About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2022
>>
[2022] ZAGPPHC 595
|

|

Nedbank Limited v Mbambo and Another (4173/2015) [2022] ZAGPPHC 595 (3 August 2022)

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
GAUTENG
DIVISION, PRETORIA
CASE
NO:4173/2015
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES;NO
REVISED
3
August 2022
In
the matter between:
NEDBANK
LIMITED                                                                     Plaintiff
and
TERRANCE
BONNY MBAMBO

First Defendant
(ID
NO: [....])
CHITHEKILE
SYLVIA

Second Defendant
(ID
NO: [....])
JUDGMENT
RAULINGA
J
BACKGROUND
[1]
The matter stems from a written loan
agreement concluded between Nedbank, the plaintiff, and TB and CS
Mbambo, the defendants.
The plaintiff pleads that the
defendants are in breach of the loan agreement in that the defendants
failed to honor their payment
obligations in terms of the loan
agreement.  As such, the plaintiff seeks judgment against the
defendants for payment of R2
624 590.02, together with interest, and
an order declaring the mortgaged residential property to be specially
executable in favor
of the plaintiff.
[2]
The
loan was secured by a first and second concern rig mortgage bonds in
favour of the plaintiff that were registered over the defendants'

mortgaged property. Accordingly, the loan agreement therefore
constitutes a mortgage agreement as defined in section 1 of the
National Credit Act (the NCA),
[1]
a credit transaction in terms of section 8(4)(d) of the NCA and a
credit agreement in terms of section 1(b) of the NCA.  The
NCA
is therefore the primary applicable legislation.
ISSUES
[3]
Pursuant to a referral to evidence on the plaintiff’s quantum
by
the Judge on 22 March 2022, the plaintiff called two witnesses.
From the evidence led by the witnesses, a number of issues
were
raised with the overarching issue being the plaintiff’s claim
that the defendants breached their obligations in terms
of the loan
agreement.  From thereon, the following issues arose.
[4]
The
defendants contended that the plaintiff had not complied with the
provisions of section 129 of the NCA in that the section 129
noticed
is arrived at only by virtue of the plaintiff having accelerated all
amounts outstanding in terms of the mortgage bonds
at a time when the
defendants were not in arrears with the bond account.  The
defendants further contended that the action
did not comply with the
Uniform Rules of Court 46(A) in that no reserve price was
stipulated.  For this argument, the defendants
relied on the
ratio in
Absa
Bank Limited v Mokebe; Absa Bank Limited v Kobe; Absa Bank Limited v
Vokwani; Standard Bank of South Africa Limited v Colombick
and
Another
.
[2]
[5]
Another point of contention was the evidence led by the witnesses
called
by the plaintiff and the argument that given that the evidence
was of an expert nature, it was inadmissible.  This arose after

the plaintiff’s witness testified that the statement of account
prepared by him contains not only a computer-generated statement
but
also manual calculations undertaken by him in respect of the
interest.
[6]
Ultimately, a reading of the papers would determine the crux of the
defendants’
argument being that no alternative measures to
satisfy the judgment debt were considered by the plaintiff bank other
than the sale
of the defendants’ residential property.
Below, the above mentioned issues will be unpacked.
EVIDENCE
[7]
The evidence led by the plaintiffs’ witnesses made it evident
that
it was indisputable that the defendants had failed to honour the
agreement between them and the plaintiff in that they had failed
to
pay in accordance with the agreement entered into between them and
the plaintiff.  Listening to the evidence of Mr. Kemp,
—
one of the witnesses of the plaintiff — it was clear that the
amounts testified by him were a question of fact and
were at no stage
disputed by the defendants.  Moreover, the evidence of Mr. Kemp
in my view also could not be said to constitute
expert evidence as
claimed by the defendants given that Mr. Kemp did not testify as to
his opinion on the amounts paid by the defendants
but actual facts
corroborated by the figures.  Even though Mr. Kemp did insert
the numbers manually into the computer system
of the plaintiff, it
was the computer that generated the capital amount owed by the
defendants.  Therefore, upon listening
to the evidence tendered
by Mr. Kemp, I agree with the plaintiff that none of it could be said
to constitute expert evidence as
none of the evidence led by Mr. Kemp
was opinion based but rather, it was based on the numbers and figures
before him generated
by the plaintiff’s computer system.
Moreover, and importantly, the defendants have also yet to
discharge the onus that
the certificate of balance is inaccurate.
UNIFORM
RULE 46(A)
[8]
Rule 46(A) deals with the procedural rules for executing a judgment
debt
against residential immovable property.  Rule 46A focuses
on two main aspects: determining if it is justified to sell the
debtor’s home in execution and, if a sale is ordered, setting a
reserve price at which the property is to be auctioned.
[9]
As it requires a plaintiff to seek a court order declaring immovable
property
specifically executable, Rule 46 of the Uniform Rules of
Court added a new sub-step during the execution of immovable
property.
In addition to adding a new sub-step, Rule 46 also
added an extra level on judicial oversight into the execution
process.
[10]
In order to
ensure compliance with the right to access housing in terms of
section 26 of the Constitution, judicial oversight is
required before
any immovable property is declared executable and this requirement
was as such incorporated into the then Rule
46(1).
Subsequently, the Constitutional Court in
Gundwana
v Steko Development
[3]
held that it was unconstitutional for the registrar of a court to
declare immovable property executable when ordering default judgment,

and that only a court could declare a judgment debtor’s primary
residence executable.
[11]
Gundwana,
together with other judgments, therefore resulted in
various amendments to Rule 46.  In 2010, Rule 46(a)(ii) was
amended to
provide that, even if immovable property had been declared
specially executable, if it was the primary residence of the judgment

debtor, the court had to consider ‘all relevant circumstances’
before deciding whether to authorise a sale in execution.

Finally, a new Rule 46A was introduced in December 2017.  Apart
from requiring court oversight before permitting execution
against a
debtor’s primary residence, the new rule also required the
court to ‘consider alternative means by the judgment
debtor of
satisfying the judgment debt, other than execution  …’
(Rule 46A(2)(a)(ii)).  In addition, this
rule permitted a court,
in appropriate circumstances, to determine conditions to be included
in the conditions of sale and to set
a reserve price for the sale
(Rule 46A(8)).
[12]
While the
original Rule 46 has changed considerably in order to assist a debtor
in retaining his or her residential property, even
the current Rule
46A can be seen to introduce a limitation to section 26 of the
Constitution in that it allows for the attachment
of a debtor’s
primary residence.
[4]
This possibly controversial element is that the right of access to
adequate housing is therefore not absolute, as this rule
still allows
for an owner to lose a home in certain circumstances.
[13]
It must be noted that section 36 of the Constitution provides that
the rights contained
in the Bill of Rights are subject to
limitations, on condition that such limitations must be reasonable
and justifiable in an open
and democratic society based on human
dignity, equality and freedom.  The application of this section
to a default on a mortgage
loan agreement can be interpreted as a
measure to balance the rights of a creditor against the protection
given to debtors by section
26, insofar as possible, prior to the
foreclosure process being explored.
[14]
As the
court in
Mokebe
held,
the purpose of the NCA is to balance the rights and obligations of
consumers and credit providers.  This balancing act
is difficult
as the rights of the credit providers are driven by profit, while
that of consumers are driven by the ability to access
the credit
market’. Most mortgage loan agreements entered into by
individuals fall within the ambit of the NCA, and this
balancing act
can be seen in such instances, where the rights of both parties need
to be considered and aligned with the constitutional
provisions of
section 26.  Although a credit provider, in agreements where the
consumer has offered their house as security,
has the right to
foreclose on the property, should the consumer fail to adhere to the
rights and obligations contained in the said
credit agreement, this
right can only be exercised as a last resort.  In both the
Mokebe
decision, and the earlier
Nkata
v Firstrand Bank
[5]
decision, the NCA has been interpreted so as to provide as much
relief as possible to indebted consumers faced with the loss of
their
primary residences.
[15]
It is also for this reason that the NCA contains further attempts at
the prevention of
the execution of a primary residence, whilst still
acknowledging the rights and interests of the creditor.  An
example of
such measures are the debt review proceedings contained in
sections 86 and 88 of the NCA, which aim to acknowledge and enforce
the terms of the initial agreement whilst ensuring that the consumer
remains protected from foreclosure.  The purpose of this
remedy
is to achieve an end result which provides an amicable solution to a
breach of contract for all parties concerned, by extending
the
repayment period of the loan.  Although this will increase the
amount of interest due to the creditor, it nevertheless
protects the
consumer from the loss of their house.
[16]
In the
Mokebe
matter the Full Bench sought to resolve the
issue of whether an application for a monetary judgment and an order
of execution against
immovable property must be brought
simultaneously or separately before a court.  The court
considered the history of the foreclosure
process and expressed
concern over the lack of consistency and clarity.  This lack of
clarity resulted in different approaches
by creditors for the
enforcement of their claims.  In particular, while some
creditors initially proceeded to obtain a monetary
judgment against
their debtors, and after some months proceeded to obtain an order of
execution (ie, separately); other creditors
proceeded to obtain
monetary judgment and execution in a single application (ie,
simultaneously).
[17]
The court held that there was a need for certainty and consistency in
practice and stated
that an application for a monetary judgment and
an order of execution must be brought simultaneously.  The court
confirmed
that the monetary judgment is an intrinsic part of the
cause of action in foreclosure cases and it is inextricably linked to
the
claim for an order of execution.  It was thus both necessary
and desirable for these issues to be heard simultaneously and
not
piecemeal. The court further confirmed that it was the duty of the
creditor to bring its entire case, including monetary and
execution
claims, before the court in a single proceeding.
SECTION 129 OF NCA
[18]
Section 129(1) provides –
“
Required
procedures before debt enforcement — (1) If the consumer is in
default under a credit agreement, the credit provider
—
(a) may draw the default
to the notice of the consumer in writing and propose that the
consumer refer the credit agreement to a
debt counsellor, alternative
dispute resolution agent, consumer court or ombud with jurisdiction,
with the intent that the parties
resolve any dispute under the
agreement or develop and agree on a plan to bring the payments under
the agreement up to date; and
(b)
subject to section 130(2), may not commence any legal proceedings to
enforce the agreement before –
(i) first providing
notice to the consumer, as contemplated in paragraph (a), or in
section 86(10), as the case may be; and
(ii) meeting any further
requirements set out in section 130.”
[19]
Having regard to the above, it is evident
that a section 129(1)(a) notice has to be delivered to the consumer
prior to enforcement
proceedings and the section 129(1)(a) notice is
therefore a required notice prior to cancellation of a credit
agreement.
The defendants however contend that there has been
no compliance with the provisions of section 129(1)(a) and argue that
proper
notice was therefore not effected.
[20]
When
having regard to disputes pertaining proper delivery of a section 129
notice, the Constitutional Court’s decision in
Kubyana
v Standard Bank of South Africa Ltd
[6]
is dispositive.
In
casu,
the
Court had to determine the necessary steps a credit provider had to
take in order to ensure that a notice of default reached
a consumer
before it could commence litigation and further what a credit
provider had to prove in order to satisfy a court that
it had
discharged its obligation to effect proper delivery of a statutory
notice.  The Court held that a consumer could not
claim
non-delivery of a notice if she has been unreasonably remiss in
failing to engage with the notice and that the Act did not
require a
credit provider to bring the contents of a section 129 notice to the
subjective attention of the consumer.
[21]
Having regard to the above,
in
casu,
the defendants never disputed
having received the section 129 notices, which, bearing in mind the
scheme of section 129, is the
essence of the section.  Having
regard to the case law, in my view, if no dispute exists regarding
delivery of a section 129
notice, a judgment debtor cannot claim
non-compliance with the section given that delivery of the notice is
the very essence of
the section.  As such, once delivery is
objectively met, there can be no dispute regarding compliance with
the section.
CONCLUSION
[22]
Regarding
the defendants’ argument that a reserve price was not set, the
matter in
Mokebe
is
dispositive as there, the court held that a reserve price needed to
be set in instances where the property in question was the
primary
residence of the debtors who were individual consumers and natural
persons; as is the case in this matter.  Compliance
with setting
a reserve price should have therefore been adhered to by the
plaintiff bank but the court in
Mokebe
did
however provide that the facts of a particular case may warrant
deviation from the general rule of having to set a reserve price.
[7]
[23]
Ultimately,
when having holistic regard to the matter, it appears that the
defendants primary issue of contention is the alleged
failure on the
part of the plaintiff bank to consider other means to satisfy the
debt due to it other than seeking to have the
primary residence of
the defendants declared specially executable.  As was held by
Froneman J in
Gundwana,
[8]
if
there are no other proportionate means to achieve the same end (being
to exact payment of the judgment debt due), execution may
not be
avoided.  This
ratio
is
consistent with Rule 46A(8)(a).
[9]
My view therefore is that the onus now lies on the plaintiff bank to
show that there are no other reasonable measures that
can be taken
other than undergoing the execution process to exact payment of the
judgment debt.  Whether other reasonable
and workable measures
exist other than the execution process to exact payment would be for
the court to decide exercising the necessary
judicial discretion,
having regard to the factors which need to be considered by a court
when declaring an immovable property specially
executable.
[10]
[24]
As the court in
Mokebe
held, in matters where execution of
property to satisfy a judgment debt is sought, a balance needs to be
struck between the interest
of the commercial institution on the one
hand, and the importance of a debtor’s right to adequate
housing on the other.
However,
in
casu,
from a reading of the papers, it
appears that the defendants have relied on a number of interlocutory
skirmishes to stave off execution
and have in the process infringed
the rights of the plaintiff bank to seek to exact payment of the
judgment debt.
[25]
In the circumstance, the plaintiff succeeds in its action and
accordingly an order is made in
its favor.
[25.1]
The plaintiff’s action succeeds. The defendants are
ordered to
pay the plaintiff’s costs.
T. J RAULINGA
JUDGE OF THE HIGH
COURT
Appearances
Applicant’s
Counsel

:
G T Avvakoumides SC
Applicant’s
Attorneys

: Snyman de Jager INC
Respondent’s
Counsel

: S S Cohen
Respondent’s
Attorney

: Messrs. Ledwaba Attorneys
Date
of hearing

: 22 March 2022
Date
of judgment

: 03 August 2022
[1]
34 of 2005.
[2]
2018 (6) SA 492 (GJ).
[3]
2011 (3) SA 608
(CC).
[4]
Section
26 of the Constitution provides that ‘everyone has the right
to have access to adequate housing’.
[5]
2016 (4) SA 257 (CC).
[6]
2014 (3) SA 56 (CC).
[7]
Mokebe
at
para 59.
[8]
Gundwana
v Steko Development CC and Others
2011
(3) SA 608 (CC).
[9]
This
Rule states that a court is enabled in terms of the amended rule to
‘order execution against the primary residence
of a judgment
debtor if there is no other satisfactory means of satisfying the
judgment debt.’
[10]
See
First
Rand Bank Ltd v Folscher and Another
[2011] ZAGPPHC 79.