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[2017] ZAGPPHC 85
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Firstrand Bank Limited v Van Coller (80706/2016) [2017] ZAGPPHC 85 (8 March 2017)
THE
HIGH COURT OF SOUTH AFRICA (GAUTENG DIVISION, PRETORIA
REPUBLIC
OF SOUTH AFRICA
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED
Date
of hearing: 21 February 2017
Date
of judgment: March 2017
In
the matter between:
Case
number 80706/2016
FIRSTRANDBANK
LIMITED
Applicant
and
DREW
VAN COLLER
Respondent
JUDGMENT
BRENNER,
AJ:
1.
In this application for summary judgment involving the
foreclosure under a mortgage bond, I granted judgment on 21 February
2017
in the following terms, namely:
1.
Payment of the sum of R549 357,20;
2.
Payment of interest on the above amount at a variable rate
of 11,25% per annum calculated daily and compounded monthly from
27
September 2016, to date of payment, in accordance with regulation
40 of the National Credit Act, 34 of 2005, as amended;
3.
An order declaring the respondent's immovable property
described below as specially executable:
A
unit consisting of:
(a)
Section
Number 23 as shown and more fully described on Sectional Plan number
SS 747/2005 in the scheme known as THE BATS in respect
of the land
and building or buildings situate at ERF 426 DASSIERAND TOWNSHIP,
Local Authority: TLOKWE CITY COUNCIL, of which section
the floor area
according to the sectional plan is 43 (FORTY THREE) square metres in
extent;
and
(b)
an
undivided share in the common property in the scheme apportioned to
the said section in accordance with the participation quota
as
endorsed on the said sectional plan.
HELD
by Deed of Transfer number ST 59361/2015 And
An
exclusive use area described as PARKERING P23 measuring 16 (SIXTEEN)
square metres being as such part of the common property,
comprising
the land and building or buildings situate at ERF 426 DASSIERAND
TOWNSHIP, Local Authority: TLOKWE CITY COUNCIL, as
shown and more
fully described on Sectional Plan number SS 747/2005, held by
NOTARIAL DEED OF CESSION NO SK03591/2015;
4.
an order authorizing and directing the Registrar of this
Honourable Court to issue a writ against the respondent's immovable
property
described above;
5.
costs of suit on the attorney and client scale, to be
taxed."
2.
These are the reasons for the order.
3.
The property described in paragraph 3 of the above order will be
referred to as "the property". On 20 May 2015, Drew
van
Coller ("van Coller") and FirstRand Bank Limited executed a
written home loan agreement ("the loan agreement")
in terms
of which the property was mortgaged for R535 000,00. The mortgage
bond was registered on 6 July 2015.
4.
As at 13 October 2016, van Coller had fallen into arrear with the
repayment of the agreed monthly instalments of R5 708,29, the
arrears
being R19 833,16. The Summons for the relief adumbrated above was
served on 24 October 2016, at van Coller's chosen domicilium,
on one
T Ramulifho, occupier of the premises.
5.
Van Coller served a notice to defend on 20 October 2016 and an
application for summary judgment was served on 8 November 2016.
6.
On 20 October 2016, van Coller's attorneys served a notice in terms
of rule 35(12) and (14) on FRB's attorneys, ("the notice")
calling for copies of the sale agreement for the property, van
Coller's FICA documents, the bond application, the assessment under
section 81(2) of the National Credit Act 34 of 2005 ("the NCA")
and FRB's valuation report on the property. A reply to
the notice was
served on 10 January 2017, to which the documents required by van
Coller were attached.
7.
The opposing affidavit resisting summary judgment was served on 14
February 2017.
8.
In limine, Counsel for van Coller argued that the Court should
disabuse its mind of the documents discovered under the notice.
He
relied on rule 32(4) in support of this contention. His submission
was correct. Rule 32(4) provides that no evidence may be
adduced by
the plaintiff otherwise than by the affidavit in support of summary
judgment. I was therefore enjoined to have regard
only to the
particulars of claim, its annexures, the summary judgment affidavit
and the opposing affidavit, and I proceeded accordingly.
9.
Several points were raised by van Coller.
10.
Van Coller asserted that the particulars of claim were excipiable in
terms of rule 17(3) because the summons had not been signed
and
issued by the registrar. After compliance was proved, the point was
abandoned.
11.
Van Coller averred that the deponent to FRB's summary judgment
affidavit was neither authorised nor had personal knowledge of
the
facts germane to the matter. This point was ventilated in
Rees
and another v Investec Bank Limited 1976 {2) SA 226 (T)
.
This point was abandoned in argument.
12.
Van Coller argued that, although the property fell within the
jurisdiction of this Court, he did not reside within its
jurisdiction.
Accoring to his affidavit, he resided at 20 Joubert
Street, Nelspruit, Mpumalamga. A court in whose area of jurisdiction
the property
is situate has the requisite jurisdiction to entertain
actions pertaining to such property. See
Geyser v
Nedbank Limited 2006{5) SA 355 (W)
.
This
point was abandoned in argument.
13.
The two remaining defences related to the alleged fraudulent scheme
to which van Coller had been subjected in inducing him to
buy the
property in the first place, and to the averment that the advance of
the loan constituted reckless lending within the purview
of section
81(2) of the NCA insofar as no assessment was conducted under this
section.
14.
I refer to the defence based on the perpetration of a fraudulent
scheme vis a vis van Coller. This is the gist of it:
"10.1
I bring to the courts attention that I together with a number of
members of the public, consisting predominantly of rugby
players for
various rugby unions, are in the process of bringing an application
to overturn and declare invalid what purports at
this stage to be an
illegal scheme operated by a Mr Andre Gerrit Rossouw. Mr Rossouw
played a pivotal role in the registration
of the immovable properties
in my name and in the names of the other individuals, who intend to
launch the application within the
next few months.......
10.3 I advise that the
applicant together with all major Banks will be cited as respondents
in the application, which will ultimately
have a significant bearing
on the applicant's current action under the above case number.
10.4 I advise that
through the representations and conduct of Rossouw, he had caused 4
(four) mortgage bonds to be registered in
my name.....
10.5 I furthermore do
not deny that I am unable to currently pay such mortgage bonds as my
current monthly income amounts to R20
501,98. The mortgage bonds and
my other living expenses and basic necessities amounts to about R28
760,00
per month, which amount far exceeds the amount I am
able to pay.......
"
15.
The deeds office search which van Coller attached to his affidavit
revealed that four sectional title units had been acquired
by him,
all on the same day, 9 April 2015, and that bonds were registered
thereover in favour of various banks including FRB. The
properties
being sections 118 and 72 Villa da Bell, section 23 The Bats (the
property in casu), and section 45 Onder Die Rantjie.
16.
The purchase prices for this portfolio totalled R1 813 000,00.
Section 118 Villa de Bell and section 45 Onder die Rantjie were
mortgaged to SB Guarantee Co (RF) (Pty) Ltd, section 42 Villa da Bell
was mortgaged to Absa Home Loans and section 23 The Bats
to FRB. The
total exposure under the bonds equated to the purchase prices save
that the bond in favour of FRB was R10 000,00 less.
In the result,
van Coller exposed himself to loans totalling R1 803 000,00.
17.
The registration of the bonds occurred over a period of less than one
month, that is, between 11 June 2015 and 16 July 2015.
It is
significant to repeat that the loan agreement between FRB and van
Coller was executed on 20 May 2015, before any of the bonds
was
registered.
18.
There is no evidence to implicate FRB in the so-called chicanery
allegedly perpetrated on van Coller. On his own version, he
was the
victim of an "illegal scheme" devised by Andre Rossouw. He
fails to elaborate on the nature of this scheme. Even
if this scheme
was fraudulent, no inference can be drawn that FRB was complicit in
same. The threat to cite the major banks in
proceedings against
Rossouw takes the matter no further. This does not constitute a bona
fide defence to the claims against van
Coller.
19.
Concerning the defence of reckless lending, in terms of section
80(1)(a) of the NCA, the operative paragraphs of the affidavit
pertaining to such allegations are quoted below:
"8.
4
I have been advised, which advice I accept, that a credit provider
prior to granting credit needs to assess a proposed consumer's
general understanding and appreciation of the risk and costs of the
proposed credit and understanding of his/her rights and obligations.
In order to do so the credit provider needs to request specific
information from the proposed consumer, such as the consumer's
financial history and position.
8.5
I never provided any information in respect of my financial history
to the applicant and I did not partake in an assessment
as required
by Section 81(2) of the Act at the time when the agreement was
concluded. I, therefore, respectfully submit that, to
the best of my
knowledge, the applicant did not conduct an assessment as required by
the above section when the credit was granted
nor was I made aware of
my rights, obligations and the risk and costs involved in entering
into the loan agreement. Finally, the
applicant could not have been
in a position to properly assess my existing financial means at the
time of granting the credit.
"
20.
Section 81(1) of the NCA deals specifically with the prevention of
reckless credit. It is necessary to quote its provisions
in full, my
emphasis included:
"81(1)
When applying for a credit agreement, and while that application is
being considered by the credit provider, the prospective
consumer
must fully and truthfully answer any requests for information made by
the credit provider as part of the assessment required
by this
section.
(2) A credit provider
must not enter into a credit agreement without first taking
reasonable steps to assess-
(a) the proposed
consumer's-
(i) general
understanding and appreciation of the risks and costs of the proposed
credit, and of the rights and obligations of a
consumer under a
credit agreement;
(ii) debt re-payment
history as a consumer under credit agreements;
(iii) existing means,
prospects and obligations; and
(b) Whether there is a
reasonable basis to conclude that any commercial purpose may prove to
be successful, if the consumer has
such a purpose for applying for
that credit agreement.
(3) A credit provider
must not enter into a reckless credit agreement with a prospective
consumer.
(4) For all purposes
of this Act, it is a complete defence to an allegation that a credit
agreement is reckless if-
(a) the credit
provider establishes that the consumer failed to fully and truthfully
answer any requests for information made by
the credit provider as
part of the assessment required by this section; and
(b) a court or the
Tribunal determines that the consumer's failure to do
so
materially affected the ability of the credit provider to make a
proper assessment.
"
21.
In the declaration section to the loan agreement, signed on 20 May
2015, post his purchase of the four properties mentioned
above, van
Coller confirmed having read and understood the terms of the
agreement. Certain clauses are pertinent:
"5.11
The Customer hereby confirms that he/she has disclosed to the Lender
all relevant information relating to existing credit
agreements,
suretyships and current credit applications submitted to any other
credit provider.........
5.16 The Customer
certifies that, to the best of his/her knowledge and belief, the
information herein provided to the Lender is
true, accurate and
complete. The Customer further certifies that his/her marital and/or
legal status has not changed and further
that his/her financial
status has not deteriorated since the date on which he/she submitted
his/her application to the Lender.
The Customer undertakes to notify
the Lender in writing should his/her financial, marital and/or legal
status change during the
term of this agreement.
5.17 The Customer
acknowledges that should he/she furnish the Lender with incorrect or
false information, he/she may be denied the
protection offered by the
Act.
5.18 The Customer
declares that he/she is able to afford the repayments as set out in
this agreement.
22.
Immediately above the signature clause the following confirmation
appears:
"I
confirm that I have read, understood and agree to be bound by the
terms and conditions as stipulated in this agreement."
23.
Rule 32(3)(b) of the Uniform Rules obliges a respondent in summary
judgment proceedings to adduce a bona fide defence to the
action by
way of an affidavit which discloses
"fully
the nature and grounds of the defence and the material facts relied
upon therefor."
24.
At page B1-223 of Erasmus, Superior Court Practice, the author
states:
"If,
however, the defence is averred in a manner which appears in all the
circumstances to be needlessly bald, vague or sketchy,
that will
constitute material for the court to consider in relation to the
requirement of bona fides.
"
25.
This much was stated in the case of
Breitenbach v Fiat SA
(Edms) Bpk
1976 (2) SA 226
(T).
At p228 the Court held as
follows:
"It
must be accepted that the subrule was not intended to demand the
impossible. It cannot, therefore, be given its literal
meaning when
it requires the defendant to satisfy the Court of the bona fides of
his defence. It will suffice......if the defendant
swears to a
defence, valid in law, in a manner which is not inherently and
seriously unconvincing."
26.
As a useful starting point, judicial notice may be taken of standard
commercial practice amongst banks regarding the lending
of money.
Their primary objective is to assess a potential borrower's
affordability, via his income stream, taken with his average
monthly
expenses, to determine his ability to sustain payment of the monthly
instalments.
27.
Simple common sense dictates that banks are not in the business of
committing commercial self-sabotage, and advancing money
randomly,
only to have to take steps immediately thereafter to recover same.
28.
Van Coller asserts that he never provided any information in respect
of his financial history to FRB and did not partake in
any assessment
as required by section 81(2) of the NCA. Nor was he made aware of his
rights, obligations and the risk and costs
involved in entering into
the loan agreement. Yet van Coller does not deny signing the loan
agreement, nor does he deny having
read and understood its contents.
29.
A full conspectus of this agreement outlines the precise nature of
his rights, obligations and the risk and costs involved in
entering
into same. At clause 5.16 of the loan agreement, he admits having
submitted an application to FRB.
30.
He states that he provided no information about his financial
history. He does not assert that he gave no information or documents
to FRB. On matters which fall squarely within his personal knowledge,
he does not specify what information and documents he did
provide to
FRB. He does not specify what FRB should have done but did not do
before authorizing the loan.
31.
He provides no proof that FRB was made aware or was in fact aware at
any stage prior to the loan approval of the fact that he
had bought
and agreed to mortgage three other properties around the same time
that he had acquired the property in casu. These
purchases were all
made on 9 April 2015, about six weeks before he signed the loan
agreement. There is no suggestion that FRB could
and should have
known about them. This is information of a material nature which
would have affected FRB's decision to make the
advance in the first
place.
32.
The dubious deficiency in van Coller's version on this defence, read
in the context of the loan agreement signed by him, make
it
inherently improbable that FRB did not conduct the assessment as
required by section 81(2) of the NCA.
33.
Van Coller's allegations fall short of qualifying as a bona fide
defence on the probabilities.
34.
Van Coller attempts to gratuitously and unjustifiably shift the
responsibility to FRB for his decision, in April 2015, to buy
four
properties, all to be encumbered for amounts exceeding R1,8 million
in the aggregate, on a monthly income of some R20 000,00.
35.
There is no warrant for FRB to have to bear the consequences of van
Coller's conduct in this regard.
36.I
refer to the dictum in
Wightman t/a JW Construction v Headfour
(Pty) Ltd and another 2008(3) SA 371 (SCA),
at paragraph 13,
which, while dealing with disputes of fact, traverses the
consequences of bare allegations, (my emphasis included):
"A
real, genuine and bona fide dispute of fact can exist only where the
court is satisfied that the party who purports to raise
the dispute
has in his affidavit seriously and unambiguously addressed the fact
said to be disputed. There will of course be instances
where a bare
denial meets the requirements because there is no other way open to
the disputing party and nothing more can therefore
be expected of
him. But even that may not be sufficient if the fact averred lies
purely within the knowledge of the averring party
and no basis is
laid for disputing the veracity or accuracy of the averment
.
When the facts averred are such that the disputing party must
necessarily possess knowledge of them and be able to provide an
answer (or countervailing evidence) if they be not true or accurate
but, instead of doing so, rests his case on a bare or ambiguous
denial the court will generally have difficulty in finding that the
test is satisfied.
I say "generally" because
factual averments seldom stand apart from a broader factual matrix of
circumstances all of which
needs to be borne in mind when arriving at
a decision.
37.
I quote from paragraph 25 F et sequitur, at page 232 of the case of
Majola v Nitro Securitisation 2012(1) SA 226 SCA:
"The
purpose of summary judgment is to "enable a plaintiff with a
clear case to obtain swift enforcement of a claim against
a defendant
who has no real defence to that claim." It is a procedure that
is intended "to prevent sham defences from
defeating the rights
of parties by delay, and at the same time causing great loss to
plaintiffs who were endeavouring to enforce
their rights".
38.
Van Coller was unable to prove a bona fide, genuine, prima facie
defence on the merits. His opposing affidavit is devoid of
any
relevant factual substantiation for a case based on reckless lending
by FRB.
39.
The property in casu was not van Caller's primary residence, and this
was undisputed. An order to declare the property specially
executable
was therefore warranted.
40.
In the result, the order outlined above was duly granted.
------------------------------------
T
BRENNER
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, JOHANNESBURG
7
March 2017
Appearances
Counsel
for the Applicant: Advocate A P Ellis
Instructed
by: PDR Attorneys
Counsel
for the Respondent: Advocate P P Ferreira
Instructed
by: Strydom and Bredenkamp Inc Attorneys