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[2021] ZAGPJHC 456
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The Standard Bank of South Africa Limited v Sithole and Another (17658/202) [2021] ZAGPJHC 456 (23 September 2021)
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER:
17658/202
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
YES
23/09/2021
In the matter between:
THE
STANDARD BANK OF SOUTH AFRICA LIMITED
Applicant
And
SOLOMON
SITHOLE
First Respondent
NOBESUTHU
SITHOLE
Second Respondent
JUDGMENT
MINNAAR
AJ:
1.
The applicant seeks the following relief:
Claim
A: Against the first and second respondents, jointly and severally,
the one paying the other to be absolved, for:
1.1.
Payment of the sum of R1 697 905.78
together with interest thereon at the rate of 5.75% per annum,
calculated daily and
compounded monthly in arrears from 12 May 2020
to date of payment, together with monthly insurance premiums of
R2 847.74;
1.2.
Declaring the following immovable property
executable:
Remaining Extent of Erf
[....] Hurlingham Township, Registration Division I.R, the Province
of Gauteng, measuring 2568 (two thousand
five hundred and
sixty-eight) square metres, held by Deed of Transfer No. T[....]
(“the Immovable Property”);
1.3.
Authorising the Registrar of this court to
issue a Warrant of Execution against the Immovable Property of the
first and second respondents;
1.4.
Setting a reserve price in the amount of
R3 525 000.00;
1.5.
Costs of the application on the attorney
and own client scale.
Claim B as against the
first respondent, for:
1.6.
Payment of the sum of R215 492.33
together with interest thereon at the rate of 7.75% per annum,
calculated daily and compounded
monthly in arrears from 25 April 2020
to date of final payment;
1.7.
Costs of the application on the attorney
and own client scale.
2.
Claim A is premised on a Liberator
Agreement concluded between the parties on 26 June 2007. As security
for the respondents’
indebtedness under the Liberator
Agreement, the applicant holds five continuing covering mortgage
bonds over the Immovable Property.
3.
Claim B is premised on an overdraft
facility entered into between the applicant and the first respondent
during May 2015.
4.
The conclusion and existence of the
agreements are common cause between the parties. The respondents,
through the first respondent
(being the deponent to the answering
affidavit) states that he does not dispute the applicant’s
claim in principle, and he
is willing to pay it. He further admits
that they are in breach and states that they are fully intended to
make the payments that
were not made and that they will continue to
make payments as cash flow permits.
5.
As at 28 January 2020 the arrears in terms
of the Liberator Agreement was an amount of R145 758.54. I have
requested updated
arrears to be uploaded. I am of the view that this
should be a requirement in all foreclosure applications concerning
primary residences.
This updated evidence will assist the court in
determining the seriousness of consumers in protecting their primary
residence.
If, for instance, there was a serious effort by a
respondent to continue to make payment, then I am of the view that
such positive
approach should be to the benefit of a respondent. The
contrary is however also true.
6.
In terms of the updated arrears, the
arrears have escalated. As at 17 August 2021 the arrears in terms of
the Liberator Agreement,
was an amount of R1 401 739.49.
7.
Despite admitting their breach and
undertaking to rectify same when their cash flow allows for it, the
respondents, as they are
entitled, raised various technical defences.
Save for a possible defence of reckless credit, the other defences
raised are of no
assistance to the respondents.
8.
With regard to the alleged reckless credit,
it is the case of the respondents that no credit assessment, as
provided for in sections
80 and 81 of the National Credit Act 34 of
2005 (“the NCA”) was done and as such that the agreements
should be declared
reckless in terms of the provisions of section 83
of the NCA. On a reading of the replying affidavit, evidence is
provided that
assessments were in fact done in respect of both the
Liberator Agreement and the overdraft facility. The respondents’
stance
is that this court should ignore the evidence presented in the
replying affidavit pertaining to the assessments that were done as
same should have been included in the founding affidavit. I cannot
agree with the respondents in this regard. It cannot be expected
of
an applicant to foresee what defence will be raised in an answering
affidavit and to counter same by addressing all possible
defence in
the founding affidavit. The respondents raised this defence in their
answering affidavit and as such the applicant was
fully entitled to
reply to same.
9.
The respondents’ reliance on alleged
reckless credit and/or over indebtedness at this stage, seems
misplaced if one has regard
to their unequivocal undertaking to still
settle the arrears as and when their cash flow permits same. The
respondents cannot be
allowed to have the best of both worlds. It is
evident that they would wish to honour their obligations in terms of
the agreement
and as such the reliance on this defence does not
assist the respondents in any way. The respondents have failed to
make out a
case that an order as envisaged in section 83 of the NCA
should be granted.
10.
The only real defence raised by the
respondents is that they do have alternative means to satisfy the
judgment debt. The evidence
presented on this aspect by the
respondents is impressive as it speaks of millions of rands of coal,
shares and immovable property.
The hard reality is however that no
attempts were made to liquidate any of these assets to facilitate
payments towards the increasing
arrears.
11.
On 20 August 2020, the first respondent,
after receipt of the application, made an offer to settle the arrears
by the immediate
payment of R100 000.00 and payment of the
balance over a period of 24 months. According to the first respondent
no response
was forthcoming and as such he elected not to make the
payment. From the replying affidavit it is evident that there was a
reply,
and a proposal was made that a formal settlement agreement be
concluded. This was to no avail. The stance adopted by the first
respondents does not show any seriousness on behalf of the
respondents in securing their primary residence. The contrary is true
as the arrears have increased to a staggering amount.
12.
There is a challenge as to whether the
Immovable Property is in fact the primary residence of the first
respondent. Nothing turns
on this point as it is clear that the
Immovable Property is in fact the primary residence of at least the
second respondent.
13.
The
provisions of Rule 46A of the Uniform Rules of Court now provides
some sort of protection to investments made in a primary residence
as
a reserve price need to be set. This position, and the approach to be
adopted was clearly enunciated by the Full Court in
Absa
Bank Ltd v Mokebe and Related Cases
.
[1]
14.
According to the applicant, the Immovable
Property has the following relevant values and obligations:
14.1 Market
value:
R5 400 000.00
14.2 Forced sale
value:
R3 525 000.00
14.3 Municipal
value:
R6 082 000.00
14.4 Rates and
taxes:
R115 261.33
14.5 Full balance
outstanding: R1 697 905.78
15.
The applicant is relying on a sworn
valuation by a registered appraiser, one Mr. Du Toit. The respondents
take issue with the fact
to no confirmatory affidavit by Mr. Du Toit
is attached to the founding affidavit. Same is attached to the
replying affidavit.
This court has difficulty in understanding how
the absence of such confirmatory affidavit to the founding affidavit
would render
the application defective or would prejudice the
respondents in any way. The sworn valuation formed part of the
founding affidavit
served on the respondents and the respondents, if
they so wished, could have countered same by presenting their own
valuations.
In line with
Mokebe
they actually had a duty to present such evidence to this court if
they were not in agreement with the evidence presented by the
applicant regarding the value of the property.
16.
It is the case of the respondents that the
property has a value of R6 082 000.00. In this instance
reliance is placed
on the municipal valuation of the Immovable
Property and no independent valuation is presented by the
respondents. The respondents
further stated that the current
liability in terms of the rates and taxes is the amount of
R143 627.49.
17.
The applicant proposes a reserve price in
the amount of R3 525 000.00. It is the respondents’
case that the setting
of such a reserve price would be prejudicial as
the property has more value.
18.
The first bond over the Immovable Property
was registered in 1992. Thereafter four more bonds were registered
over the Immovable
Property. Improvements to, and investments in a
primary residence are one of the factors that need to be considered
in the setting
of a reserve price. By logical conclusion this court
accepts that there were such improvements to, and investments in the
Immovable
Property. Under the circumstances a reserve price in the
amount of R4 750 000.00 will be set.
19.
The applicant has proved its case on a
balance of probabilities and as such the order prayed for will be
granted. Based on the equity
in the Immovable Property and the fact
that the first mortgage bond was registered in 1992, this court will
however grant the respondents
an indulgence to suspend the execution
of the order in terms of Claim A. This is done in the hope that
the respondents will
realise the seriousness of the situation and
will make a concerted effort to settle the arrears and save their
primary residence.
20.
With regard to the attorney and own client
costs prayed for in terms of Claim B no such provision could be found
in the overdraft
agreement.
ORDER:
In
the premises the following order is made an order of court:
Claim
A: Against the first and second respondents, jointly and severally,
the one paying the other to be absolved, for:
1.
Payment of the sum of R1 697 905.78 together with interest
thereon
at the rate of 5.75% per annum, calculated daily and
compounded monthly in arrears from 12 May 2020 to date of payment,
together
with monthly insurance premiums of R2 847.74;
2.
Declaring the respondents’ immovable property:
Remaining
Extent of Erf [....] Hurlingham Township, Registration Division I.R,
the Province of Gauteng, measuring 2568 (two thousand
five hundred
and sixty-eight) square metres, held by Deed of Transfer No. T[....]
(“the Immovable Property”) executable;
3.
Authorising the Registrar of this court to issue a Warrant of
Execution against
the Immovable Property;
4.
A reserve price in the amount of R4 750 000.00 is set;
5.
Costs of the application on the attorney and own client scale.
6.
The execution of this order under claim A is suspended for a period
of 6 (six)
months from date of service of this order.
Claim
B as against the first respondent, for:
7.
Payment of the sum of R215 492.33 together with interest thereon
at the
rate of 7.75% per annum, calculated daily and compounded
monthly in arrears from 25 April 2020 to date of final payment;
8.
Costs of the application.
J
MINNAAR
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
DIVISION, JOHANNESBURG
This
judgment was handed electronically by uploading same on CaseLines and
by circulation to the parties’ legal representatives
by e-mail.
The date and time for hand-down is deemed to be 10h00 on 23 September
2021.
Appearances:
Applicant’s
Counsel:
M De Oliveira
Applicant’s
Attorney:
Jason Michael Smith Incorporated Attorneys
Respondent’s
Counsel: J Moorcroft
Respondent’s
Attorney: Ncube Inc Attorneys
Date
of hearing: 18 August 2021
Date
of judgment: 23 September 2021
[1]
2018
(6) SA 492
(GJ).