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
>>
2024
>>
[2024] ZAFSHC 289
|
|
S B Guarantee Company (RF) (Pty) Ltd v Manyoni & Gija Investments CC and Another (790/2024) [2024] ZAFSHC 289 (12 September 2024)
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
Reportable
I
Not
reportable
Case
no.
79012024
In
the matter between:
S
B GUARANTEE COMPANY (RF) (PTY) LTD
Applicant
[Registration
number:
20061021576107]
And
MANYONI
&
GIJA
INVESTMENTS
CC
First
Respondent
[Registration
number:
2009/207718123]
SIBONGISENI
SANELE NYAMBI
Second
Respondent
[Identity
number:
8[…]
Neutral
citation:
SB
Guarantee Company (RF)(PTY) Ltd
v
Manyoni
&
Gija
Investments
CC
And
Another
Coram:
TL
MANYE,
AJ
Heard:
08 MAY 2024
Delivered:
12 SEPTEMBER 2024
Summary:
Execution
-
The
sale in
execution
-
mortgage
immovable property-
Sale of
residential property for recovery of outstanding bond repayments.
ORDER
1.
Judgment
is
granted
in
favour
of
the
Applicant
against
the
First
and Second
Respondent
for
payment of an amount of
R1
895 868.97.
2.
Payment
of
interest
on
the
amount
of
R1 895
686.97
at
the
rate
of
11.750%
per annum
from 24 January 2024 to date of final payment.
3.
The following
immovable property is declared specially executable: A Unit
consisting of-
(a)
Section no. 10
as shown and more fully described on Sectional Plan no. SS 170/2019,
in the scheme known as Stone Creek in respect
of the land and
building or buildings situated at Bloemfontein (Extension 230),
Mangaung Metropolitan Municipality,
of which
section the floor area, according to the said sectional plan is 231
(two hundred and thirty one) 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 ST 182[…],
(c)
An exclusive
use area described as swimming pool S1, measuring 14 (fourteen)
square metres being as such part of the common property,
comprising
the land and the scheme known as Stone Creek
in respect
of the
land and
building
or
buildings
situated
at
Bloemfontein
(Extension 230), Mangaung Metropolitan Municipality as shown and more
fully described on Sectional plan no. SS 170/2019]
held by Notarial
Deed of Cession of Right to Exclusive use SK 776/2019.
4.
That the
Registrar of the Honourable
Court is
authorized
to
issue a Writ of Execution against immovable property.
5.
That
the
Applicant
be
authorized
to
execute
against
the
immovable
property with
such reserve price as set by the Honourable Court.
6.
That
Respondents are ordered to pay the costs of this application on an
attorney and client scale.
JUDGMENT
[1]
The Applicant
instituted this application proceeding against the First and Second
Respondent for the payment of an amount of an
amount of
R1
895 868.97
and
payment of interest on an amount of
R1
895 886.97
at
the rate of
11.750%
per annum
from 24 January 2024 to date of final payment.
[2]
Previous to
the above application the Applicant had initial Application
instituted against the Respondents on the 13
th
February 2024 seeking one payment of an amount of
R1
895 886.97;
payment
of interest on the amount of
R1
895
868.97,
at
the rate of
11.750%
per annum
from 18
t
h
January 2023.
[3]
The
parties
settled
the
application
in
paragraph
2
above
by
way
of
a
settlement
agreement,
which
was
made
an
Order
of
Court
on
the
25
th
January 2023 by the Honourable Acting Judge Boonzaaier.
[4]
The current
application before Court as referenced in paragraph 2 above was
launched on the 25th
April 2024.
The Applicant seek payment in an amount of
R1
895 868.97
together
with an order that a certain immovable property be declared
specially
executable.
[5]
The Applicant
alleges that the Respondents failed and/or neglected to comply with
the settlement agreement entered into between
the parties and also
the Court Order of the 26th
January 2023
which made the settlement agreement an order of Court
.
[6]
In terms of
the settlement agreement the First and Second Respondents had
undertaken to settle the full outstanding balance on each
account
stipulated in paragraphs 4.1 to 4.10.3 of the settlement agreement on
or before the 31st
January 2023.
[7]
Paragraph 4 of
the settlement agreement and its sub-paragraphs provides
inter
alia
that:
"The
debtors hereby acknowledge that they are in default in terms of the
agreements on the accounts mentioned in paragraph
4.1 to 4.10.3 are
subject to and further acknowledge that they are truly and lawfully
jointly and severally indebted and in favour
of the bank as the
principal debtor and sureties/guarantors as follows:
4.1
In
respect of account number
5[…]8:
4.1.1
the
amount of
R194
929.58;
4.1.2
interest
on an amount of
R194
929.58
at
the rate of
18.90%
per
annum compounded daily and capitalized monthly from 25
th
November 2022 to date of final payment, both days inclusive;
4.2
In
respect of account number
3[…]8:
4.2.1
the
amount of
R305
475.51;
4.2.2
interest
on the amount of
R305
475.51
at
the rate of prime plus
8.00%
per
annum compounded
daily
and capitalized monthly from 25
th
October
2022 to
date of final payment, both days inclusive;
4.3
in
respect of account number
0[…]:
4.3.1
the
amount of
R235
895.83:
4.3.2
interest
on the amount of
R235
895.83
at
prime plus
10.50%
per
annum compounded daily and capitalized monthly from 25
th
October 2022 to date of final payment, both days inclusive;
4.4
in
respect of account number
4[…]:
4.4.1
the
amount of
R90
420.57;
4.4.2
interest
on
the
amount
of
R90
420.57
at
the
rate
of
21.00%
per
annum compounded daily and capitalized monthly from 25
th
November 2022 to date of final payment, both days inclusive;
4.5
in
respect of account number
1[…]2:
4.5.1
the
amount of
R2
479 142.21;
4.5.2
interest
on the amount of
R2
479 142.21
at
the rate of prime plus
3.00%
per
annum compounded daily and capitalized monthly from 25
th
November 2022 to
date of final payment,
both
days inclusive;
4.6
in
respect of account number
1[…]5:
4.6.1
the
amount of
R1068069
.
64;
4.6.2
interest
on the amount of
R1
068 069.64
at
the rate of prime plus
1.27%
per
annum compounded daily and
capitalized
monthly
from 2ffh November 2022 to date of final payment,
both
days inclusive;
4.7
in
respect of account number
1[…]4:
4.7.1
the
amount of
R288
104.07;
4.7.2
interest
on the
amount
of
R288
104.07
at
the
rate
of
prime
minus
0.25%
linked
per annum compounded daily and capitalized monthly from 25
th
November 2022 to date of final payment, both days inclusive;
4.8
in
respect of account number
1[…]3:
4.8.1
the
amount of
R351
420.97;
4.8.2
interest
on the amount of
R351
420.97
at
the rate of prime minus
0.25%
per
annum compounded daily and capitalized monthly from 25
t
h
November 2022 to
date of final payment, both days inclusive;
4.9
in
respect
of
account
number
3[…]9;
4.9.1
the
amount of
R660
982.07;
4.9.2
interest
on the amount of
R660
982.07
at
the rate of prime plus
10.00%
per
annum compounded daily and capitalized monthly from 25
th
October 2022 to date of final payment, both days inclusive;
4.10
in
respect
of
account
number
5[…]2;
4.10.1
the
amount of
R2
035 993.30;
4.10.2
interest
on the amount of
R2
035 993.30
at
the rate of prime plus
0.00%
i
.
e
.
10.50%
per
annum from 25
th
November 2022 to date of final payment together with monthly
insurance premium of
R0.00
and
monthly service fee of
R240.00."
[8]
Paragraph
5
outline
the
undertaking
to
pay
and
applicable
terms
and conditions
as set out as
follows:
The
debtors
undertake
to
settle
the
full
outstanding
balance
on
each
account
stipulated in paragraph 4.1 on or before the 31
s
t
January
2023.
[9]
In
paragraph
6
of
the settlement agreement the following is stated:
'Failure
by the debtors to comply with paragraph
5
above:
5.1
the debtors
fail to adhere to paragraph 5 above and failed to rectify the
breach/default after seven (7) days written notice, the
debtors'
consents to the following;
5.2
The
full outstanding balance together with interest thereon as per
paragraph 4.1 to 4.3 above as well as the taxed legal costs will
immediately become due and payable;
5.3
The bank
will be entitled to sell the property registered in the name of
Manyoni
&
Gija
Investments
CC
in terms of
a
power
of attorney annexed hereto as annexure
"SB
11"
described as follows:
A
Unit consisting of-
(a)
Section
no. 10 as shown more fully described on Sectional Plan no. SS
170/2019, in the scheme known as Stone Creek in respect of
the land
and building or buildings situate at Bloemfontein (Extension 230)
Mangaung Metropolitan Municipality, of which Section
the floor
area
according
to the said sectional plan, is 231 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.'
[10]
It
is not in
dispute that the First Respondent was obliged to make payment of
monthly instalments
in terms of a
mortgage bond account with number
5[…]2.
It is
further not in dispute that the First Respondent defaulted on the
obligation to
make monthly
payments.
[11]
On the 13th
December 2022
and 18th
January 2023,
the Applicant and the Respondent entered into a written agreement in
respect of the Respondent's indebtedness to the
Applicant. Almost a
year later the settlement agreement was then made an
Order
of Court
on
the 26th January 2024.
[12]
The
Applicant's case before the court is that the Respondents
have failed or
neglected to rectify the breach of failure to settle account number
5[…]2
in
accordance with the settlement agreement. In terms of the notice of
demand the Respondents were referred to paragraph 6 of the
settlement
agreement that payment of the outstanding amount be made within seven
(7) days failure of which the Applicants will
proceed with the
necessary legal action.
[13]
The Applicant
further argues that the outstanding balance due and payable to the
Applicant is in an amount of
R1
895 868.97
together
with interest on the said sum at the rate of
11.750%
per annum
from 24 January 2024 to date of payment. It is for that reason that
the Applicant is now seeking payment in the said amount
and to
execute against the Respondents' immovable property in terms of Rule
46 as it is primary place of residence of the Second
Respondent.
[14]
In opposition
the Respondents filed the required answering affidavit in which the
following defences are stated in paragraphs
12 to 18:
14.1
'I wish to
just bring to the Court's attention that subsequent to the conclusion
of the settlement agreement, I have made several
payments, settled,
and closed off
a
large
portion of the Standard Bank credit facilities. Those that I have not
able to settle and close off were further deduced into
a
further
settlement agreement with
Standard
Bank which are now
in
the
process of being paid off.
14.2
In respect
of this account, it is indeed true that I have made at least
a
payment
amounting to R200 000.00 odd. This is because that is the amount I
could afford.
14.3
I
am
very well
aware of my obligations to the Applicant.
I
am
equally
cognisant of the obligation that ensued on my part by virtue of the
settlement agreement entered into with the Applicant.
14.4
I must
forthwith state that I am experiencing difficulties financially. I
am
a
businessman
in the engineering sector. I provide services to various clients and
mostly to Municipalities. I have been at least
for the past three (3)
years experiencing
a
difficulty
in receiving payments from
a
majority of
my clients and more specifically from the Municipalities. This has
gone on to the extent that I have had to issue process
against them
in this very Court.
14.5
I further
struggled to get information from Standard Bank in terms of
statements. I strive to try plan to make payment on the various
accounts and when requesting statements from the Applicant to try
plan around the amounts owing the Applicant only provides same
only
after one (1) month which in tum causes further delays on my end.
14.6
Though I
have in some obtained judgment, I
am
still
struggling with most. For those that I have obtained judgment
against, I am in the process of executing
.
14.7
Again,
I understand that this is not
a
defence
not only to my debt
but
also in terms of the settlement agreement. I merely bring these to
the attention of the Court to elucidate that I
am
not
merely sitting and doing nothing. I
am
trying
my level best given the circumstances.
'
[1]
[15]
Notwithstanding
the settlement agreement in which the Respondents undertook to make
payment of full outstanding balance the Respondent
has failed to do
so. In fact, the Applicant submits that the Respondents have not made
any payment in respect of the debt for more
than a year and
accordingly the Applicant is left with no option but to approach the
Court on the grounds of the breach of settlement
agreement made an
order of this Court.
[16]
As
a security for the Respondent's indebtedness, the First Respondent
registered a sectional or continuing covering mortgage bond
with no.
SB
719[…]
in
favour of the Applicant over the immovable property for the sum of
R2
000 024.00
and
the additional sum of
R506
000.00.
[2]
It
is my considered view that the Respondents were well aware that in
terms of the mortgage bond, the Applicant would be entitled
to
institute proceedings for the recovery of all amounts due to the
Applicant and for a Court order declaring the property executable
in
the event of failure to perform obligations or pay any sum which may
be legally claimed by the Applicant. Further, in terms
of the
settlement agreement the Respondents agreed that the Applicant will
be entitled to sell the immovable property. Notwithstanding
all this
knowledge the Respondents still breached the settlement agreement and
the obligations therein.
[17]
It
is important to highlight that the settlement agreement made an order
of Court is still in existence. The Constitution of the
Republic
[3]
calls
upon all parties to obey the Court orders. Section 165(5) directs
that an order for a decision issued by a Court is binding
to all
persons who it applies
.
In
casu
and
in my view, barring an appeal against the Court order, the Court
order incorporating settlement agreement of the 26 January
2023
remains binding on the Respondents. It is common cause that there is
no appeal pending or any other application pending before
any Court
in relation to this matter. This Court was and is not seized with an
appeal or review of the main matter that resulted
in the settlement
agreement and the Court order. Any attempt
in
assessing
or pronouncing on this Court Order will be irrational as the
Respondents have accepted liability to the Applicant.
[18]
In terms of
Rule
46A(2)(a)
a
Court considering an application under this rule must:
"(i)
establish whether the immovable property which the execution creditor
intends to execute against is the primary residence
of the judgment
debtor."
Rule
46A(2)(b)
especially
provides that "a
Court
shall not authorize execution against immovable property which is the
primary residence of
a
judgment
debtor unless the Court, having considered all property is
warranted."
[19]
Rule
46A seeks to protect homeowners ensuring that their homes are not
sold in execution for prices which are not market-related.
The Courts
are called upon to take account of the market value of the property,
making a fair determination of what the fair reserve
price would be.
It is therefore a requirement for an Applicant to have a sworn
independent valuation certificate by a property
evaluator which in
this
instance
the
Applicant has complied with.
[4]
[20]
In this
instance the Court is able to establish the true market-value of the
property as a starting point before an attachment can
be ordered to
the property.
[21]
The
Constitutional Court in
Jaftha
v
Schoeman
[5]
Mokgoro
J found that in a matter where execution is sought against property
which is the primary residence of a judgment debtor
a Court must
consider whether the Rules of the Court have been complied with;
whether there are alternative ways of recovering
the judgment debt;
further take into account, among other things, the circumstances in
which the judgment debt was incurred; attempts
made to pay off the
debt; the financial position of the parties; the amount of judgment
debt; whether the judgment debtor is employed
or has a source of
income to pay off the debt; and other factors relevant to this case.
[22]
The
Respondents deponent's answer
in
casu
is
not satisfactorily in that it has failed to attach any proof of how
much he is currently owed by his Municipality clients
.
In fact, the
Second Respondent
has not made a
case that he is indeed indigent as he has already stated that he is a
businessman doing business with various clients
including
Municipalities. He further failed to indicate how many individuals'
elderly or
minor reside at affected property subject of this case.
[23]
Courts are
enjoined to ensure that the rights of all litigants in such matters
are balanced fairly, especially parties with a direct
interest. It is
of importance that the Court before it makes a determination in such
applications that it has proper knowledge
of how much the bond was
initially and the current outstanding balance therefore from the bond
originator which in this instance
is Standard Bank. As I indicated
previously
this
has
already
been
ascertained
and
considered
to
by
the
Respondents
including market valuation of the immovable property from Light Stone
Scheme Evaluation.
[24]
The
Applicant currently has a real right enforceable against the
Respondents over this property if indeed there is a home loan which
is not in dispute as in this case.
[25]
The underlying principle emphasized here is that the execution
against immovable property which is the primary residence
of the
judgment debtor requires judicial oversight. The aim of which is to
give effect to Section 26 of the Constitution which
is to protect the
right to adequate housing and security of tenure. The need for
judicial oversight in such applications and the
reasons therefore
have been the subject of a number of Court applications in the
Supreme Court of Appeal, Constitutional Court
and individual
divisions of the High Courts.
[26]
The Constitutional
Court in the
matter
Eke
v Parsons
stated as
follows:
"The
effect
of
a
settlement
order is to change the status of rights and obligations between the
parties
.
Save
for litigation that may be consequent upon the nature of the
particular order, the order brings finality to the /is between
the
parties; the /is becomes res judicata (literally,
'a
matter
judged). It changes the terms of
a
settlement
agreement to an enforceable Court order.
The
type of enforcement may be execution or contempt proceedings or it
may take any form permitted by the nature of the order.
"
[6]
[27]
In
Standard
Bank of South Africa Ltd v Pygon Trading Close Corporation
[7]
the
following was stated:
"The
consent order, which embodied the settlement agreement, had to be
enforced if it was not set aside. No application was
launched to
rescind or appeal the consent order. Nor was it abandoned. It was of
full force and effect. As such, the High Court
was not entitled to
ignore it and to enter the terrain of the previous /is between the
parties. The Court had no jurisdiction to
do anything other than give
effect to the consent order. The only additional information required
was whether or not the amount
of R18 million had been paid timeously
or not. That undisputed information was before it. In the
circumstances, it was obliged
to make the final order sought by the
bank."
[28]
In the
premises of the aforesaid it is not in dispute that the parties
concluded
a
settlement agreement and that the agreement was made an order of
Court. Further it is not in dispute that the Respondents did
not
comply with their obligations in terms of the settlement agreement
and therefore breached the Court order. In my view this
Court is
therefore bound by the decisions of the Constitutional Court and the
Supreme Court of Appeal to the extent that a Court
Order which
embodies a settlement agreement has to be enforced if it is breached.
[29]
In the
circumstances the following order is made:
1.
Judgment is
granted in
favour of
the
Applicant
against the
First and
Second Respondent for payment of an amount of
R1
895 868.97.
2.
Payment of
interest on
the
amount of
R1
895
686.97
at
the rate of
11.750%
per
annum from 24 January 2024 to date of final payment.
3.
The following
immovable property is declared specially executable:
A
Unit consisting of -
(d)
Section no. 10
as shown and more fully described on Sectional Plan no. SS 170/2019,
in the scheme known as Stone Creek in respect
of the land and
building or buildings situated at Bloemfontein (Extension 230),
Mangaung Metropolitan Municipality, of which section
the floor area,
according to the said sectional plan is 231 (two hundred and thirty
one) square metres in extent; and
(e)
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 ST 182[…],
(f)
An exclusive
use area described as swimming pool S1, measuring 14 (fourteen)
square metres being as such part of the common property,
comprising
the land and the scheme known as Stone Creek in respect of the land
and building or buildings situated at Bloemfontein
(Extension 230),
Mangaung Metropolitan Municipality as shown and more fully described
on Sectional plan no. SS 170/2019 held by
Notarial Deed of Cession of
Right to Exclusive use SK 776/2019.
4.
That the
Registrar of the Honourable Court is
authorized to
issue a Writ
of Execution against immovable property.
5.
That
the
Applicant
be
authorized
to
execute
against
the
immovable
property with such reserve price as set by the Honourable Court.
6.
That
Respondents are ordered to pay the costs of this application on an
attorney and client scale.
T
L MANYE, AJ
APPEARANCES
For
applicant:
Advocate
J Els
Instructed
by
:
Phatshoane
Henney Attorneys,
35
Markgraaff street,
Westdene,
Bloemfontein.
For
respondents:
Advocate
Z Nyezi
Instructed
by
:
Blair
attorneys
32
1st Avenue,
Westdene,
Bloemfontein.
[1]
Indexed
and
paginated
papers, p. 108, para 12 to para 18
[2]
Indexed
and paginated p. 94,
Sectional
Continuing
Covering
Mortgage bond
[3]
Act
108 Of 1996
[4]
See:
index
and paginated papers, p. 86, annexure
"FA
7"
-
Light
Stone Scheme Valuation
[5]
2005
(2)
SA
140
CC
[6]
2016
(3) SA 37
CC
at
para [31]
[7]
2024
JDR
1232 SCA at para [23]