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[2016] ZAGPPHC 790
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Standard Bank of SA Limited v Coskey and Others (2015/64021) [2016] ZAGPPHC 790 (1 September 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION. PRETORIA
CASE
NO: 2015/64021
DATE:
1 SEPTEMBER 2016
In
the matter between:
THE
STANDARD BANK OF SA
LIMITED
............................................................................
Plaintiff
And
COSKEY:
NORVAL LINLEY N
O
...............................................................................
First
Defendant
COSKEY:
MERLE N
O
.............................................................................................
Second
Defendant
THE
BEST TRUST CO (JHB) (PTY) LTD N
O
........................................................
Third
Defendant
COSKEY:
NORVAL
LINLEY
...................................................................................
Fourth
Defendant
COSKEY:
ALWYN
QUANGUY
....................................................................................
Fifth
Defendant
ADAMS
AJ:
[1]
This
is an application by the plaintiff for summary judgment against the
first to fifth defendants. The first to third defendants
are cited in
their capacities
nomine officio
as trustees for the time being of the KKC Residence Trust
(‘the
Trust’).
The fourth and fifth defendants, who are cited
in their personal capacities, bound themselves as Sureties to the
plaintiff for
any debts by the Trust.
[2]
The
action against the defendants is founded on a written mortgage loan
agreement, a mortgage bond and a deed of suretyship. The
written
Home
Loan Agreement
was entered into between the parties on the
21
st
of September 2008, and pursuant to the said agreement
the plaintiff lent and advanced to the Trust the principal sum of
R1,570,700.00,
and the ‘
total
cost of the agreement’
amounted to R4,657,989.60,
inclusive of interest payable over the period of the duration of the
loan, related and other charges.
The initial term of the loan was 240
months, therefore 20 years, and the initial monthly repayments were
R19,347.54 per month.
Furthermore, on the 21
st
of
September 2008, the fourth and fifth defendants signed a written
Suretyship in terms whereof they bound themselves as sureties
for the
payment to the plaintiff when due of all the present and future debts
of the Trust.
[3]
Summons was issued against and served on all of the defendants on the
24
th
August 2015. Subsequently the plaintiff filed an
application for default judgment against all of the defendants, which
application
was finally heard on the 23
rd
of March 2016,
after having been removed from the motion court roll on the 1
st
of December 2015. On the 23
rd
of March 2016 the Trust was
represented by the first defendant, who appeared in person and who
made submissions on behalf of all
of the defendants against the
granting of the default judgment. On that date the Court (Van
Nieuwenhuizen J) ordered the 1
st
, 2
nd
, 3
rd
and 4
th
defendants to file a notice of intention to
defend, which they did by serving the said notice on the offices of
the plaintiffs’
attorneys of record on the 13
th
April 2016. It appears from the papers before me that the 5
th
defendant never entered an appearance to defend, and the plaintiff
can therefore not proceed with the application for summary judgment
against him.
[4]
.
As regards the first to fourth defendants, they are represented in
the Summary Judgment proceedings by the first defendant, who
also
appeared in person at the hearing of the said application on the 26
th
August 2016. These defendants are opposing the application for
summary judgment on the basis that service of the summons on them
was
defective and therefore of no force and effect. They also complain
about the fact that, according to them, there had not been
compliance
with the provisions of section 129 of the National Credit Act no 34
of 2005
(‘the Act’)
in that the section 129 notice omitted to inform them of their right
to seek debt review. For the rest, the first to fourth defendants
contend that they should be given an opportunity to have their debt
restructured to fit in with their present financial situation.
They
also allude to the fact that the plaintiff had made itself guilty of
reckless lending, as defined in the Act, in that the
Trust was over -
indebted when it was granted the loan.
[5]
As
indicated above the plaintiffs claim is based in the main on a
written
Home Loan Agreement,
which was granted against security of a
Continuing
Covering Mortgage Bond
which was registered over the property
of the Trust in favour of the plaintiff. Although the plaintiff in
the summons prayed for
an Order declaring the mortgaged property of
the Trust specially executable, I was informed by Counsel on behalf
of the plaintiff
at the hearing of the application for summary
judgment that the plaintiff was not pursuing that order at this stage
as the plaintiff
needed to place updated facts before the Court
relating to the amounts due. It is therefore not necessary for me
presently to have
regard to the considerations provided for in
Uniform Rule 46(1 )(a). The only issue which I need to consider is
whether the plaintiff
is entitled to a monetary judgment against the
first to fourth defendants for the amount presently outstanding on
the home loan.
[6]
At the
time of the issue of the summons, the Trust was in breach of the said
agreement in that it was in arrears with the monthly
payments as and
at the 1
st
June 2015 in the total amount of R392.215.20,
with the total debt due being R2,256,239.42.
[7]
Although the Trust has since the issue of the summons been
maintaining regular payment of monthly instalments, the situation has
not improved mainly because of the amount of the arrears, which meant
that by the time the application for summary judgment was
heard the
principal indebtedness had in fact increased.
[8]
According to the Sheriffs returns of service, the summons was served
on all of the defendants at their
domicillium
citandi et executandi
by handing copies thereof to the
housekeeper.
[9]
Notice
of service of the summons clearly came to the attention of all of the
defendants, because they initially opposed the application
for
default judgment against them and subsequently entered notice of
appearance to defend.
‘
IRREGULARITY’
- SERVICE OF THE SUMMONS
[10]
No
prejudice to the defendants appears to have resulted from the alleged
defective service.
[11]
I associate myself entirely with the following remarks by the court
in the matter of
Viljoen v
Federated Trust Ltd,
1971 (1) SA 750
(O):
‘
The
Rules of Court, which constitute the procedural machinery of the
Courts, are intended to expedite the business of the Courts.
Consequently
they will be interpreted and applied in a spirit which will
facilitate the work of the Courts and enable litigants
to resolve
their differences in
as
speedy and
inexpensive a manner as possible’.
[12]
In
the present matter the defendants suffer no prejudice. The service of
the summons was effective: They received the summons and
the
particulars of claim and were able to enter an appearance to defend.
The fact that the defendants entered an appearance to
defend is
indicative of the fact that they received and have knowledge of the
summons and were able to defend it. The inference
to be drawn from
this is that the service was effective.
[13]
In
the premises, I am of the view that the defence of the defendants
based on the alleged defective service of the summons is not
sustainable and stands to be rejected.
NON
- COMPLIANCE WITH THE
NATIONAL CREDIT ACT
>
[14]
,
The defendants also allege that the provisions of the
National Credit
Act have
not been complied with in that the
section 129
did not make
reference to the fact that the defendants could refer the matter to a
Debt Counsellor.
[15]
The
National Credit Act is
not applicable in this matter for the simple
reason that the credit agreement in question is a ‘
large
agreement'
as defined in section 9(4) of the Act in that it is
a mortgage agreement and, in addition, because the principal debt is
for an
amount in excess of R1,500,000.00, which is higher than the
threshold established in terms of section 7(1 )(b), that being
R250,000.00,
and the agreement was concluded with the Trust, being a
juristic person as defined in the Act, as the consumer.
[16]
In any event, in the matter of S
A
Taxi Development Finance v Phalafala,
(an unreported GSJ
Judgment of Van Eeden J, in which the following principle was laid
down:
‘
Non
- receipt of the notice prior to receiving the summons is not a
defence dilatory or otherwise, to the plaintiff’s claim
in this
matter. The subsequent receipt of the notice at the time of the
service of the summons and the defendant’s reaction
thereto,
entitle the plaintiff to approach the court for an order to enforce
the credit agreement. No purpose would be served to
give him the
notice for a second time - it would be placing form above substance
to require a further notice to be sent to the
defendant. It is
accordingly unnecessary to adjourn the matter or to make an order in
terms of s 130(4)(b), since the defendant
actually received the
notice and since the time periods of S 130(1) and (1)(a) have
actually expired. I consequently fmd that the
fact that the defendant
did not receive the notice prior to the service of the summons ‘does
not render the notice invalid
and the issue of the summons
premature’.
[17]
Therefore, the defendants’ second point
in
limine
also stands to be dismissed.
[18]
Still on the application of the
National Credit Act, the
defendants
claim that they should not be held liable in terms of the agreement
as the plaintiff was guilty of ‘
reckless
lending’.
As I have indicated above, the
National Credit
Act does
not find application in this matter for the reasons already
mentioned. Even more so are the provisions of the Act relating to
‘
reckless credit - granting’
and ‘
over- indebtedness’,
as section 78(1) provides that Part D of Chapter 4
(‘Over-indebtedness and
reckless credit’)
does not apply to a credit agreement
in respect of which the consumer is a juristic person.
[19]
I am
nevertheless not persuaded that the defendants have made out a
defence based on ‘
reckless
lending’.
[20]
None
of the requirements relative to a defence based on ‘
reckless
lending’
as set out in S
A
Securitisation v Mbatha,
2011 (1) SA 310
(GSJ), were set out
by the defendants. In fact, the defendants failed to place before me
any information which would have enabled
me to find that there was
reckless lending. The sum total of the ‘evidence’ by the
defendants that the plaintiff made
itself guilty of reckless lending
was an allegation in their opposing papers to that effect coupled
with a claim that the Trust
in recent times had not been able to meet
its obligations in terms of the Home Loan Agreement. Therefore, so
the argument goes
on behalf of the defendants, this demonstrates that
there was reckless credit granting by the plaintiff when the loan was
granted
during 2008. This contention is not tenable.
[21]
.
In the premises, I am of the view all of the defences of the first to
fourth defendants on the merits of the plaintiffs claim
should fail.
This means that the first to fourth defendants have not satisfied the
Court by affidavit, as they were required to
do in terms of Uniform
Rule 32(3)(b), that they have a
bona
fide
defence to the plaintiffs action. I am of the view that
the defendants do not have a
bona
fide
defence to the plaintiffs claim, and summary judgment
should therefore be granted against them as prayed for by the
plaintiff.
ORDER
Accordingly, I
make the following order:
Summary Judgment
is granted in favour of the plaintiff against the first to fourth
defendants,
jointly and severally, the one paying the other to be absolved, as
follows:
1.
Payment of the sum of R2,256,239.42;
2.
Interest on the aforesaid amount of R2,256,239.42 at the rate of
9.25% per annum, interest calculated daily and compounded monthly
in
arrears from 1 June 2015 to date of final payment, both days
inclusive;
3.
Cost
of suit on the scale as between attorney and client.
4.
As
far as the plaintiffs claim to have the immovable property of the
trust declared specially executable, I grant the first to fourth
defendants leave to defend, with the cost of the application for
summary judgment to be in the cause of the main action.
L ADAMS
Acting
Judge of the High Court Gauteng Division, Pretoria
HEARD ON: 26
th
August 2016
JUDGMENT DATE:
1
st
September 2016
FOR THE
PLAINTIFF: Adv
INSTRUCTED BY:
Strydom Britz Mohulatsi Inc
FOR THE
DEFENDANTS: 1
st
Defendant (in person)
INSTRUCTED BY:
1
st
Defendant (in person)