Nedbank v Msibi
2021
(4) SA 297
(J). It was submitted that the valuation had to be
confirmed under oath and also that the valuation which is attached is
some years
old. It was accordingly submitted that as there had not
been compliance with the provisions of Rule 46A the application must
be
dismissed with costs.
[9]
In reply Mr Hoar submitted that Rule 46A mainly refers to judgments
which are bank
judgments and not as in the present case where it
relates to another debt. First Respondent is not an indigent person.
It was submitted
that it would be appropriate if the property is
declared executable as First Respondent would not suffer any
prejudice if it is
done. First Respondent also failed to disclose
what he earned from the Bed and Breakfast which was operated on the
said premises.
As appears from page 147 of the papers First
Respondent only made certain small payments between R 3 000.00 and R
5 000.00 on 7
occasions between April and July 2022.
[10]
The issues which have to be considered when an application is brought
in terms of the provisions
of Rule 46A are clearly set out in the
said Rule and it is not necessary for it to be repeated herein. It is
indeed so that in
this matter it is not a property to be declared
executable by a bank due to the non-payment of a bond but that it is
due to a suretyship
which had been signed. Therefore there are indeed
nulla bona
returns indicating that there are no movable
property which can be sold to satisfy the debt.
[11]
It is apparent form a reading of the papers that indeed the furniture
etc. has been placed in
a Trust and that First Respondent has only
made small payments and has insured that there is nothing of value
which can be attached
to satisfy the payment of the debt.
[12]
The valuation is dated 2019 which is approximately 4 years old. There
is much that could have
happened to the said property in the past 4
years. It could have increased in value substantially or it could
have decreased in
value. One would have expected Applicant when
bringing such an application to at least provide a more updated
valuation of the
property which it wishes to have declared
executable. If it was impossible to do so because of problems with
access to the property
as was submitted may be a possibility by Mr
Hoar then it should have been dealt with in the papers. There is
nothing in the papers
why only such an old valuation is used. It has
been submitted by Mr Hoar that a reserve price of R 8,5 million
should be set. If
this is done and that price is achieved it would
result in the bond being paid and there would be no excess for the
debt owing
to Applicant to be paid. It would therefore appear that
there would be no benefit to Applicant if that is done and it seems
to
me to be a pointless exercise to sell the property at a reserve
price of R 8,5 million when there will be no benefit to Applicant
and
the only benefit that could be achieved would be that First
Respondent loses his property.
[13]
The practice in this division is that a valuation should not be older
than six months. It is
very difficult in these circumstances to
establish whether indeed there is any benefit to Applicant if the
property is to be sold.
If the value of the property has increased
then a higher reserve price can be set which could then indeed be to
the benefit of
Applicant.
[14]
I agree with the submission by Mr Hoar that First and Second
Respondent must pay the judgment
granted against them. It does appear
that they are leading a lavish lifestyle while this debt is not being
paid and therefore the
frustration of Applicant. First and Second
Respondent are maintaining two expensive properties at the same time.
However as set
out above it does not appear to me that there would be
any benefit in granting the relief claimed as there would be no
benefit
to Applicant due to the old valuation.
[15]
It would not be to the benefit of any of the parties if no reserve
price is set and it is necessary
that Applicant provide an updated
valuation so as to allow the court to establish whether indeed it
would be to the benefit of
the parties if the property is sold and
secondly what the reserve price should be.
[16]
It would appear to me that in the present matter the provisions of
section 65 of the Magistrate’s
Courts Act would be of more
assistance to establish whether payment can be made by First and
Second Respondent or not. Section
65M of the Magistrate’s Court
Act will also be applicable and further in terms of section 65D of
the Magistrate’s Court
Act First and Second Respondent can be
cross examined after testifying under oath about their financial
affairs. The Magistrate
can accept evidence which he/she may find
necessary to determine the debtors financial position or their
ability to pay the judgment
debt. It would appear that an
interrogation in terms of section 65 would be more appropriate in
these circumstances. It can then
be established if First and Second
Respondents are living a lavish life style and overspending and
evading payment of their debt
as alleged.
[17]
In the circumstances in my view it will not be appropriate at this
stage with the information
which is at the courts disposal to grant
an order in terms of the notice of motion.
[18]
I have also considered whether the matter should be adjourned to
allow Applicant to supplement
its papers but for the reasons set out
above have decided not to do so.
[19]
The issue of costs however remain. It is understandable in the
circumstances why Applicant has
approached this Court for the relief
sought. However although Frist Respondent may be successful in the
sense that no order is
granted in my view the normal order that costs
should follow the cause should not be granted and no costs order
should be made.
Accordingly the following
order is made:
The application is
dismissed.
P
C BEZUIDENHOUT J.
JUDGMENT
RESERVED:
17 FEBRUARY 2023
JUDGMENT
HANDED DOWN:
3 MARCH 2023
COUNSELF
FOR APPLICANT:
S
HOAR
Instructed
by:
Romer Attorneys
Kloof
Ref:
Mrs Romer/rs/C20/08 (C)
c/o:
J Leslie Smith & Company Inc.
Pietermaritzburg
Ref:
A Ganas/Prisha/21JL0022
Tel:
033 845 9700
COUNSEL
FOR 1
ST
& 2
ND
RESPONDENTS: N S
BEKET
Instructed
by:
Lester Hall, Fletcher Inc
Kloof
Ref:
PR113/002/CDB/YJ
Tel:
031 818 7280
c/o:
Viv Greene Attorneys
Pietermaritzburg
Ref:
V Greene
Tel:
033 342 2766