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 HIG H COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISIO N, CAPE TOWN )
Case number : 1127 /2024
In the matter between :
FIRSTRAND MORTGAGE COMPANY (RF) (PTY ) LTD Plaintiff
and
CHARMAINE PRETORIUS Defendant
JUDGMENT DELIVERED ON 11 MARCH 2025
VAN ZYL AJ :
INTRODUCTION
1. The plaintiff seeks summary judgment against the defendant, as well as an
order in terms of Rule 46A· of the Uniform Rules of Court, declar ing the defendant's
immovable property specially executable so as to settle the judgment debt.
OFFICE OF THE CHIEF JUSTICE
REPUBLIC OF SOUTH AFRICA
2. The plaintiff ’s monetary claim is for the payment of R1 804 608 ,13 pursuant to
monies lent and advanced by Firstrand Bank Lim ited ("the lender ”) to the defendant
under a loan agreement . The plaintiff , in turn, executed a guarantee in favour of the
lender, and an indemnity bond was registered over the defendant’ s immovable
property in favour of the plaintiff as security for the defendant's indebtedness under
an indemnity agreement concluded between the plaintiff and the defendant . The
foreclosure on the defendant's property is sought in terms of the indemnity bond,
because of the defendant’s failure to comply with the terms of the loan agreement.
3. The defendant is the registered owner of the immovable property known as
Section 3 [...] M[...] , 3[...] C[...] Road, Fish Hoek. The property is the defendant’s
primary residence.
THE DEFENCES SET OU T IN THE DEFENDANT’S SPECIAL PLEA, PLEA , AND
ANSWERING AFFIDAVIT S
4. From the defendant's special plea, plea on the merits, and the opposing
affidavit s delivered in the two applications , it appears that the following is not
disputed:
4.1. the conclusion of the loan agreement and the guarantee issued by the
plaintiff in favour of the lender;
4.2. the conclusion of the indemnity agreement between the plaintiff and
defendant , and the registration of the indemnity bond;
4.3. the fact that the defendant defaulted on her payment obligations in
terms of the loan agreement; and
4.4. the fact that the plaintiff sent a notice in terms of s ection 129 of the
National Credit Act 34 of 2005 (“NCA”) to the address “Section 3 [...] M[...] ,
3[...] C[...] Road, Fish Hoek, 7975 ”, which is the domicillium address for the
purposes of the loan agreement.
5. The defendant raise s various defences to the application s. The plaintiff
argues in relation to the summary judgment application that the defendant’s special
plea and plea on the merits fail to set out facts which, if proven at trial, will constitute
bona fide defences to the plaintiff's claim: they fail genuinely to raise issues for t rial.1
These defences are, in brief, the follow ing.
6. The defendant's primary defence (raised by way of special plea) is that the
plaintiff failed to comply with section 129(1) of the NCA because, she argues, the so-
called section 129 notice had been sent to the wrong address. The parties devoted
most of their argument to this defence because , if it is upheld, the proceedings have
to be postponed to allow the plaintiff to remedy the error .2
7. Second , the defendant denies that the deponent to the verifying affidavit in the
summary judgment application has sufficient personal knowledge of the facts .
8. Third , the defendant contends that the plaintiff has not "sufficiently
demonstrated that all conditions precedent for the enforcement of the indemnity
agreement have been me t” or that she has breached the terms of the indemnity
agreement .3
9. Fourth , the defendant disputes the amount claimed by the plaintiff.
10. Fifth, the defendant alleges that she had applied to a debt counsellor to be
placed under debt review , and had advised the plaintiff of this on 29 April 2024 . She
therefore contends that the plaintiff was not entitled to institute these proceedings.
11. Finally , in relation to the Rule 46A application in particular, the defendant
1 See Tumileng Trading CC v National Security and Fire (Pty) Ltd 2020 (6) SA 624 (WCC) at
para [ 12].
2 In terms of section 130(4)(b) of the NCA: “(4) In any proceedings contemplat ed in this section,
if the court determines that … (b) the credit provider has not complied with the relevant
provisions of this Act, as contemplated in subsection (3)(a), … the court must -
(i) adjourn the matter before it; and
(ii) make an appropriate order setting out the st eps the credit provider must complete
before the matter may be resumed; …”
3 This defence is not raised in the plea, but is mentioned in the affidavit opposing the summary
judgment application .
contends that her rights in terms of section 26(1) of the Constitution of the Republic
of South Africa, 1996, would be infringed should her property be declared
executable.
THE APPLICATION FOR SUMMARY JUDGMENT
The applicable legal principles
12. The object of Rule 32 is to prevent a plaintiff’s claim, when based upon certain
causes of action, from being delayed by what amounts to an abuse of the process of
the court. The plaintiff is allowed to apply for judgment to be entered summarily
against the defendant, thus disposing of the matter without putting the plaintiff to the
expense of a trial. The procedure is not intended to shut out a defendant who can
show that there is a triable issue applicable to the claim as a whole from placing his
or her defence before the court .4
13. Rule 32(3)(b) provides that a defendant in summary judgment proceedings
may “ satisfy the court by affidavit …, or with the leave of the court by oral evidence
of such defendant or of any other person who can swear positively to the fact that
the defendant has a bona fide defence to the action; such affidavit or evidence shall
disclose fully the nature and grounds of the defence and the material facts relied
upon t herefor ”.
14. In Breitenbach v Fiat SA (Edms) Bpk5 the Court held as follows in relation to
the defendant’s affidavit:
“… no more is called for than this: that the statement of material facts be
sufficiently full to persuade the Court that what the defendant has alleged, if it
is proved at the trial, will constitute a defence to the plaintiff's claim . What
I would add, however, is that if the defence is aver red 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
4 Majola v Nitro Securitisation 1 (Pty) Ltd 2012 (1) SA 226 (SCA) at 232F –G.
5 1976 (2) SA 226 (T) at 228D -E. Emphasis added.
of bona fides” .
15. The defendant who elects to deliver an affidavit in oppo sition to a summary
judgment application must thus show that they have a bona fide defence to the
action. They must fully disclose the nature and grounds of the defence , and the
material facts relied upon and which they genuinely desire and intend to adduce at
trial. The facts should not be inherently and seriously unconvincing and should, if
true, constitute a valid defence.6
16. A bona fide defence is accordingly one th at is good in law, and that is pleaded
with sufficient particularity.7
17. In considering the now amended Rule 32, the Court in Tumileng Trading CC v
National Security and Fire (Pty) Ltd8 held that:
“… Rule 32(3), which regulates what is required from a d efendant in its
opposing affidavit, has been left substantively unamended in the overhauled
procedure. That means that the test remains what it always was: has the
defendant disclosed a bona fide (ie an apparently genuinely advanced, as
distinct from sham) defence? There is no indication in the amended rule that
the method of determining that has changed. The classical formulations
in Maharaj and Breitenbach v Fiat SA as to what is expected of a defendant
seeking to successfully oppose an application for su mmary judgment,
therefore remain of application. A defendant is not required to show that its
defence is likely to prevail. If a defendant can show that it has a legally
cognisable defence on the face of it, and that the defence is genuine or bona
fide, su mmary judgment must be refused. The defendant's prospects of
success are irrelevant ”.
18. The word “may” in Rule 32(5) confers a discretion on the Court, so that even if
the defendant’s affidavit does not measure up fully to the requirements of subrule
6 See Breitenbach supra at 227G -228B; Standard Bank of South Africa v Friedman 1999 (2)
SA 456 (C) at 461I -462G.
7 Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A) at 426C -D.
8 Supra at para [13]. Emphasis added.
(3)(b), the Court may nevertheless refuse to grant summary judgment if it thinks fit .9
The d iscretion is not to be exercised capriciously, so as to deprive a plaintiff of
summary judgment when he or she ought to have such relief.10
19. If it is reasonably possible that the plaintiff’s application is defective or that the
defendant has a good defenc e, the issue must be decided in favour of the
defendant.11 If, on the material before it, the Court sees a reasonable possibility that
an injustice may be done if summary judgment is granted, that is a sufficient basis on
which to exercise its discretion i n favour of the defendant.12
20. The defences raises by the defendant are considered against this
background. The defendant’s primary defence will be dealt with first, and the rest of
the defe nces will be considered thereafter.
The de fences raised
The p laintiff's compliance with section 129 of the NCA
21. As indicated, t he defendant's primary defence is that the plaintiff failed to
comply with section 129(1) of the NCA by failing to send the section 129 notice to the
correct address. As a result, she did n ot receive the notice prior to the institution of
the action. This defence has three legs :
21.1. First, t he defendant contends that the notice was sent to her outdated
work email address, despite her having “updated ” her email address in April
2023 .
21.2. Second, the defendant avers that in March 2023 she sent an email to
the plaintiff notifying it of her change of physical address .
21.3. Third, the defendant states that on 23 June 2023 and 3 November
9 First National Bank of South Africa Ltd v Myburgh 2002 (4) SA 176 (C) at 180D –E.
10 Jill v Firstrand Bank Ltd 2015 (3) SA 586 (SCA) at 591B.
11 Arend v Astra Furnishers (Pty) Ltd 1974 (1) SA 298 (C) at 305C -F.
12 First National Bank of South Africa Ltd v Myburgh supra at 184H.
r 2023, she submitted a Distressed Debt Application to the plaintiff (an
application for the renegotiation of her payment terms) , in which she updated
her domici lium address.
22. Notably, the domici lium address set out in the loan agreement, and thus used
for the purposes of the section 129 notice , is the same address t hat the defendant
claims she had notified the plaintiff of as her new address . In the loan agreement,
read with t he defendant’s declaration entitled “ Confirmation of my details, post
registration ”, the defendant chose the following address as her domic ilium address:
“Section 3 [...] M[...] , 3[...] C[...] Road, Fish Hoek Western Cape, 7975 ”.
23. This is the physical address of the mortgaged property to which the section
129 notice was sent in October 2024. It is also the address used by the Sheriff to
serve the summons during January 2024 .13 It is where the defendant’s resides.
24. The defendant states that she updated her address to the “correct address ”,
namely "Door 1" instead of "Section 36." In other words, the defendant states that
she changed the description of the physical address by referring to her door number
instead of the relevant section number (the property forms part of a sectional title
scheme).
25. The fact remains that these descriptions refer to the same address, namely
that of the mortgaged property. In fact, in the valuation report submitted by the
plaintiff in support of the Rule 46A application, the address of the mortgaged property
is listed as "Door 1 / section 36."
26. As stated at the outset of this discussion, the defendant argues that the
section 129 notice was sent to her outdated work email address, despite her having
“updated” her email address in April 2023. This may be so, but the plaintiff ’s
compliance with section 129 of the NCA is not dependent on the delivery of the
notice to the defendant's email address . Rather, t he notice must be delivered to a
physical address - her chosen domicilium address . This may be done by way of pre -
13 The defendant’s father, who lives with her, accepted service of the summons on the
defendant’s behalf.
paid registered mail in terms of section 129(5)(a) .
27. In Kubyana v Standard Bank of South Africa Ltd14 the Constitutional Court
held that a credit provider has no positive duty to ensure that the section 129 notice
in fact reaches the consumer:
“[31] … First, there is no general requirement that the notice be brought to the
consumer's subjective attention by the credit provider , or that personal service
on the consumer is necessary for valid delivery under the Act. … Thus, while
the s 129 obligation on the credit provider is to ' draw the default to the notice
of the consumer in writing', this obligation is discharged, in the words of s
65(2), by '[making] the document available to the consumer'. This accords
with s 130(1)(b)(i), which provides that a credit provider may seek to en force
its rights if a consumer has not responded to a s 129 notice. While a credit
provider must take certain steps to ensure that a consumer is adequately
informed of her rights, such a credit provider cannot be non -suited or
hamstrung if the consumer unr easonably fails to engage with or make use of
the information provided. In other words, it is the use of an acceptable mode
of delivery — the taking of certain steps to apprise the consumer of the notice
— which the statute requires of the credit provider, not the bringing of the
contents of the s 129 notice to the consumer's subjective attention .
[32] Second, one of the acceptable modes of delivery is by means of the
postal service:
'(W)here the notice is posted, mere despatch is not enough. This is becaus e
the risk of non -delivery by ordinary mail is too great. Registered mail is in my
view essential. . . . But the mishap that afflicted the Sebolas' notice shows that
proof of registered despatch by itself is not enough. The statute requires the
credit prov ider to take reasonable measures to bring the notice to the attention
of the consumer . . . . This will ordinarily mean that the credit provider must
provide proof that the notice was delivered to the correct post office .'
When a consumer has elected to receive notices by way of post, the credit
14 2014 (3) SA 56 (CC) at paras [21] -[33].
provider's obligation to deliver thus ordinarily consists of (a) respecting the
consumer's election; (b) undertaking the additional expense of sending
notices by way of registered ra ther than ordinary mail; and (c) ensuring that
any notice is sent to the correct branch of the Post Office for the consumer's
collection.
[33] Third, the steps that a credit provider must take in order to effect delivery
are those that would bring the s 12 9 notice to the attention of a reasonable
consumer. …. As the court explained in Sebola, for there to have been
delivery under the Act it must be the case that 'it may reasonably be assumed
. . . that notification of [the] arrival [of the section 129 noti ce at the Post Office]
reached the consumer and that a reasonable consumer would have ensured
retrieval of the item '.”
28. Regarding her second contention, namely that in March 2023 she had sent an
email to the plaintiff notifying it of her change of physical address, the defendant has
been unable to provide any such written notification demonstrating compliance with
the formalities stipulated in the loan agreement and the indemnity agreement, both of
which require the defendant to give the plaintiff ten days' written notice of any
change to her domicilium address. Both agreements contain non -variation clauses.
There is no evidence on record to support the defendant’s contention that she had
formally changed her address in terms of these agreements at any time before 2 9
October 2023, when the section 129 letter was sent . It must be remembered, too,
that her physical address never actually changed – she merely wished to change the
description of her ad dress from “ Section 36 ” to “Door 1 ”
29. The defendant's third contentio n is that on 23 June 2023 and again on 3
November 2023, she submitted Distressed Debt Applications to the plaintiff, in which
she indicated her “correct” address . The Distressed Debt Application she submitted
on 13 November 2023 unfortunately does not support the defendant’s case , as the
plaintiff had delivered the section 129 notice before that date, on 29 October 2023.
30. Her reliance on the Distressed Debt Applicatio n submitted on 23 June 2023 is
equally un helpful, as th at application d id not constitute a written notice of change of
her domicilium address as required by the relevant clauses of the loan agreement
and the indemnity agreement, respectively . The Distress ed Debt Applications were
private, internal mechanisms for the purposes of resolving the difficulties that the
defendant was experiencing in complying with her obligations under the loan
agreement. They were, effectively, part of settlement negotiations b etween the
parties, and were clearly not intended as notification of a change of domicilium .
There was nothing in either of the applications to warn the plaintiff that the defendant
intended to change her formally recorded domicilium by means of those applications.
The defendant simply gives her address, where required, as “ M[...] No. [...], 3[...]
C[...] Road, Fish Hoek ” on the relevant application form.
31. The Constitutional Court in Kubyana15 held:
“[35] If the credit provider complies with the requirements set out in [31] – [33]
above and receives no response from the consumer within the period
designated by the Act, I fail to see what more can be expected of it. Certainly,
the Act imposes no further hurdles and the credit provider is entitled t o enforce
its rights under the credit agreement. ….
[36] As set out earlier, even if the s 129 notice has been dispatched by
registered mail and the Post Office has delivered the notification to the
consumer's designated address, valid delivery will not t ake place if the notice
would nevertheless not have come to the attention of a reasonabl e
consumer. But if the credit provider has complied with the requirements set
out above, it will be up to the consumer to show that the notice did not come
to her attention and the reasons why it did not .”
32. The plaintiff in the present matter sent the section 129 notice to the
defendant’s domicilium address, which she expressly confirmed during the loan
agreement and mortgage registration process. There is no evide nce supporting her
allegation that she had formally changed her domicilium prior to October 2023. It is
common cause on the papers that the section 129 notice reached the appropriate
15 Supra at paras [35] -[36]. Emphasis added.
post office, being the Fish Hoek Post Office. In terms of section 129(7 ) of the NCA,
proof of delivery of the section 129 notice is satisfied by written confirmation from the
postal service that the item was delivered to the relevant post office.16 The content
of the track -and-trace report on record evidences delivery in the present matter. It is
clearly indicated as “ In Delivery Office ”.
33. I have sympathy with the defendant’s frustration when she states that she has
attempted to negotiate with the plaintiff on numerous occasions to no avail, that she
has had extensive email communications with the plaintiff, and that she feels that the
plaintiff acted unfairly in nevertheless instituting these proceedings. Counsel for the
plaintiff is, however, correct in submitting that sympathy for the defendant should not
prevent compliance with and enforcement of the defendant’s contractual obligations.
This present matter is not one which allows for interference in the parties’ contractual
relationship on the basis of public policy approach.
34. In all of these circumstanc es, I am satisfied that the plaintiff has established
delivery of the section 129 notice as required by section 129(7) of the NCA.
The d eponent's ability to depose to the verifying affidavit
35. Rule 32(2) requires that the person deposing to the affidavit delivered in
support of a summary judgment application "can swear positively to the facts".
36. The question whether the deponent has the necessary personal knowledge to
"swear positively to the facts" as required by Rule 32 enjoyed pertinent atten tion in
the judgments in Rees and another v Investec Bank Limited17 and Stamford Sales
and Distributions (Pty) Ltd v Metrac lark (Pty) Ltd .18 In both matters, the deponent to
the verifying affidavit stated that he or she had acquired personal knowledge of the
necessary facts by means of relevant documents under his or her control. It was
16 “(7) Proof of delivery contemplated in subsection (5) is satisfied by -
(a) written confirmation by the postal service or its authorised agent, of delivery
to the relevant post office or postal agency; or
(b) the signature or identifying mark of the recipient contemplated in subsection
(5) (b).”
17 2014 (4) SA 220 (SCA) at para s [5]-[15].
18 [2014 ] ZASCA 79 (29 May 2014) at para s [8]-[15].
held in both matters that the affidavit in question compl ied with the requirements of
Rule 32(2).
37. In Stamford Sales19 the Supreme Court of Appeal summarized the legal
position as follows
“[10] … ‘As stated in Maharaj, “undue formalism in procedural matters is
always to be eschewed” and must give way to commercial pragmatism. At the
end of the day, whether or not to gra nt summary judgment is a fact-based
enquiry. Many summary judgment applications are brought by financial
institutions and large corporations. First -hand knowledge of every fact cannot
and should not be required of the official who deposes to the affidavit on
behalf of such financial institutions and large corporations. To insist on first -
hand knowledge is not consistent with the principles espoused in Maharaj ….’
In my view, as long as there is direct knowledge of the material facts
underlying the cause of action, which may be gained by a person who has
possession of all of the documentation, that is sufficient.
[11] The enquiry, which is fact -based, considers the contents of the verify ing
affidavit together with the other documents properly before the court. The
object is to decide whether the positive affirmation of the facts forming the
basis for the cause of action, by the deponent to the verifying affidavit, is
sufficiently reliable to justify the grant of summary judgment ….
[12] … To insist on personal knowledge by the deponent to the verifying
affidavit on behalf of the cessionary of all of the material facts of the claim of
the cedent against the debtor, emphasises formalism in p rocedural matters at
the expense of commercial pragmatism .”
38. In the present case, the verifying affidavit deposed to by Mr Roy Gomes on
the plaintiff’s behalf explains that he has personal knowledge of the matter because
of his access to the relevant records of the plaintiff . The records are under his
19 Supra at paras [10] -[12].
control , and he has inspected them . Mr Gomes is employed as manager in the
plaintiff ’s Home and Structured Len ding Department.
39. The defendant does not dispute Mr Gomes' a llegations concerning his
position and employment with the plaintiff, or his control over the plaintiff ’s records
relating to the action . She also does not contest any of the allegations in the
verifying affidavit regarding the nature of the information recorded and stored in the
plaintiff ’s records, to which Mr Gomes, as an employee of the plaintiff, had access.
40. In Trustees for the time being of Delsheray Trust and others v Absa Bank
Limited20 this Division confirmed that the deponent to the plaintiff’s verifying affidavit
may acquire his or her personal knowledge solely from the plaintiff's computer -
generated information :
“[52] We revert finally to the judgment of Corbett JA in the Maharaj case. We
believe that our approach herein is not inconsistent with the principles applied
in that judgment. Corbett JA accepted, for pragmatic reasons, that the
manager of the branch of th e respondent bank who deposed to the verifying
affidavit could not have been expected to have personal knowledge of every
entry in the client’s statement of account. He ‘must needs rely upon the bank
records which show the amounts paid into his account and the amounts
withdrawn by the client’. ….
[53] The technological environment was in any event very different from what
it is today. The Maharaj judgment was delivered in 1975, before the advent of
the information revolution referred to above ….
[54] It may also be noted in this regard that the terms ‘personal’ and ‘direct’
which appear in the passage at 423BC in the Maharaj judgment … do not
appear in Rule 32(2). In terms of that rule the deponent is only required to
‘swear positively’ to the facts in questi on. Mr Pillay would have been
authorised to have access to respondent’s computer records and he would
20 [2014] 4 All SA 748 (WCC) at paras [52] -[55]. Emphasis added.
have been qualified to understand and interpret them. He would therefore
have been in a position to depose to a verifying affidavit that complied with
Rule 32(2) .
[55] We are accordingly of the view that the computer generated information
of first appellant’s financial standing with respondent that was available to Mr
Pillay, was sufficient to allow him to depose to a valid and adequate verifying
affidavit ….”
41. In the premise s, given this precedent, the defendant's objection in relation to
the verifying affidavit does not disclose a bona fide defence.
The p laintiff's compliance with the terms of the indemnity agreement
42. In the affidavit opposing summary judgment, t he defendant argues that the
plaintiff has not demonstrated compliance with the “conditions precedent ” of the
indemnity agreement, and has not proved that the defendant has breached its terms.
43. These defences were not raised in the defen dant's plea. They can therefore
not be considered as bona fide defences for the purposes of resisting the summary
judgment application .21
“[14] … in my view, a defendant cannot for the first time raise defences in its
affidavit opposing summary judgment, where no such defences exist in its
plea. In the new summary judgment formulation, rule 32(2)(b) sets out inter
alia that a plaintiff must ‘explain briefly why the defence ‘ as pleaded’ does not
raise any issue for trial.’ (own emphasis). This pre supposes, that in the normal
acceptable course of pleadings – and which are presumably non -excipiable –
the matter would be adjudicated on the defendant’s pleaded defence. This, in
my mind, was perhaps one of the reasons that the requirement of the plea
was introduced before summary judgment could be applied for, so that by the
time that a defendant filed its opposing affidavit, that he would be committed
21 See AHMR Hospitality (Pty) Ltd t /a Ba kenhof Wine lands Venue v Da Silva 2024 (3) SA 100
(WCC) at para [14]. Emphasis added.
to the version expressed in his plea, as opposed to a situation where a
defence as contained in the aff idavit is materially divergent from that which
was contained in its plea. As an aside, a defendant is in any event required to
set out a defence with reasonable clarity and when the defence raised in the
affidavit resisting summary judgment is inconsistent with the plea, it cannot in
the absence of an explanation for the inconsistency be said to be bona fide .”
44. The indemnity agreement does in any event not contain any suspensive
conditions or “conditions precedent” . That agreement stipulates that the defendant
undertakes to pay the plaintiff the amount for which she is liable to the lender upon
receipt of a written demand. Such written demand is attached as an annexure to the
plaintiff’s particulars of claim. It is commo n cause that the defendant has failed to
comply with the letter of demand.
45. This defence thus also fails to raise a bona fide defence.
The d ispute d claim amount
46. The loan agreement provides that a certificate of balance (“COB") will serve
as prima facie proof of the balance owing , plus the applicable interest rate. The COB
in the present matter is attached as an annexure to the particulars of claim, and
certifies th e amount owing as at 29 October 2023.
47. In her opposing affidavit, the defendant relies on a bank statement dated 9
March 2024, alleging that legal fees exceeding R10 000,00 have been added to her
account. However, all the legal fees referred to by the defe ndant were incurred after
the date of the COB , and such fees are thus not included in the amount reflected on
the COB .
48. This defence therefore has no merit.
The d efendant's application for debt review
49. The defendant alleges that on 29 April 2024, the lender was notified that she
had applied to be placed under debt review.
50. The defendant's application for debt review was , however, made after 10
business days had elapsed following the delivery of the section 129 notice , which
had occurred in October 2023 . The loan agreement that is the subject of the
plaintiff's claim is therefore automatically excluded from such debt review applica tion,
even if her application was successful. This is in terms of section 86(1), read with
subsection (2), of the NCA , which provides as follows:
“(1) A consumer may apply to a debt counsellor in the prescribed manner and
form to have the consumer declar ed over -indebted.
(2) An application in terms of this section may not be made in respect of, and
does not apply to, a particular credit agreement if, at the time of that
application, the credit provider under that credit agreement has proceeded to
take the steps contemplated in section 130 to enforce that agreement. ”
51. In the present matter, the plaintiff had already instituted action by the time the
defendant applied for debt relief. Whilst the defendant had previously sought an
internal rearrangement of her agreement with the lender by way of the Distressed
Debt Applications to which reference has been made , those requests - effectively
seeking to renegotiate the terms of the loan agreement - did not qualify as
applications for debt review as contemplate d by the NCA. The fact that such
requests were made therefore did not bar the plaintiff from instituting these
proceedings.
52. In the premise s, this defence does not qualify as a bona fide defence.
Infringement upon the defendant's rights in terms of section 26(1) of the
Constitution
53. The defendant states that her rights under section 26(1) of the Constitution
would be infringed if the property is declared executable. She does not, however,
provide evidence to justify why the property should not be declared executable.
These aspects are discussed below in relation to the plaintiff’s application in terms of
Rule 46A.
Conclusion on the summary judgment application
54. In the premise s, the plaintiff has made out a proper case for summary
judgment to be granted against the defendant.
THE APPLICATION IN TERMS OF RULE 46A
The general principles
55. An application in terms of Rule 46A comprises of two parts . The Court must
consider whether a case is made out for an order declaring the immovable property
in question executable in terms of Rule 46A(2) . If so, the Court must consider
whether a reserve pri ce should be set in terms of Rule 46A(9) .
56. Section 26(1) of the Constitution provides that everyone has the right to have
access to adequate housing. The Constitution requires judicial oversight over orders
of execution made against immovable property which is the primary residence of the
judgment debtor.22 This is the case in the present matter.
57. Rule 46A provides for the process to be followed to give effect to the
requirement of judicial oversight whenever an execution creditor seeks to execute
against the residential immovable property of a judgment debtor.23 Rule 46A(2)(a)
and (b) provide as follows :
“(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;
and
22 See Jaftha v Schoeman and o thers 2005 (2) SA 140 (CC) .
23 See, generally, Standard Bank of South Africa Ltd v Hendricks and another and related cases
2019 (2) SA 620 (WCC) .
(ii) consider alternative means by the judgment debtor of satisfying the
judgment debt, other than execution against the judgment debtor’s primary
residence.
(b) A cou rt shall not authorise execution against immovable property which
is the primary residence of a judgment debtor unless the court, having
considered all relevant factors, considers that execution against such property
is warranted. ”
58. The approach to be adop ted by the Court in exer cising its judicial oversight in
the context of section 26(1) of the Constitution is similar to any other constitutiona l
analysis under the Bill of Rights. It entails a two -stage approach, which was
explained as follows in Standard Bank of South Africa Ltd v Saunderson and
others :24
"... A plaintiff is called to justify an infringement of a constitutionally protected
right only once it has been established that infringement has in fact occurred.
As pointed out by Stewart Woolman in Chaska/son et al Constitut ional Law of
South Africa at 12 -2:
'Constitutional analysis under the Bill of Rights takes place in two stages .
First, the applicant is required to demonstrate that her ability to exercise a
fundamental right has been i nfringed .. . . If the court finds that the law [or
measure] in question infringes the exercise of the fundamental right , the
analysis may move to its second stage . In this second stage ... the party
looking to uphold the restriction ... will be required to demonstrate that the
infringement is justifiable .' "
59. The Constitutional Court in Gundwana v Steko Development and others25
provided the following context against which the possibility of execution against
residential immovable property may be considered :
"It must be accepted that execution in itself is not an odious thing. It is part
and parcel of normal economic life . It is only when there is disproportionality
24 2006 (2) SA 264 (SCA) at para [20].
25 2011 (3) SA 608 (CC) at para [54].
between the means used in the execution process to exact payment of the
judgement debt , compared to other available means to attain the same
purpose , that alarm bells should start ringing . If there are no o ther
proportionate means to attain the same end , execution may not be avoided. "
60. In ABSA Bank Ltd v Petersen26 the Court restated the correct approach to be
followed when considering applications under Rule 46A :
"The proper approach would have been to give effect to the provisions of the
mortgage bond unless something about the case , whether based on
information apparent on the summons or provided by the defendant , made it
appear inappropriate to do so. The right to housing is not an absolute right ;
and it is a right to adequate housing, not to housing that a mortgagor is unable
to afford . In the context of hypothecation, the defendant -mortgagor's right to
ownership of his or her home must, in general, yield to th e mortgagee's right
to realise its security. It is only when the exercise of the mortgagee's right is in
bad faith that effect should not be given to the right . An indication of bad faith
would be provided if the mortgagee seeks to proceed with execution a gainst
the defendant's home when it is evident th at the judgment debt can probably
be satisfied in a reasonable manner, without involving the drastic
consequences of the loss of the mortgaged home . This much has been
acknowledged in various ways in a number of cases .. . ."
61. The test at execution stage differs from the test to be applied when the court
considers the eviction of occupants. At execution stage, the question is whether
there are alternative proportionate means available to the defendant to settle the
indebtedness rather than execution against her home. At eviction stage, the enquiry
is whether an eviction order is just and equitable, which includes the question of the
availability of alternative accommodation.27
The defendant’s circumstances
26 2013 (1) SA 481 (WCC) at para [33]. Emphasis added.
27 City of Johannesburg v Changing Tides 74 (Pty) Ltd 2012 (6) SA 294 (SCA) at paras [12],
[18], and [25].
62. In her answering affidavit in the application under Rule 46A the defendant
reiterates her defences against the summary judgment application. I have already
found that those defences do not constitute bona fide defences capable of resisting
the grant of su mmary judgment.
63. The defendant raises the following additional defences , namely :
63.1. that her debt review application constitutes a reasonable alternative to
execution against her property ;
63.2. that a sale in execution would cause undue hardship to her and her
parents , thereby infringing their section 26 rights ; and
63.3. she disputes the plaintiff ’s asse ssed market value of the property .
Debt review as a reasonable alternative
64. The defendant state s that she applied for debt review after the institution of
the action, and that s he has been making monthly payments in line with the debt
counsellor's rearrangement proposal. As the plaintiff has been accepting these
payments, the defendant argues that the plaintiff has agreed to the re arrangement
proposal.
65. She argues further that the proposed debt rearrangement would result in full
settlement of the outstanding debt by 7 February 2040, which is earlier than the 22 -
year repayment period agreed to in the loan agreement. She contends, th erefore,
that this proposed rearrangement constitutes an reasonable alternative means of
satisfying the debt as contemplated by Rule 46A(2)(a)(ii).
66. The main problem with the defendant’s submission is that the loan agreement
forming the subject of this action is excluded from the defendant's debt review. This
is because her debt review application was made only after legal proceedings had
been instituted . In terms of section 86(2) of the NCA , a defendant is prohibited from
initiating debt review proceedings for a loan agreement after legal proceedings
related to that agreement have already commenced. I have made reference to this
issue earlier in this judgment. The plaintiff has therefore informed the defendant's
debt counsellor that the debt review proposal could not be accepted because the
account was already subject to litigation .
67. I do not agree with the defendant’s contention that the plaintiff’s acceptance of
the reduced monthly instalments amounts to acceptance of the proposed debt
rearrangement . The defendant is always entitled to make payments into her
account, but such payments do not constitute compliance with the loan agreement
unless they meet the terms agreed upon between the parties .
68. The debt counsellor 's proposed repayment plan is, moreover, inherently
unenforceable , because it provides for fixed interest rates on all listed credit
agreements , including the present loan agreement. This contradicts the
contractually agreed variable interest rate as stipulated in the loan agreement , which
is linked to the prime lending rate . A magistrate has no authority under sections
86(7)(c)(ii) and 87 of the NCA to alter the agreed interest rate. Any such order would
be ultra vires the NCA :28
“[43] Apart from this, the magistrate also ordered that the first respondent's
contractual obligations to pay interest on the outstanding balance of the loan
be reduced from the fixed 17,5% to 0%.
[44] Section 86(7)(c)(ii) confers no such power upon the magistrates' court. A
debt-rearrangement order has as its purpose the rescheduling or
rearrangement of the obligations of the consumer in such a manner as to
enable the consumer to meet his/her/its obligations to the credit provider. It
serves to mitigate the effect of overin debtedness by making provision for
payments within the existing means of the consumer and over an extended
period. A rearrangement order does not, and cannot, extinguish the underlying
contractual obligations. This much is plain from the wording of s 86(7) . The
28 Nedbank Limited v Norris and others 2006 (3) SA 568 (ECP) at para s [43] - [44]. Emphasis
added.
order reducing the first respondent's contractual obligation to pay interest on
the outstanding balance of the loan is therefore ultra vires the NCA ….”
69. Consequently , the proposed debt rearrangement cannot result in a legally
valid rearrangement ord er insofar as the loan agreement in issue in the present
matter is concerned .
70. It follows that the defendant's debt review application does not constitute a
viable alternative to execution as contemplated by Rule 46A(2)(a)(ii).
71. The defendant is currently making monthly payments of R14,622.88 , whereas
the required instalment is R17,568.83 , resulting in the continued accumulation of
monthly arrears . She is making these payments diligently, which is commendable ,
and it is clear that she is not seeking to shirk her responsibilities towards the plaintiff.
The arrears however already amount to R120 926,54 as at 20 May 2024, which
means that the defendant is almost 7 months in arrears . She has no means with
which to s ettle t he arrears and maintain her monthly instalments .
72. The defend ant, whose troubles started when she lost her employment, is
currently involved in proceedings before the Commission for Conciliation, Mediation
and Arbitration. She is hopeful that those proceedings will be finalized within the
next six months, and that she would thereafter be in a position to settle the arrear
amount owing to the plai ntiff. I shall take these circumstances into account in
formulating an appropriate order.
The s etting of a reserve price
73. The defendant disputes the plaintiff's market valuation of the property , which is
to the value of R1 950 000,00. She alleges that the property 's market value is closer
to its insured value of R2 569 776 ,03.
74. The market value of the property is only relevant for the purpose of setting
the reserve price under Rule 46A(9) . The plaintiff has included a valuation report as
part of its papers, from which the value that it relies upon is evident. I agree with the
submission made by the plaintiff’s counsel that such valuation report should be
preferred over the defendant's mere assertion that the insured value is a m ore
accurate reflection of the market value of her property .
75. In Hendricks29 this Division shared the approach taken in Absa Bank Ltd v
Mokebe and related cases ,30 namely that the benefits of setting a reserve price in
most instances outweigh any prejudice which may arise in doing so. It is only in
exceptional circumstances that the court should exercise its discretion against
setting a reserve price .
76. In considering whether to set a reserve price, and what such reserve price
should be, the Court must take into account the factors set out in Rule 46A(9) :
“(b) In deciding whether to set a reserve price and the amount at which the
reserve is to be set, the court shall take into account —
(i) the market value of the immovable property;
(ii) the amounts owing as rates or levies;
(iii) the amounts owing on registered mortgage bonds;
(iv) any equity which may be realised between the reserve price and the
market value of the property;
(v) reduction of the judgment debtor’s indebtedness on the judgment debt
and as contemplated in subrule (5)(a) to (e), whether or not equity may be
found in the immovable property, as referred to in subparagraph (iv);
(vi) whether the immovable property is occupied , the persons occupying
the property and the circumstances of such occupation;
(vii) the likelihood of the reserve price not being realised and the likelihood
of the immovable property not being sold;
(viii) any prejudice which any party may suffer if the reserve price is not
achieved; and
(ix) any other factor which in the opinion of the court is necessary for the
protection of the interests of the execution creditor and the judgment debtor. ”
29 Supra at para s [57] -[63].
30 2018 (6) SA 492 (GJ).
77. The plaintiff proposes the following formula for calculating the suggested
reserv e price : take the average31 of the municipal valuation32 and the market
valuation33 of the property, then deduct 30% from the average to determine the
forced sale value of the property. The outstanding rates , taxes34 and levies35 should
then be subtracted from the forced sale value to arrive at the final reserve price.
78. The above form ula was applied to calculate the plainti ff’s suggested reserve
price of R1 333 176,48 at the time when the Rile 46A application was instituted . The
defendant’s arrears have since increased , and the outstanding rates, taxes and
levies fluctuate, but o n the available evidence I have no quibble with this method. It
seems to me that a rounded -off reserve price of R1 334 000,00 is reasonable in the
circumstances.
Alleged violation of section 26 rights
79. The defendant’s elderly parents reside with her in the property. Her mother is
wheelchair -bound, and the defendant has effected extensive renovations to the
property to accommodate this difficulty. The defendant has , howeve r, not provided
any factual basis to support her assertion that the execution of the property would
infringe her section 26 Constitutional rights.
80. The Constitutional Court has clarified that judicial oversight in execution
matters serves only to ensure compliance with section 26(1) of the Constitution ,
specifically to prevent homelessness :36
“[56] The Court having regard to the effect of section 66(1)(a) on the right to
adequate housing held:
“The importance of access to adequate housing and its link to the inherent
dignity of a person has been well emphasised by this Court. In the present
31 R1 929 500,00.
32 R1 909 000,00.
33 R1 950 000,00.
34 R15 433,39.
35 R2 040,13.
36 See the discussion in Bestbier and others v Nedbank Ltd 2024 (4) SA 331 (CC) at paras [56] -
[64].
matter access to adequate housing already exists. Relative to homelessness,
to have a home one calls one ’s own, even under the most basic
circumstances, can be a most empowering and dignifying human experience.
The impugned provisions have the potential of undermining that
experience. … The provisions take indigent people who have already
benefited from hou sing subsidies and, worse than placing them at the back of
the queue to benefit again from such subsidies in the future, put them in a
position where they might never again acquire such assistance, without which
they may be rendered homeless and never able to restore the conditions for
human dignity. Section 66(1)(a) is therefore a severe limitation of an
important right.”
[57] It is clear that the concern of this Court was the deprivation of the poor of
their homes. This led the Court to the conclusion that judicial oversight is
required when seeking a writ of execution on residential immovable property
in order to protect the section 26 right to adequate housing .”37
81. The defendant has not claimed that she and her parents would be rendered
homeless in the event of execution, or that she lacks access to alternative housing .
On the contrary, g iven that the defendant can afford monthly payments of
R14 622,88 in respect of her current loan agreement , she evidently has the means to
secure alternative accommodation.
82. I acknowledge the fact that the defendant has renovated the property to
accommodate her elderly parents, and that it will probably be difficult for her and her
parents to adjust to a new environment. The fact that a judgment debtor may
experience hardship due to execution of their primary reside nce does however not
automatically amount to a violation of their section 26 rights . The core question
remain s whether execution will result in homelessness . Such a result is not
evidenced on the papers , even though the defendant’s situation is without a doubt
unfortunate.
37 Bestbier supra at paras [56] -[57].
Conclusion on the Rule 46A application
83. In all of these circumstances, I am of the view that an order declaring the
defendant's property specially executable, as provided for in the indemnity bond, is
justified.
Costs
84. There is no reason why costs should not follow the result. The indemnity
agreement provides for costs to be taxed on the attorney and client scale.
Order
In the circumstances, I grant the following orders :
85. Summary judgment is granted in favour of the plaintiff against the defendant,
for:
85.1. Payment of the sum of R1 804 608,13.
85.2. Interest on R1 804 608,13, calculated daily and compounded
monthly from 01 October 2023 to date of final payment, both days inclusive,
at a variable rate which is linked to the plaintiff's mortgage bond base rate,
which variable interest rate was 11.33%, nominal per annum as at the date of
the certificate of balance.
86. The immovable property situated at SECTION 3 [...] & 2[...] M[...] , held by
virtue of Deed of Transfer No. ST23614/2021, is declared specially executable for
payment of the sum referred to in paragraph 85.1 above .
87. The Registrar of this Court is directed immediately to issue a warrant of
execution to enable the Sheriff to attach and execute upon the immovable property
descr ibed above, in satisfaction of the judgment debt, interest and costs.
88. No sale in execution pursuant to this order shall take place on a date earlier
than 6 months from date of this order .
89. In terms of s 129(3) of the National Credit Act 34 of 2005 the defendant may,
at any time prior to the sale in execution of the property, reinstate the credit
agreement by paying to the plaintiff all amounts that are overdue (i.e. , in arrears),
together wit h the plaintiff’s permitted default charges and reasonable costs of
enforcing the agreement up to the time of reinstatement, which amounts, charges
and costs the plaintiff must on enquiry from the defendants furnish to her .
90. If the credit agreement is rein stated by payment as contemplated in paragraph
89, the immovable property may not be sold in execution .
91. The immovable property shall be sold subject to a reserve price of R1 334
000,00.
92. The plaintiff shall be entitled to approach this Court on the same papers (duly
supplemented) for a variation of the reserve price if a change in the factors
influencing the reserve price necessitates a change of the reserve price. The
application may be brought before any Judge in this Division.
93. The def endant shall pay the costs of these proceedings on the scale as
between attorney and client .
____________________
P. S. VAN ZYL
Acting judge of the High Court
Appearances:
For the applicant : Mr W. Jonker , instructed by Minde Schapiro & Smith
The respondent in person