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[2014] ZAFSHC 120
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Absa Bank Limited v Hanekom and Another (1487/2011) [2014] ZAFSHC 120 (7 August 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No: 1487/2011
In
the matter between:
ABSA
BANK LIMITED
….......................................................................................................
Applicant
and
PIETER
WILLEM JOHANNES HANEKOM
….......................................................
First
Respondent
MADELEIN
HANEKOM
…....................................................................................
Second
Respondent
CORAM:
LEKALE, J
HEARD
ON:
31 JULY 2014
JUDGMENT
BY:
LEKALE, J
DELIVERED
ON:
7 AUGUST 2014
INTRODUCTION
AND BACKGROUND
[1]
This is an application for an order declaring the respondents’
immovable property specially executable in favour of the
applicant
pursuant to a judgment entered in default against them on the 30
th
October 2013.
[2]
Between April 2000 and June 2008 the respondents, who are a married
couple, secured loans from the applicant which were secured
by
mortgage bonds. On the 16
th
August 2011 the first respondent was declared over- indebted by the
Welkom Magistrate’s Court and his debts to,
inter
alia
, the applicant were rearranged.
[3]
Subsequent to the debt restructuring order payments less than the
instalments ordered by the court were, however, received by
the
applicant who, eventually, terminated the debt restructuring process
and issued summons against the respondents claiming,
inter
alia
, an order declaring the
hypothecated property specially executable. The prayer for the said
declarator was, however, referred to
the open court by the registrar
of this court.
[4]
The application for the declarator in question was, eventually,
dismissed with costs on the 30
th
January 2014 after the court found that the applicant was not
entitled to rely on section 86(10) of the National Credit Act 34
of
2005 (NCA) when it pursued the respondents legally.
[5]
The applicant, however, proceeded to bring the instant application
which the respondents still resist on the ground that they
were not
in default of any obligations under the rearrangement order.
ISSUES
IN DISPUTE
[6]
The parties are
ad idem
that the dispute between them entails determination of the question
whether or not the respondents were in default under the
restructuring
order and if so, whether or not the applicant is
entitled to the relief it seeks in this matter.
CONTENTIONS
BY THE PARTIES
[7]
It is common cause between the parties that the respondents complied
with the restructuring order by effecting regular monthly
instalments
to the Payment Distribution Agency (PDA) as directed by the court and
that the PDA, on its part, failed to transmit
full monthly payments
to the applicant.
[8]
It is, further, not in dispute that the PDA acknowledged its failures
in this regard and attributed same to problems it had
in transferring
funds to the applicant. The PDA also undertook to sort out its
problems and to effect payment to the applicant
immediately it
becomes able to make transfers.
[9]
Mr Rautenbach, for the applicant, submits that the respondents were
in default under the restructuring order because the failures
of the
PDA are attributable to them insofar as the agent in question is
theirs and acts on their behalf. In his view the
applicant was,
in law, entitled to institute action and take judgment against the
respondents simply because of failure by the
PDA to pay full
instalments as ordered by the court. Although Mr Rautenbach
concedes that a declarator sought by the applicant
would not be fair
and equitable regard being had to the responsible conduct on the part
of the respondents of effecting instalments
to the PDA in accordance
with the rearrangement order, he believes that the applicant had a
just cause to bring the present proceedings.
[10]
Mr Louw, for the respondents, eloquently contends that the default
judgment was unlawful because there existed no cause whatsoever
to
sustain the same in the light of the fact that the applicant was, as
at the date of summons, aware that the respondents were,
on their
part, in compliance with the order which effectively required the
appointment of a PDA for purposes of distributing funds
to all the
affected creditors inclusive of the applicant. In his view the
applicant did not place any grounds before the
court showing that it
is entitled to the relief it seeks save for effectively relying on
the default judgment.
EVALUATION
AND FINDINGS
[11]
It is correct, as submitted for the applicant, that the PDA
distributes funds to the creditors such as the applicant on behalf
of
the respondents in line with the court order and the PDA is, as such,
the consumer’s agent for that purpose. Failure
by the PDA
to fulfil its mandate cannot, in law and equity, be visited upon the
creditor in the position of the applicant.
To the extent that
the PDA failed to transfer correct funds to the applicant, the PDA,
and not the respondents, failed in its duty
insofar as the order, as
correctly pointed out by Mr Louw, directed the first respondent to
appoint the PDA “
with the
responsibility of
distributing
all funds received in terms [t]hereof to the creditors”
.
In accepting appointment in terms of the court order, the PDA in the
present matter assumed the responsibility of distributing
all funds
received from the respondents to the creditors listed in the relevant
annexures inclusive of the applicant. As
Mr Louw painstakingly
points out, the relevant court order did not require the respondents
to make payment of the rearranged instalments
to the applicant but to
the PDA which they did religiously and without fail.
(See:
Standard Bank of South Africa v Daya
N.O and Others
[2012] ZAECPEHC p 33
at par [10].)
[12]
The respondents are, therefore, not in default of the rearrangement
order. Even if I am wrong in this finding, I am not
persuaded
that the circumstances of the instant matter warrant execution of the
respondents’ primary residence regard being
had to the fact
that they are demonstrably able to comply with the restructuring
order and they never ever failed to comply with
the same.
COSTS
[13]
The respondents seek a punitive costs order against the applicant
with Mr Louw pointing out that, when a similar application
was heard
and dismissed on 30
th
January 2014, the applicant was already aware that the respondents
were not in default of their obligations in terms of the court
order
but it nevertheless elected to bring a fresh application relying on
the same facts.
[14]
Mr Rautenbach retorts that the applicant had just cause to approach
the court with the present application because it had not
received
the instalments stipulated by the court. In his view the
circumstances of the present matter do not justify a special
costs
order.
[15]
The conduct of the applicant is, in my opinion, reprehensible regard
being had to the fact that when it issued summons it was
already
aware that the fault lied with the PDA and not with the respondents.
It was, further, aware that the PDA had undertaken
to effect payment
immediately after it had sorted out the problem relating to
transfers. To burden the consumer who is already
in financial
distress with unnecessary legal costs is, with respect, malicious and
spiteful in my view. An established creditor
with the
applicant’s status and global standing in financial matters is
reasonably expected to show understanding, maturity
and fairness in
its dealings with its struggling, but honest and responsible debtors.
ORDER
[16]
The application is dismissed.
[17]
The applicant shall pay the respondents’ costs on the scale as
between attorney and client.
______________
L.
J. LEKALE, J
On behalf of
applicant: Adv J.S. Rautenbach
Instructed
by:
E
G Cooper Majiedt Inc
BLOEMFONTEIN
On
behalf of respondents: Adv M.C. Louw
Instructed
by:
Hill,
McHardy & Herbst Inc
BLOEMFONTEIN