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[2020] ZALMPPHC 43
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Land and Agricultural Development Bank of South Africa v Engelbrecht N.O and Others (2973/2020) [2020] ZALMPPHC 43 (30 June 2020)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(LIMPOPODIVISION,
POLOKWANE)
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO OTHER JUDGES: YES/
NO
(3)
REVISED
CASE
NO: 2973/2020
In
the matter between:
THE
LAND AND AGRICULTURAL DEVELOPMENT
APPLICANT
BANK
OF SOUTH AFRICA
AND
WILLEM
ADRIAAN ALBERTUS ENGELBRECHT
N.O
FIRST RESPONDENT
ANSIE
ENGELBRECHT
N.O
SECOND RESPONDENT
[In
their capacities as trustees of the Anlem Trust]
[IT
12327/97]
REASONS
FOR JUDGMENT
MAKGOBA
JP
[1]
On
the 24 June 2020 and upon hearing Counsel for the parties I granted
the following order and indicated that my reasons for the
order would
follow in due course:
1.1.
The Applicant is authorised to harvest
and take possession of the cotton crop cultivated on the farm owned
by the Anlem Trust, being
the farm Tussenkomst, Thabazimbi, Limpopo
Province, which is encumbered in favour of the Applicant
by way of special
covering bond number 8204/2018.
1.2.
The Respondents and those employed or
contracted by them, are interdicted from interfering in whatever
manner with the Applicant's
rights to harvest and procure the
proceeds of the cotton harvest.
1.3.
The Applicant is authorised to sell the
cotton harvest in its sole discretion and to apply the proceeds
generated by such sale(s),
after payment of the costs associated with
harvesting and removing the crop, against the debts owed to the
Applicant by the Anlem
Trust.
1.4.
The Applicant is hereby authorised to
approach this Court on the same papers, duly supplemented, should the
Respondents, or any
of their employees or representatives, interfere
in any way with the execution of this order or, more specifically,
with the harvesting
and removal of the cotton harvest.
1.5.
The costs of this application shall be
paid by the Anlem Trust on a scale as between attorney and client.
[2]
What
follows are my reasons for the order.
[3]
The
Applicant, in its capacity as cessionary of certain rights
contractually assigned to its predecessor, Unigro Financial Services
("Unigro"), applied for an order authorizing it to harvest
and sell cotton crop established by the Respondents ("the
Anlem
Trust") on the farm Tussenkomst, Thabazimbi.
[4]
The
Respondents opposed the application and raised the following as their
defences:
4.1.
Applicant's
locus standi;
4.2.
Denial of the indebtedness;
4.3.
Reckless credit;
4.4.
Lis alibi pendens;
4.5.
Urgency.
[5]
This
application initially served before the Urgent Court on 9 June 2020
(MG Phatudi J) when it was struck from the roll with costs
on account
of lack of urgency. When the matter came before me on 24 June 2020
the issue of urgency had become moot and the matter
was dealt with as
on the ordinary opposed motion roll. I shall accordingly not deal
with the issue of urgency herein.
Applicant's
Locus Standi
[6]
The
Anlem Trust (Respondents) disputes the Applicant's
locus
standi
on the ground that it
contracted with Unigro, and not with the Applicant when credit was
advanced to it.
The
issue of
locus standi
will accordingly be dealt with together
with the question whether the Anlem Trust is indebted to the
Applicant, that is, paragraphs
4.1 and 4.2 above are to be dealt
together. In its papers the Applicant states that the Anlem Trust is
indebted to it in the sum
of R 41 627 028.42 as at the 28
th
February 2019 and this amount has increased to R 48 390 262.41 as at
the 6
th
May 2020.
[7]
In
support of its
locus standi
the
Applicant's witness testified, in the founding affidavit, that the
Applicant concluded a host of agreements in terms of which
it
acquired all existing and future credit agreements concluded by inter
alia Unigro, and took cession of Unigro's rights in and
to such
agreements.
In answer to this evidence the
Anlem Trust presented no countervailing evidence, but rather availed
itself of a bare denial of the
Applicant's
locus standi.
It
is trite that a bald or bare denial will not constitute a defence in
the circumstances such as the present where the party who
purports to
raise the dispute has in its affidavit not seriously and
unambiguously addressed the fact
said to be disputed - Wightman
t/a JW Construction v Headfour (Pty) Ltd
2008 (3) SA 271
(SCA) at 375
para [13]
See
also
Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949
(3) SA 1155
(T) at 1162I-1163A
[8]
The Respondents (Anlem Trust) is a
complete outsider to the business dealings between the Applicant and
Unigro. Bluntly placing
the Applicant's
locus
standi
in dispute does not create a
dispute of fact. I accordingly come to a conclusion that there is no
dispute concerning the Applicant's
locus
standi
as the Anlem Trust has failed
to present any countervailing evidence to dispute Unigro's cession of
its claims against the Anlem
Trust to the Applicant.
I make a finding that there exists
a valid cession of rights between the Applicant and Unigro. As the
cessionary, the Applicant
has a valid claim against the Anlem Trust
and thus the necessary
locus standi
to institute the present
proceedings has been established.
[9]
Cession,
in order to be effective, does not require the prior knowledge,
consent, concurrence or co-operation of a debtor (in
casu
the Anlem Trust). Cession is
complete when the cedent (Unigro) and the cessionary (Applicant0
reach finality on the act of cession
-
National
Sorghum Breweries Ltd v Corpcapital Bank Ltd
2006 (6) SA 208
(SCA) AT
2019
and
LTA Engineering Co Ltd v CCAT
Investments (Pty) Ltd
1974 (1) SA 747
(A) at 762
Reckless Credit
[10]
The Anlem Trust contends that the
agreement of loan between it and Unigro is invalid on account of it
being a reckless credit and
as such the rights that would purportedly
have been ceded to the Applicant cannot be enforced.
The defence raised by the Anlem
Trust is that the credit agreement(s) entered into between Unigro and
the Anlem Trust constitute
reckless credit as defined in sections 79
and 80 of the National Credit Act 34 of 2005 ("NCA"). It is
contended that
in as much as Unigro would not have been in a position
to enforce the agreement, or if the agreements are held to be
unlawful,
the same would apply to the Applicant even if it was a
lawful cession.
[11]
It should be noted that the Anlem Trust
raises this defence several years after having received and used the
credit advanced by
Unigro. Anlem Trust never raised this defence
against Unigro before the cession of Unigro's rights to the
Applicant. It is only
now when Applicant enforces its rights that the
Anlem Trust comes up with the defence that the supply of credit was
reckless and
that it is as a result over-indebted.
In my view, the credibility of the
Anlem Trust is questionable in this regard.
[12]
The onus is on the Anlem Trust to prove
that at the time of the conclusion of the credit agreement, the
credit provider, having
conducted the required assessment, entered
into the credit agreement with the consumer despite the fact that on
the preponderance
of information available, the amount approved when
entering into the credit agreement would make the consumer over-
indebted.
In
casu
the Anlem Trust has
not pleaded and proved over-indebtednessand has only sought to rely
on sections 79 and 80 of the NCA. In the
answering affidavit the
Anlem Trust has not succinctly set out the basis or facts upon which
it relies on to show that it was over-indebted
and that the credit
was reckless.
[13]
In
Standard
Bank of South Africa Ltd v Panayiotts
2009 (3) SA 363
(W) at para [8]
it was held that:
"[55]
A
party (the consumer) who raises
a
defence of over-indebtedness
must plead and prove the defence, which includes proving that he is
over-indebted as envisaged in section
79 of the NGA" .
[14]
The Court in
Panayiotts
(supra) made the following
instructive remarks and findings in paragraphs [52] [56] and [79]:
"[52] It
is so that the NGA is for the benefit of every consumer who can prove
that he is over-indebted
as
contemplated in
Section
79
of
the NGA. More importantly, however, is whether the consumer wanting
to take advantage of the NGA provisions has made proper disclosure
to
enable a court to exercise its discretion properly.
[56]
In casu the defendant’s allegations regarding his
over-indebtedness are inherently and
seriously unconvincing. I say
this for the following reasons: The defendant has set out
insufficient facts to show that he is over-indebted
as
envisaged in
section
79.
In
addition such facts are
so
vague and bald
that they do not amount to a bona fide defence.
[79]
Considerations of fairness require that the circumstances of both the
defendant and the plaintiff
be given equal considerations. Where it
is clear that the credit provider is likely to be greatly prejudiced
if the protection
measures provided by the provisions of the NGA are
implemented courts should be reluctant to assist the defendant."
[15]
It is not sufficient for a consumer to
simply allege to be over-indebted in order to scape liability from a
claim by his creditor,
but such a consumer (like the Anlem Trust in
casu)
must
present factual evidence to illustrate its over indebtedness.
I make a finding that the Anlem
Trust has failed to discharge the onus in this regard. The defence of
reckless credit and over-indebtedness
are devoid of merit.
[16]
In
SA Taxi
Securitisation (Pty) Ltd v Mbatha 2011 (1) SA 310 (GSJ) at paras [26]
and [32]
it
was said that:
"[26]
Since the enactment of the NGA, there seems to be
a
tendency in these
courts for defendants to make bland allegations that they are "over
indebted" or that there has
been "reckless credit".
These allegations, like any other allegations made in
a
defendant's
affidavit opposing summary judgment, should not be "inherently
and seriously unconvincing", should contain
a
reasonable amount
of verificatory detail, and should not be "needlessly bald,
vague or sketchy". A bald allegation that
there was "reckless
credit" or there is "over indebtedness" will not
suffice
[32]
The purpose of the NGA is to provide
a
more efficient
and equitable credit system by balancing the rights of credit
providers and consumers. The intention of the Legislature
was not to
shift the balance of power so much that all power in the credit
relationship would amass into the hands of the consumer."
Lis
Alibi Pendens
[17]
The Anlem Trust contends that the
Applicant issued motion proceeding under case number 2924/2019 in
which the Applicant prayed for
an order that it be authorized to take
possession of all movable assets of the Anlem Trust in order to
perfect a notarial bond
and to hold the movable assets in its
possession as if it has a lien over it until such times all amounts
secured by the notarial
bond have been paid. The applicants further
sought an order that it be authorized to, in accordance with the
provisions of the
notarial bond, sell the crops, livestock and
movable assets attached in terms of the order.
[18]
It is clear from the Anlem Trust papers
that the pending litigation under case number 2924/2019 does not
contemplate any right afforded
to the Applicant to harvest the cotton
crop. It only speaks of selling the crops. The present proceedings
are aimed at interdicting
the Anlem Trust from harvesting the cotton
crop and authorizing the Applicant to harvest, take possession and
sell the cotton crop.
It is common cause between the parties that the
cotton crop would be ready for harvesting within few weeks. According
to the Anlem
Trust the harvesting would be due by the 29 June 2020.
In my view the remedy available to the Applicants to protect its
right is
by the Court order as prayed for and granted in the present
proceedings on the 24 June 2020. The pending proceedings under case
number 2924/2019 would not serve the purpose.
[19]
A party wishing to raise a
lis
pendens
bears the onus of alleging
and proving:
(a.) Pending
Litigation;
(b.)
Between the same parties or their privies;
(c.)
Based on the same cause of action; and
(d.)
In respect of the same subject matter as defined in the pleadings.
Once
a party has established all the above, a presumption arises that the
second proceedings are
prima facie
vexatious. The party who
instituted the second proceedings then needs to satisfy the Court
that the balance of convenience and equity
require the case to
proceed. In my view, to uphold the
lis pendens
defence in the
present case would effectively result in a situation where all the
Applicant's rights to and concerning the cotton
crop become moot. It
would therefore be just and equitable to dispose of the current
application.
[20]
In
Keyter
NO v Van Der Meulen and Another NNO
2014 (5) SA 215
(ECG)
Plasket
J (as he then was) said the following:
"[11]
The
Court is vested with
a
discretion as to whether to stay
proceedings or to hear the matter despite the earlier pending
proceedings. In Loader v Dursot Bros
(Pty) Ltd Roper J dealt with
this aspect when he said:
"It is clear on the
authorities that
a
plea of lis
pendens does not have the effect of an absolute bar to the
proceedings in which the defence is raised. The Court intervenes
to
stay one or the other of the proceedings, because it is prima facie
vexatious to bring two actions in respect of the same subject-matter.
The Court has discretion which it will exercise in
a
proper case, but
it is not bound to exercise it in every case in which
a
lis alibi pendens
is proved to exist.'.'
Conclusion
[21]
I come to the conclusion that the Anlem
Trust has not established any of the defences it raised in this
matter. In my view the defences
raised are in the form off technical
and obstructive objections raised with the view of frustrating the
Applicants rights. The
Applicant is entitled to the orders sought in
the notice of motion and it is against this backdrop that I granted
the order on
the 24 June 2020.
EM MAKGOBA
JUDGE PRESIDENT OF THE
HIGH COURT, LIMPOPO
DIVISION, POLOKWANE
APPEARANCES
Heard
on
: 24 June 2020
Order
Pronounced on
: 24 June 2020
Reasons
Furnished on
: 30 June 2020
For
the Applicants
: Adv. J Vorster
Instructed
by
: Strydom Bredenkamp Attorneys
c/o De Bruin Attorneys
For
the Respondents
: Adv.
J H Mollentze
Instructed
by
: Olivier & Malan Attorneys
c/o Kampherbeek & Pogrund
Attorneys