About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2019
>>
[2019] ZAFSHC 82
|
|
The Land and Agricultural Development Bank of South Africa v Jonker and Others (5870/2018, 109/2019) [2019] ZAFSHC 82 (20 June 2019)
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,
FREE STATE
DIVISION, BLOEMFONTEIN
Case
No.: 5870/2018
In
the matter between:
THE
LAND AND AGRICULTURAL
DEVELOPMENT
BANK OF SOUTH AFRICA
Applicant
and
JACO
JONKER
1st
Respondent
(ID
NO: [….])
ESPERANZA
JONKER
2
nd
Respondent
(ID
NO: [….])
AND
Case No.: 109/2019
In
the matter between:
THE
LAND AND AGRICULTURAL
DEVELOPMENT
BANK OF SOUTH AFRICA
Applicant
and
THE
COMPANIES AND INTELLECTUAL
1st
Respondent
PROPERTY
COMMISSION
THE
MINISTER OF AGRICULTURE,
2
nd
Respondent
FORESTRY
AND FISHERIES
THE
MINISTER OF PUBLIC WORKS
3
rd
Respondent
THE
MINISTER OF FINANCE
4
th
Respondent
JACO
JONKER
5
th
Respondent
(in
his capacity as sole member of the Jaco Jonker
Boerdery
CC)
(Registration
No. 2001/048317/23)
JACO
JONKER BOERDERY CC
6
th
Respondent
(Registration
No. 2001/048317/23 in deregistration)
JUDGMENT:
MOENG,
AJ
HEARD
ON:
30 MAY 2019
DELIVERED
ON:
20 JUNE 2019
[1]
I deem it prudent for practical considerations to deal with both
applications in this judgment as the
issues and defences raised in
both applications are in essence the same.
[2]
In the application under case number 5870/2018 (“the main
application”) the applicant claims
payment in the amount of R10
143 592.84 from the first and second respondents as principal debtors
and an order declaring their
immovable property, known as Portion 1
of the Farm Middenspruit Zuid 2377, District Kroonstad, Free State
Province measuring 476,
1693 hectares, held under Deed of Title
T12794/2010, specially executable in favour of the applicant.
[3]
In case 109/2019(“the revival application”) the applicant
applies, in Part A of its
notice of motion, for an order
declaring the dissolution of the sixth respondent (“the close
corporation”) void and
for an order restoring the close
corporation’s name to the Register of Companies. It prays in
Part B thereof, for judgment
to be entered against the close
corporation following its reinstatement, in its capacity as surety
and co-principal debtor, for
payment in the amount of R 10 143 592.84
and for an order in terms of which its immovable property, known as
Goedverwachting 2335
Kroonstad District, Free State Province
measuring 256, 9596 hectares, held under Deed of Title T11314/2005,
is declared specially
executable in favour of the applicant.
[4]
The applicant in both applications is the Land and Agricultural
Development Bank of South Africa, a
statutory body established in
terms of the
Land and Agricultural Development Bank Act, 15 of 2002
and a registered credit provider in terms of the
National Credit Act
32 of 2005
(“the NCA”). The applicant instituted these
proceedings as cessionary in terms of a written sale agreement
pertaining
to the sale, cession and delegation of Suidwes Landbou
(Pty) Ltd’s (“Suidwes”) right, title and interest
in and
to its existing and future debtors’ book.
[5]
The first respondent in the main application is a major male farmer
and businessman, married in community
of property to the second
respondent, with chosen
domicilium citandi et executandi
at
Farm Goedverwachting Kroonstad District, Free State Province. The
second respond is cited by virtue of her marriage in community
of
property to the first respondent.
[6]
The first to fourth respondents in the revival application are: the
Companies and Intellectual Property
Commission; the Minister of
Agriculture, Forestry, and Fisheries;
the
Minister of Public Works; and the Minister of Finance. The applicant
does not seek any relief against the second to fourth respondents
and
they were merely cited insofar as they may hold a vested interest in
the restoration of the close corporation’s name
to the Register
of Companies. The first to fourth respondents did likewise not
participate in these proceedings. The fifth respondent
is Jaco Jonker
(the first respondent in the main application) in his capacity as
sole member of the sixth respondent, the Jaco
Jonker Boerdery CC with
registration number 2001/048317/23 [- in deregistration].
[7]
It is not in dispute that on or about December 2013 and January 2014,
the first respondent applied for
and was granted a long term loan in
the amount of R7 500 000.00 by the applicant’s predecessor,
Suidwes, repayable over a
period of 15 years and subject to the terms
and conditions as set out in the agreement. It is likewise common
cause that the loan
was granted subject to the condition that a first
ranking mortgage bond be registered in favour of Suidwes for an
amount of R10
000 000.00 and that the close corporation bind
itself as surety and co-principal debtor with the first respondent.
[8]
The first respondent and the close corporation duly provided Suidwes
with security in the form of covering
mortgage bonds over Portion 1
of the Farm Middenspruit Zuid 2377, District Kroonstad, Free State
Province measuring 476, 1693 hectares,
held under Deed of Title
T12794/2010 for an amount of R 6 500 000.00 and over the
close corporation’s immovable
property known as Goedverwachting
2335 Kroonstad District, Free State Province measuring 256, 9596
hectares, held under Deed of
Title T11314/2005 for R3 500 000.00.
[9]
On 26 August 2013, the applicant and Suidwes entered into a written
sale agreement pertaining to the
sale, cession and delegation of
Suidwes’s right, title and interest in and to its existing and
future debtors’ book.
The applicant and Suidwes, in addition,
entered into a service level agreement in terms of which Suidwes was
appointed to manage,
service and administer the sale book debts sold
to the applicant in terms of the sale agreement.
[10]
Applicant alleges that on or about October 2014, the first respondent
applied for the restructuring of the long
term loan agreement. As a
result same was restructured for an amount of R8 013 403.00 repayable
over 14 years. This was subject
to the condition that no further
extensions would be granted, that the arrear portion of the long term
loan agreement be transferred
to a medium term loan repayable on or
before 10 January 2015 and that a general notarial bond be registered
over the respondents’
movable property. I should pause to
mention that the respondents contended that this latter agreement did
not amount to a restructuring
of the long term loan agreement but was
a novation of such agreement. I will deal with this aspect later.
[11] It is
also not in dispute that on or about July 2017, the first respondent
approached Suidwes with a request for
an extension of his payment
obligations in terms of the long term loan agreement. A duly
completed written request for extension
of payment and acknowledgment
of debt was subsequently submitted to Suidwes by the first
respondent. The applicant contends that
this amounted to an
unequivocal acknowledgment of the first respondent’s
indebtedness to Suidwes. The said request was not
granted and the
first respondent subsequently failed to make payment on or before 31
August 2017 as he was contractually required
to do.
[12] The
respondents in turn admit that the first respondent approached
Suidwes with the request for extension of payment
but contends that
he did not verify the contents of the written request and they
dispute the amount contained therein. The first
respondent admits to
having failed to make payment but denies that he was legally obliged
to do so.
[13]
Applicant alleges that on or about 7 May 2018 and on 16 and 17
October 2018, notices in terms of
section 129
of the NCA were
dispatched and served on the respondents informing them of their
default and the arrear amount. The respondents,
despite such
demand, failed to make payment. As a result a certificate of balance,
reflecting the amount claimed, was issued on
31 October 2018.
[14] The
respondents likewise denied that the purported
section 129
notices
represented demands as contemplated by the section and denied that
the notices were sent to the second respondent. In addition
they deny
having any knowledge of the calculation of the outstanding balances
or arrears as reflected in the purported notices
and certificate of
balance. Save for the denials raised above, the respondents in turn
counterclaimed and raised a number of defences
which I will deal with
later.
[15] No
serious challenge was directed at the applicant’s prayers that
the immovable properties belonging to the
first and second respondent
as well as the close corporation be declared specially executable in
favour of the applicant.
[16] It is
not in dispute, in relation to the revival application, that the
close corporation was deregistered subsequent
to the granting of the
loan and the respondents’ alleged failure to honour their
obligations. It is trite that whilst so
dissolved, the applicant is
not entitled to enforce any of its remedies against the close
corporation. The applicant logically
had no option but to seek an
order declaring the dissolution of the close corporation void in
terms of
section 83(4)
of the
Companies Act 71 of 2008
in order for
it to be restored to the Register of Companies.
[17] On 24
January 2019 the following rule
nis
i was issued in respect of
the relief sought in Part A of the revival application
:
1.
A rule
nisi
is issued, returnable on
14 March 2019
calling upon all interested persons to show cause why an order should
not be made in the following terms:
1.1
Declaring the dissolution of Jaco Jonker Boerdery CC,
registration number 2001/048317/23
void in terms of
section 83(4)
of the
Companies Act 71 of 2008
;
1.2
Directing the first respondent to restore Jaco Jonker Boerdery CC’s
name to the Registrar
of Companies;
1.3
The assets of Jaco Jonker Boerdery CC are declared to be no longer
bona vacantia
and are re-vested in the close corporation;
1.4
The liabilities of Jaco Jonker Boerdery CC, immediately prior to its
dissolution are declared
to re-vest in the corporation;
2.
This rule is to be served on:
2.1 The
Companies and Intellectual Property Commission;-
2.2
The Minister of Agriculture, Forestry and Fisheries;-
2.3
The Minister of Public Works;-
2.4
The Minister of the Department of Finance;-
2.5
The South Africa Revenue Services;
2.6
Any interested person who has been identified as such
3.
The rule is to be published once in:
3.1
The Government Gazette in English and Afrikaans;
3.2
An English daily newspaper, circulating in the Kroonstad area;
3.3
An Afrikaans daily newspapers, circulating in the Kroonstad area;
4.
Costs are reserved for adjudication during the hearing of Part B of
the relief
sought.
5.
Leave is granted to the applicant to approach the Honourable Court on
the same
papers, duly amplified, for the relief set out in Part B
hereof.
[18] Proper
service and publication of the abovementioned order took place and
none of the respondents in the revival
application opposed its
confirmation. I do not deem it necessary to deal with the procedural
aspects and principles applicable
to such revival applications as
these were succinctly dealt with by Daffue J in
Land and
Agricultural Development Bank of SA v Jandrea Boerdery CC and Others
(3127/2018)
[2018] ZAFSHC 188
(8 November 2018) at para 15 to 19.
Nothing therefore precludes the confirmation of the rule
nisi
.
I am satisfied that a proper case has been made out for the
restoration of the close corporation’s name to the Register
of
Companies and the rule
nisi
is therefore confirmed.
[19]
Following confirmation of the rule
nisi
, the only question
which remains is whether judgment should be granted against the first
and second respondents in their capacity
as principal debtors and
against the close corporation in its capacity as surety and
co-principal debtor together with the fifth
respondent.
[20]
It is trite that in the event of conflict on the papers, a court
should accept the version set up by the respondents
unless their
allegations do not raise a real, genuine or bona fide dispute of fact
or are so far-fetched or clearly untenable that
the court is
justified in rejecting them merely on the papers. A real, genuine and
bona fide dispute of fact can exist only where
the court is satisfied
that the party that purports to raise the dispute has in his
affidavit seriously and unambiguously
addressed the fact said to be
disputed. See
Wightman
t/a JW Construction v Headfour (Pty) Ltd and Another
[2008] ZASCA 6
;
2008
(3) SA 371
(SCA) at 375D to G.
[21] The
respondents elected to couch all the defenses raised in both
applications in the form of a counter application.
Any reference to
such defenses in this judgment will therefore also relate to the
counter application. I will now separately deal
with the defenses and
issues raised in the counter application.
1.
ASSIGNMENT
AND NOVATION
[22] The
respondents allege that, based on the sale and cession agreement,
Suidwes was precluded from concluding the
agreement dated October
2014. Mr. Du Plessis, representing the respondents, argued that the
first loan agreement entered into between
Suidwes and the first
respondent in December 2013/ January 2014 was assigned to the
applicant by Suidwes in terms of the sale and
service level
agreement. He contends that the first agreement was purportedly
substituted by a second agreement concluded by Suidwes
and the first
respondent in October/ November 2014, after Suidwes had ceded all its
rights to the applicant in terms of the sale
and service level
agreement. This, he argues, was impermissible in law as the cedent
had been divested of all the rights arising
from the first agreement.
He further argued that the second agreement was meant to constitute a
contract of novation and not a
restructuring as contended by the
applicant. The second agreement, upon which the applicant based its
action, so the argument went,
is non-existent in law and as a result
the applicant does not have
locus standi
.
[23] I am
inclined to agree with Mr. Terblanche SC, counsel for the applicant,
that there is no merit in this argument.
The “second
agreement”, as referred to by the respondents, is in my view
not a novation agreement but clearly a restructuring
of the long term
loan agreement. It is clear from the papers that having defaulted and
fallen into arrears with the instalment
which was due in September
2014, the first respondent approached Suidwes with the latter
application for the restructuring of his
debt.
[24] It was
for the respondents to allege and prove the purported novation.
Except for an unsubstantiated allegation
in the ancillary affidavit
that the second agreement amounted to a novation, no factual basis
was provided for this allegation.
The respondents failed to allege
and prove that the supposed novation agreement extinguished their
existing obligation towards
the applicant and simultaneously replaced
it with a new obligation.
[25] Against
their failure to allege and prove a novation agreement, the November
2014 agreement clearly had the ingredients
of a restructuring
agreement. The conditions for granting the altered credit agreement
were, according to point 2 of the pre-agreement
statement, that “
geen
verdere
uitstel of verhogings nie”
(my
emphasis) would be allowed and point 3
“
indien
ons nie betaling ontvang 30/01/2015 nie, gaan ons voort met
regsaksie”
.
This in my view clearly signalled the intention of the parties having
been to alter and not to extinguish the long term agreement
entered
into in January 2014. Clause 25.4.2 of the long term loan agreement
also sanctioned such latter agreement and provides
that
“
indien
enige bepaling, koers, bedrag of betaling by wyse van skriftelike
ooreenkoms wat deur beide partye onderteken word, gewysig
word, word
dit nie beskou as ‘n novasie nie …”
[26] Such a
restructuring was similarly within the scope of
section 95
of the NCA
which provides that:
“
The
provision
of credit as a result of a change to an existing credit agreement, or
a deferral or waiver of an amount under an existing
credit agreement,
is not to be treated as creating a new credit agreement for the
purposes of this Act if the change, deferral
or waiver is made in
accordance with this Act or the agreement.”
[27] It is
disquieting that the respondents, in their answering affidavit dated
5 December 2018, admitted that the long
term loan agreement was
restructured in October 2014 and did not take issue with the
purported novation. It was only in the “ancillary
affidavit”
dated 31 January 2019 that they changed ground and raised this issue.
They indicate that the reason for this belated
defence is that their
attorney of record only came across this defence in the course of his
preparation in another case where applicant
was also involved and
where similar merits were involved. It came to light during the
deliberations that the matter respondents
referred to is
Land and
Agricultural Development Bank of SA v Jandrea Boerdery CC and Others
supra
. It is common cause that a similar defence was dismissed
and a resultant application for leave to appeal was refused. A
petition
to the SCA was likewise unsuccessful.
[28] The
respondents’ argument that the applicant’s predecessor
was, based on the sale and cession agreement,
precluded from
concluding the restructured agreement with the first respondent is
likewise unsustainable. Clause 6.5 of the Service
Level Agreement
provides that:
“
Notwithstanding
anything to the contrary contained in this Agreement, Suidwes Agri
shall not be entitled to:-
6.5.1 cancel,
vary or alter the terms and conditions of any of the Loan Documents
or the documents pertaining to the
Related Security without the prior
written consent of the Land Bank except to the extent necessary
pursuant to:
6.5.1.1
…
6.5.1.2
debt collection procedures, including the granting of temporary
extensions for payment and/or rescheduling of payments by a Debtor,
provided that such rescheduling does not amend the procedures
referred to in the Approved Credit Policies”
[28] I am
satisfied that based on the last mentioned clause, Suidwes was not
precluded from restructuring or rescheduling
the first respondent’s
debt. Clause 6.5.1.2 in my view sanctioned the restructured agreement
entered into between the first
respondent and Suidwes. This defence
therefore falls to be rejected.
2.
NATIONAL
CREDIT ACT
·
Section
110 and 111 of the NCA
[29]
The respondents allege that the applicant failed to provide them with
statements of the arrears and balance owing
as envisaged by
section
110
of the NCA. In the same breath they contend that they have
disputed the entries in the accounts that were submitted to them and
the applicant is consequently prohibited by
section 111
of the NCA
from continuing with enforcement proceedings. Mr. Du Plessis argued
that the applicant ignored the provisions of section
110 and likewise
ignored the disputes communicated in respect of certain entries.
[30]
The papers reflect that on 26 October 2018, pursuant to receiving the
section 129
notices, the respondents’ legal representative
directed a letter to the applicant’s attorney of record in
which he
requested a statement as contemplated in
section 110
, from
the date of conclusion of the long term loan agreement to the date of
the letter. The respondents’ legal representative
similarly, in
the same letter, disputed “debit entries” that were
contained in the
section 129
notice, purportedly in terms of
section
111.
This dispute was, to say the least, premature as no statements
had been provided at that stage. The respondents were in addition
not
at liberty to dispute the arrears and outstanding balance as
contained in the
section 129
notice since they were not entries as
envisaged by
section 111.
This in my view clearly reflected their
lack of bona fides in raising each and every conceivable defence in
the NCA.
[31]
In a letter dated 16 November 2018, a number of statements were
provided to the respondents. Dissatisfied with
the statements, the
respondents’ legal representative addressed a second letter to
the applicant to provide a “proper
account” in terms of
section 110.
No response was forthcoming from the applicant and the
main application was issued on 21 November 2018. The battle lines
were therefore
clearly drawn and as will appear below, the
respondents did not take any steps as envisaged by the NCA to resolve
this purported
failure to provide statements.
[32] Credit
providers are obliged by the provisions of
section 110
to furnish
consumers on request, without charge, a statement of all or any of:
a)
the
current balance of the consumer’s account;-
b)
any
amounts credited or debited during a period specified in the
request;-
c)
any
amounts currently overdue and when each such amount became due and;-
d)
any
amount currently payable and the date it became due.
If a statement is not
offered or delivered within the time required, the Tribunal may in
terms of
section 114
, on application by the consumer order the credit
provider to provide the statement or it may determine the amounts in
relation
to which the statement was sought.
[33]
Statements were admittedly provided by the applicant but these were
not to the satisfaction of the respondents.
The respondents’
submission that the applicant failed to provide such statements is
therefore factually incorrect. Subsequent
to the statements that were
provided on 16 November 2018, further statements were attached to the
application reflecting the capital
amount, the current balance and
the accrued interests. In addition to these statements, the
section
129
notices similarly clearly reflected the arrear amount, when such
amount became due and the total amount due and payable as at 31
August 2018. This in my view placed the respondents in a position to
determine what is envisaged by
section 110.
[34]
As I see it, the Act does not provide any remedy to a consumer who is
dissatisfied with the form and content of
statements that are
provided by a credit provider.
Section 114
is only at the disposal of
a consumer who was not timeously provided with a statement
.
Even
if one accepts that no statements were provided, such failure does
not provide any defense against the applicant’s claim
for
payment. The consumer may under such circumstances at best attempt to
resolve the dispute with the credit provider in terms
of
section
129(1)(a)
or may alternatively approach the Tribunal in terms of
section 114
or
section 134
for appropriate relief. A decision to
approach the Tribunal would however not affect or suspend enforcement
proceedings.
[35] One
cannot lose sight of the fact that the respondents do not dispute
their indebtedness to the applicant. The
first respondent had, as a
matter of fact, approached Suidwes with a written request for
extension of payment and had acknowledged
his indebtedness to the
applicant. He similarly acknowledged his indebtedness in accordance
with the monthly statement dated 8
May 2017 and acknowledged the
arrear installment as well as the outstanding amount.
[36]
It would have been prudent for the respondents, under such
circumstances,
to
calculate the relevant overdue amounts themselves to enable payment
to be made in accordance with
section 129(3).
The
respondents’ reliance on applicant’s failure to provide
them with statements is in my view nothing but an attempt
to delay
the inevitable and this defense is bound to fail.
[37] A
further issue was raised with regard to the debit or credit entries
in the credit agreement. The respondents
sought to dispute the
totality of the entries contained in the supplied statements. This
dispute was clearly contrary to the provisions
of
section 111(1)
which affords a consumer the right to dispute all or part of
any
particular
credit or debit entered under a credit agreement. The
respondents were not at liberty to lodge a blanket dispute over the
totality
of the entries. They had to be specific in their dispute and
should have specified the particular entries which are disputed and
the grounds for such dispute.
[38]
This defence is equally still-born on the ground that, for
enforcement proceedings to be suspended, the creditor
should not have
commenced with measures to recover the debt. Put conversely,
section
111(2)(b)
is only available to a consumer against whom
enforcement
proceedings have not yet begun.
Needless
to say, the proceedings to recover the monies owed to the applicant
were commenced on 16 and 17 October 2018 when the
section 129
notices
were served on the respondents and the purported
section 111
notice
was only issued thereafter on
26
October 2018. The respondents’ reliance on
sections 110
and
111
are likewise rejected.
·
Section
129
of the NCA
[39] The
respondents contend that the applicant failed to convey to them the
correct purported overdue amounts in the
section 129
notice and
failed to address such notice to the second respondent. They contend
that the arrear amount as reflected in the
section 129
notice dated 7
May 2018 is reflected as R2 727 008.00 and a few months later in a
resultant notice dated 16 October 2018, the arrear
amount is
reflected as R4 584 578.36. This they allege, when viewed in
conjunction with the figures reflected in the certificate
of balance,
is
“
fictitious
and abjectly (sic) false”
.
[40] It is
trite that it will not suffice for a credit provider merely to state
that the consumer is in default. The
particulars of the default and
the exact amount of the arrears should be reflected in the
section
129(1)(
a
) notice. The exact amount of arrears is of importance
as it would inform the consumer’s election as to whether or not
he
would be able to bring the arrears up to date as suggested in the
notice.
[41] It is
noteworthy that despite placing these figures in doubt, the
respondents do not indicate what the correct
figures are in their
view. Their approach clearly raises fictitious issues which are not
factually substantiated. This fictitious
concern is clarified by the
detailed statement of account attached to the founding affidavit and
marked as “RMN22”.
All that the respondents say about
this detailed statement is that they put each and every entry therein
in dispute. The respondents
clearly failed to
unambiguously
address the facts said to be disputed.
[42] It is
common cause that the first respondent was obliged to repay the long
term loan agreement in annual instalments
of approximately R1
200 000, 00 payable on or before 31
August of every year.
When the first
section 129
notice was issued on 7 May 2018, he was R2
727 008.00 in arrears with his repayments. A further instalment which
was due at the
end of 31 August 2018 remained unpaid and so was the
compounded accrued interest. Logic therefore dictates that the arrear
amount
would have substantially increased when the second
section 129
notice was issued in October 2018.
[43] I am
satisfied that the notices comply with the requirements as set out in
the section as they brought the default
to the consumer’s
notice and contained proposals regarding referral of the credit
agreement to a debt counsellor, alternative
dispute resolution agent,
consumer court, or ombud with jurisdiction. It also indicates that
the intent of the proposal is to enable
the parties to resolve any
dispute under the agreement or develop and agree on a plan to bring
the payments under the agreement
up to date.
[44] It is
not in dispute that it is the first respondent who entered into the
long term loan agreement with Suidwes.
He is therefore the consumer
as defined by the Act and the second respondent was merely cited by
virtue of their marriage in community
of property.
A
consumer, for our purpose, is defined in
section 1
of the Act as the
party to whom credit is granted under a credit facility or the
party to whom or at whose direction money
is advanced or credit
granted under any other credit agreement. The wife to whom such a
consumer is married in community of property,
is admittedly not
regarded as such. I am in agreement with what was said in
Motor
Finance Corporation v Herbert
(case 16098/2011 an unreported judgment in the Western Cape), that
courts should not impose notice obligations on credit providers
beyond those expressly required in terms of the Act.
[45]
Even if I am wrong in the above conclusion, it is not in dispute that
the second respondent was notified by registered
letter dated
7
May 2018 of the first respondent’s indebtedness to the
applicant. It is further common cause that on 16 October 2018, the
Sheriff personally served a
section 129
notice on the second
respondent. The said notice was admittedly addressed to the first
respondent as consumer but the details of
the second respondent were
reflected therein. Her husband reacted to this notice which clearly
reflected her details and approached
his attorney of record. Nowhere
in the answering affidavits did she allege that the notice did not
come to her attention. This
defence is in my view without merit and
as a result is rejected.
·
Reckless
Credit
[46] The
respondents alleged that Suidwes failed to conduct an assessment as
required by
section 81(2)
and knowing that the respondents would not
be able to service their liabilities proceeded to avail credit to
them. In addition,
Mr. Du Plessis submitted that the applicant never
averred that it complied with the provisions of
Part D
of Chapter 4
of the NCA and because of that, its application is fatally flawed. In
his view, the credit agreements constitute reckless
credit and are
consequently liable to be set aside.
[47] This
defence is without merit and the respondents’ likewise failed
to
seriously and unambiguously address the facts said to be disputed.
A
consumer who alleges the granting of reckless credit should set out
such defence in sufficient particularity. The respondents
elected to
make vague allegations of reckless credit and merely repeated the
factors referred to in the relevant section without
elaborating as to
how the credit provider’s violation of each of those factors
directly affected them. See
SA
Taxi Securitisation (Pty) Ltd v Mbatha
2011 (1) SA 310
(GSJ) and
Absa
Bank Ltd v Malherbe
2013 ZAFSHC 78
(16 May 2013) para 76 and 78.
[48]
Unlike the respondents’ unsubstantiated allegations of reckless
credit, the applicant detailed the credit
assessment its predecessor
conducted before credit was advanced to the first respondent. This
detailed procedure is captured in
the replying affidavit and is
supported by detailed credit evaluation documents. The credit
evaluation documents reflect that at
the time of the application for
credit, the respondents had assets amounting to R18 700, 000.00 and
liabilities in the amount of
R6 900, 000.00. The information provided
by the respondents’ further indicated that their commercial
farming activities would
result in a positive cash flow. This
information was verified by Suidwes and it compiled its own cash flow
analysis based on the
information provided by the respondents. This
defence is likewise rejected.
3.
INVALID
CLAUSES IN THE CREDIT AGREEMENT AND MORTGAGE BOND
[49] The
respondents allege that clauses’ 19.1 of the loan agreement and
15 of the mortgage agreement contain
unlawful provisions in that they
provide that in case of breach, the total outstanding amount will
become immediately due and payable
without notice and that the
applicant may take legal action without notice.
[50]
Section
90
prohibits the inclusion of unlawful provisions in credit
agreements. If an agreement contains an unlawful provision a court
must,
in terms of
section 90(4)
(a) or (b), sever that unlawful
provision from the agreement, or alter the provision to render it
lawful if it is reasonable to
do so having regard to the agreement as
a whole. Alternatively it may declare the entire agreement unlawful.
[51]
Sections
123
and
129
of the NCA deal with the notice periods that credit
providers must adhere to before terminating credit agreements and
that they
have to comply with before commencing enforcement
proceedings. A credit provider may therefore not override these
provisions
and
if it does, such provision must be dealt with in terms of
section 90.
[52] It is
common cause that despite the purported unlawful provisions in
clauses 19.1 and 15, the necessary notice
was given to the
respondents. Nothing therefore turns on this defence. I will
therefore sever these offending provisions from the
rest of the
contract and mortgage bond. I am satisfied that such
severance will not leave
the parties with a contract that is substantially different from the
one they intended.
See
Guide to
the
National Credit Act
>,
Service Issue 10 at para 9.3.4.2.
[53] The same
fate should similarly befall the sixth respondent’s argument
that the deed of suretyship provided
by it contravenes the National
Credit Regulations. Such offending provisions are likewise severed
from the deed of suretyship.
4.
EXECUTABILITY OF THE IMMOVABLE PROPERTIES
[54] There is
no reason why the properties should not be declared specially
executable. Respondents conceded that the
properties do not
constitute their primary residences and did not challenge the
applicant’s entitlement to such orders. This
issue was likewise
not challenged in the heads nor during deliberations. The
properties are utilised for commercial farming
purposes and the loan
was not obtained to purchase the properties.
[55] The loan
agreement, deed of suretyship and mortgage bond provide for costs on
an attorney and client scale in the
event of default and in case
legal proceedings are initiated. The applicant sought an order of
costs on an attorney and client
scale including the costs consequent
upon the employment of two counsel. I am satisfied that such a cost
order is justified under
the circumstances.
[56]
ORDER
The following orders are
made:
Case 5870:
1.
The
counter application is dismissed;-
2.
Judgment
is granted against the first and second respondent in the amount R10
143 592.84 together with compounded interest at a
rate of 12% per
annum calculated daily and capitalised monthly from 1 July 2018 to
date of final payment;-
3.
An
order declaring the immovable property, known as Portion 1 of the
Farm Middenspruit Zuid 2377, District Kroonstad, Free State
Province
measuring 476, 1693 hectares, held under Deed of Title T12794/2010,
specially executable in favour of the applicant is
granted;-
4.
The
first and second respondents’ are ordered to pay the
applicant’s costs on an attorney and client scale including
the
costs consequent upon the employment of two counsel.
Case 109/2019
1.
The
counter application is dismissed;-
2.
The
rule
nisi
dated 24 January 2019 is confirmed;-
3.
Judgment
is granted against the sixth respondent in the amount of R10 143
592.84 together with interest at a rate of 12% per annum
from 1 July
2018 to date of final payment;
4.
An
order declaring the immovable property, known as Goedverwachting 2335
Kroonstad District, Free State Province measuring 256,
9596 hectares,
held under Deed of Title T11314/2005, specially executable in favour
of the applicant is granted;-
5.
The
sixth respondent is ordered to pay the applicant’s costs on an
attorney and client scale including the costs consequent
upon the
employment of two counsel.
L.B.J. MOENG, AJ
On
behalf of applicant: Adv. FH Terblanche SC and AJ
Wessels
Instructed by:
Mcintyre &
Van Der Post
BLOEMFONTEIN
On
behalf of the respondents: Mr. HSL Du Plessis
Instructed
by:
Blair
Attorneys
BLOEMFONTEIN
COUNTER APPLICATION!