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[2016] ZAKZPHC 44
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Home Obligors Mortgage Enhanced Securities (Pty) Limited v Louw and Another (5545/2012) [2016] ZAKZPHC 44 (30 May 2016)
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
HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE NO:
5545/2012
DATE: 30 MAY 2016
HOME OBLIGORS
MORTGAGE ENHANCED
SECURITIES (PTY)
LIMITED
..........................................................................................
PLAINTIFF
And
LOUIS FREDERICK
LOUW
.............................................................................
FIRST
DEFENDANT
GERDA
LOUW
................................................................................................
SECOND
DEFENDANT
JUDGMENT
Delivered: 30 May
2016
MBATHA J:
[1]
The plaintiff in this action seeks an order in the following terms:
(a)
An order declaring the following immovable property executable:
ERF
4…. T…… (EXTENSION 3….) REGISTRATION
DIVISION FU, PROVINCE OF KWAZULU-NATAL IN EXTENT 3……
(THREE HUNDRED AND ELEVEN) SQUARE METERS
HELD
BY DEED OF TRANSFER NO. T1……. SUBJECT TO THE CONDITIONS
CONTAINED THEREIN
Against
the defendants jointly and severally the one paying and the other to
be absolved for:
(b)
Payment of R364 243.63;
(c)
Interest thereon at the legal rate of 7.70% per annum from 26 January
2012 to date of final payment, both days inclusive;
(d)
Costs of suit on the scale as between attorney and client.
[2]
The plaintiff avers that on or about March 2007 at La Lucia Ridge,
ABSA Bank Limited and the defendants concluded a written
loan
agreement. The material terms of that agreement were that ABSA would
lend and advance to the defendants a specified amount
of money set
out in the loan agreement for the purchase of the immovable property.
The defendants would repay the said monies in
specified instalments
and cause a mortgage bond, over the immovable property to be
registered in favour of ABSA. In the event of
the defendants
defaulting with payments of their instalments, ABSA would be
entitled, without further notice to reclaim the full
balance
outstanding, interest thereto and legal costs.
[3]
A mortgage bond was subsequently registered over
Erf
4….. T…… (Extension 3……)
Registration Division FU, Province of KwaZulu-Natal in extent 3…..
(Three hundred and eleven) square meters,
Held
by Deed of Transfer No. T1……. subject to the conditions
contained therein.
[4]
On or about 25 January 2012 the defendants were in default to the
plaintiff in the sum of R364 243.63, which was confirmed
by a
certificate of balance signed by the bank manager, one Hans Combrink.
The defendants had defaulted with their monthly payment
and this led
to the institution of these proceedings before court.
[5]
The action is defended by the first defendant only and the plaintiff
seeks relief against the first defendant only as the defendants
are
now divorced. The second defendant does not oppose the relief sought
by the plaintiff on the basis that the settlement agreement
to their
divorce action provides that the property in question would remain
the sole property of the first defendant as of 29 October
2008. This
is not disputed by the first defendant and is confirmed by Exhibit
“A” being a copy of the Deed of Settlement
to the
Divorce. In the light thereof the plaintiff seeks judgment against
the first defendant only.
[6]
The first defendant has raised a number of defences to the
plaintiff’s action.
(a)
He denies that he is indebted to the plaintiff as he had entered into
a contract with ABSA and not the plaintiff;
(b)
He denies that he received the Section 129 notices in terms of the
National Credit Act;
[1]
(c)
He denies that the copies of the loan agreement and mortgage bond are
genuine copies as the fire in the Kempton Park offices
of ABSA
destroyed the loan agreements;
(d)
The first defendant avers that the cession by ABSA to the plaintiff
is invalid on the basis that his consent was not obtained
and that it
is in violation of Section 78 of the Banks Act;
[2]
(e)
He avers that ABSA denied him proof of ownership of the debt and that
is the reason he stopped making payments; and
(f)
He also challenged the jurisdiction of this court.
[7]
In proving its case the plaintiff called as witnesses, Gerda Hechter,
the first defendant’s ex-wife, David John Toerien,
a banker
from ABSA in charge of the Debt Collection and Restructuring teams
and Imtiaz Mohamed from the Legal Collections Department
of ABSA. The
first defendant also gave evidence in these proceedings.
[8]
The evidence before the court as given by Toerien, has shown that the
plaintiff has
locus standi
to bring the action against the
defendants. His evidence is that ABSA entered into the loan agreement
with the defendants whereby
ABSA paid the seller of the immovable
property to the Defendants the purchase price. His evidence is that
after six or twelve months
from the date of the payment of the first
instalment by the mortgagee, seasoned loans from ABSA are transferred
for securitisation.
In this case ABSA entered into a securitisation
agreement with the plaintiff, whereby a schedule of claims were ceded
to the plaintiff
including the defendants. The sale agreement between
ABSA and the plaintiff was handed in by Toerien. Thereafter ABSA
entered into
a Servicing Agreement with the plaintiff, whereby ABSA
continued to administer the loans, monitoring payments, effecting
changes
in interest rates, etc., as ABSA has the necessary facilities
for such administrative functions. ABSA therefore acts as an agent
for the plaintiff. He confirmed that a valid cession agreement was
concluded between ABSA and the plaintiff. He handed in Bundle
2 as
Exhibit “B” which incorporates the following documents:
1.
Sale Agreement – Plaintiff and ABSA Bank Limited dated 14/8/07
2.
Serving Agreement – Plaintiff and Absa Bank Limited dated
14/8/07
3.
Deed of Cession dated 13/11/07 – Registered 27/111/07
4.
ABSA Mortgage Bond No. 1416/07
5.
Letter by ABSA Bank Limited to Defendants dated 12/10/11
6.
Common Terms Agreement between Plaintiff and ABSA Bank Limited dated
14 August 2016
[9]
I am satisfied that the cession is valid as the loan agreement,
together with the mortgage bond are endorsed to indicate that
a
cession has taken place. In this matter the endorsement appears on
the mortgage bond.
[10]
I also find that there is no breach of the Banks Act
[3]
or any rules in terms of the Reserve Bank Act.
[4]
This is in fact common practice in the banking business.
[11]
In general a creditor is free to cede its rights to any person. It
does not need the consent of the debtor to do so, nor is
it obliged
to give notice to the mortgagee. I have not found any limiting
provision in the agreement that was concluded by ABSA
and the
defendants. A notice to a debtor is not a pre-requirement for the
validity of the cession, although the entire contract
involves the
cedent, the cessionary and the debtor. The standard conditions of the
defendants’ bond in Exhibit “C”
paragraph 12 also
state as follows:
‘
12.
Cession of mortgage bond.
The
bank shall be entitled at any time to cede any or all of its rights
under the mortgage bond to any person and to register such
cession in
the appropriate deeds register and the Mortgagor hereby agrees and
consents to any such cession or any increase in the
number of
mortgagees.’
This
put paid to any argument that the first defendant’s consent was
required. In the case where the cessionary, in this case
the
plaintiff, acquires the rights to a principal debt, it is logical
that he steps into the shoes of the cedent. This does not
create any
novation of the contract as the first defendant believes that it has
such an effect. See
National
Sorghum Breweries Ltd v Corpcapital Bank Ltd
[5]
at para 15, where it was held:
‘
The
“sale” agreement between Afinta Financial Services and
Afinta Finance regulated the transfer of the rights in the
lease
agreements referred to in the annexure (annexure A). Their later
agreements – concluded by their conduct in preparing
the two
further lists when seen in the context in which they did so –
to transfer the rights in seven further leases did
not purport to
amend any of the terms of the former transaction. They were no more
than later transactions in similar terms, which
the sale agreement
did not preclude them from concluding, and which required no
formalities to be valid. The defendant’s
reliance on the
non-variation clause in the “sale” agreement was quite
misconceived because no amendment to that agreement
purported to be
effected at all. It follows that the rights relating to all eighteen
vehicles leased to the defendant were properly
transferred to Afinta
Finance.’
In
this case ABSA informed the defendants in writing on 12 October 2011,
informing them of the cession and consequences.
[12]
It is accepted that should the debtor raise a defence that he had
paid the cedent instead of the cessionary that would be a
valid
defence in law. There was no reason for the default on the part of
the first defendant. The first defendant when he was informed
of the
fire at the warehouse of ABSA, he should have continued to make
payments to ABSA. It is only the original documents that
were
destroyed by the fire. The documents which were electronically
captured kept the terms of the agreement alive and nothing
suggests
that they had been tampered with.
[13]
The first defendant’s argument that he could not transfer the
mortgage bond to his name because ABSA required that he
pay the
amount of R15 000.00 costs occasioned by the securitisation
agreement does not hold water. It is common cause that
transfers of
property occur only by registration, the transfer from the joint
estate to his name could only be effected by payment
of transfer
costs.
[14]
I also find that the summons was not premature, as the plaintiff
sufficiently complied with the provisions of Section 129 read
with
Section 130 of the National Credit Act.
[6]
[15]
The certificate of balance issued by the manager Combrink at the
institution of the action is attached to the summons as well
as the
last certificate of balance presented by Mohamed as Exhibit “E”
are accepted as valid, irrespective that there
had been mistakes with
the other two which were issued prior to the institution of this
action by the plaintiff. This also forms
part of the mortgage terms
which the first defendant signed for. This appears in paragraph 9 on
page 88 of Bundle 2 in Exhibit
“B”:
‘
9.
PROOF OF INDEBTEDNESS
9.1
The amounts at any time owing by the Mortgagor to the Bank which are
secured under this bond (including interest and the rate
or rates at
which and the period or periods for which interest is calculable) and
the fact that such indebtedness is due and payable
may be determined
and proved by a certificate signed by any manager or the Bank, whose
appointment and authority to sign such certificate
need not be
proved.
9.2
Such certificate shall be accepted as proof of the facts stated
therein, unless the Mortgagor is able to prove the facts incorrect.’
[16]
On the issue of jurisdiction, this court has concurrent jurisdiction
with the Durban High Court. I cannot see why the first
defendant
refers to it as forum shopping.
[17]
I accept the evidence of the plaintiff in all respects and reject
that of the first defendant.
[18]
I therefore make the following order against the first defendant:
(a)
Declaring the following immovable property executable:
Erf
4…… T……. (Extension 31) Registration
Division FU, Province of KwaZulu-Natal in extent 3……..
(Three hundred and eleven) square meters. Held by Deed of Transfer
No. T1……… subject to the conditions contained
therein;
(b)
The first defendant is ordered to pay the amount of R534 609.12;
(c)
Interest thereon at the rate of 9.20% per annum, capitalised monthly,
from 19 May 2016 to date of payment;
(d)
Costs of suit on the scale between attorney and client.
MBATHA
J
Date
of hearing : 23 May 2016
Date
delivered : 30 May 2016
Appearances
:
For
the Applicant : Adv. S Hoar
Instructed
by : GEYSER DU TOIT LOUW & KITCHING
PINETOWN
INC ATTORNEYS
7
Greathead Lane
Pinetown
First
Defendant : Mr LF Louw (In Person)
7
Salom Street
Seatides
Tongaat
[1]
Act
34 of 2005.
[2]
Act
94 of 1990.
[3]
Act
94 of 1990.
[4]
Act
90 of 1989
.
[5]
[2006]
2 All SA 376
(SCA).
[6]
Act
34 of 2005.