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[2015] ZAWCHC 15
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Firstrand bank Limited v Libuke and Another (22109/2009) [2015] ZAWCHC 15 (18 February 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No: 22109/2009
DATE:
18 FEBRUARY 2015
In
the matter between:
FIRSTRAND
BANK
LIMITED
.................................................................................................
Plaintiff
And
DOUGLAS
THEKO
LIBUKE
................................................................................................
Defendant
And
FIRSTRAND
FINANCE COMPANY
LIMITED
..............................................................
Third
Party
JUDGMENT
DELIVERED ON 18 FEBRUARY 2015
BOQWANA,
J
Introduction
[1]
The plaintiff
launched action proceedings against the defendant on 20 October 2009,
in which it claimed payment of the sum of R280 156.60
based on a
mortgage bond no. B72356/2008 registered
over
immovable property, Erf 3186, Eerste River, Cape Town (‘the
property’), plus interest of 13.8% per annum, on the
said
amount, calculated from 1 September 2009. It also sought an order
declaring the immovable property executable for the said
sums. The
respective claims were commenced by way of simple summons. The
defendant filed a notice to defend the action.
[2]
The plaintiff
brought a summary judgment application which was refused on 28
January 2010.The plaintiff then delivered a declaration
dated 23
March 2010.
[3]
Following
a joinder application brought by the defendant, a third party,
FirstRand Finance Company (‘FFC’/’third
party’),
was joined into the action proceedings. The relief sought by the
defendant against the third party was said to be
constitutional,
statutory and in terms of the common law. The relief is however hard
to follow as it ranges from an award for compensation
or damages in
respect of the amount claimed by the plaintiff; indemnification of
the defendant by the third party in the event
of the court finding
against him; a finding that the third party has contravened the
National Credit Act
[1]
(‘NCA’);
suspension of the plaintiff’s claim whilst directing the
plaintiff to comply with the NCA; a directive
to the third party to
re-arrange mortgage loan instalments in a fair, just and equitable
manner to enable the defendant to pay
the loan agreement, without
charging interest on it; a declaratory order that a cedent cannot sue
on a ceded debt and a setting
aside of summons
ab
initio
.
[4]
At the commencement of the trial a
considerable amount of time was spent on argument about documents
that were not discovered timeously
and/or which were disputed for
various reasons. Objections about the status of the documents mainly
came from the defendant’s
counsel, Ms Dzai. The nature of
the objections was on many occasions not very clear. To the extent
that parties had not had
time to look at the documents prior to the
trial, I offered them an opportunity to peruse the documents which
were discovered late.
Ms Dzai indicated that she wished to proceed
and would deal with each document as and when it was introduced on
behalf of the plaintiff.
[5]
The plaintiff called Johan Adam van
Der Spuy (‘van der Spuy’) and Pieter Henning (‘Henning’)
as its witnesses,
and the Defendant testified in his own defence. The
matter was adjourned to allow Ms Dzai, who appeared for the
defendant, time
to decide whether she would be calling any further
witnesses. I was informed that no further witnesses would be called
by the defendant
and that the third party would not be calling any
witnesses as well. The matter was accordingly set down for the
hearing of the
closing argument.
Common
cause facts
[6]
It is common
cause: that the defendant concluded a loan agreement with FFC on 29
September 2008; that the plaintiff is a registered
credit provider in
terms of the NCA; that FFC lent and advanced a sum of R263 990.00
to the defendant; that the initial monthly
instalment would be
R2 797.72; that the defendant passed a continuing covering
mortgage bond number B72356/08 over the property
as security in
favour of FFC on 19 December 2008
;
that instalments have not been paid in respect of the loan agreement
since May 2009
and
that the defendant received a section 129 (1) notice in terms of the
NCA.
Issues
in dispute
[7]
The first
issue is whether the plaintiff has the necessary
locus
standi
to
sue the defendant in these proceedings. The defendant has denied in
his plea that the plaintiff is a public company duly registered
in
terms of the Banks Act no. 94 of 1990 (‘Banks Act’) and
carrying on business as FNB Home Loans. He also denied the
regional
office address of the plaintiff.
[8]
The second
issue placed in dispute is a cession of the loan agreement and the
mortgage bond by FFC to the plaintiff. It is also
alleged by the
defendant in the third party notice that the summons did
not disclose the cause of action as the
cession is not alleged therein and therefore should be set aside
ab
initio
.
[9]
The third
issue raised by the defendant is that the plaintiff and/or third
party were in breach of the NCA.
[10]
Fourthly, the
court is called upon to determine whether the defendant was in breach
of the agreement he concluded with FFC and accordingly
is liable to
pay the plaintiff’s claim. The defendant claims that in terms
of the loan agreement he had insurance cover that
entitled him to
have his instalments paid whilst he was unemployed.
Evidence
Plaintiff’s
case
[11]
Van der Spuy testified that he was
employed by the FFC as a manager: collections, from September 2007
until 27 July 2009 when FFC
was sold to the plaintiff. He is now
employed by FirstRand Bank Housing Finance, a division of the
plaintiff, in Centurion, Pretoria
in the same position he held under
FFC. His position entails collection of outstanding debt and taking
of necessary action against
debtors who do not pay or repay
outstanding debt.
[12]
He testified that the plaintiff is a
registered bank in terms of the Banks Act. Its name was changed
from First National Bank
of Southern Africa Limited to FirstRand Bank
Limited with effect from 1 July 1999 by way of a special resolution.
The registration
number of the plaintiff is 1929/001225/06 and the
plaintiff is a registered credit provider with registration number
NCRCP20.
[13]
Van der Spuy testified further that
a covering bond was registered over the immovable property of the
defendant in favour of the
FFC.
[14]
With reference to cession of a bond
document signed and dated 13 July 2009, Van der Spuy testified that
the rights, title and interest
of FFC in and to the mortgage bond
B72356/2008 (which is that of the defendant) were ceded unto and in
favour of the plaintiff
by FFC.
[15]
Upon being referred to the covering
page of the covering mortgage bond document on page 56 of exhibit A,
Van der Spuy testified
that the document had a stamp that read: ‘
For
endorsements, see page 4’
and the
relevant page 4 referred to on that covering page appeared on page 57
of exhibit A. This document was signed by the Deeds
Office Cape
Town’s Registrar, with BC number 033202/09 and had a date stamp
of 31 July 2009. (Ms Dzai disputed that said
page 4 related to the
covering mortgage bond document).
[16]
Van der Spuy testified further that
the plaintiff and FFC entered into a business sale agreement on 27
July 2009, which was effective
from 1 March 2009. FFC sold the
business through its FNB Housing Finance division. He referred to
clause 2.1.6 of the interpretation
section of the agreement which
read as follows:
‘
2.1.6
“Business” means the business which, as at the Effective
Date, is conducted by the Seller through its division
“FNB
Housing Finance” and which ~
2.1.1.6 consists of
the lending of money to members of the public against the security of
mortgage bonds registered over residential
properties’; and
2.1.6.2 includes the
Subject Mortgages, the Current Assets and the Seller’s rights
under the Outstanding Applications, the
Outstanding Loan
Agreementsand (subject to clause 10) the Rental Agreements’
[17]
He testified further that the
defendant failed to comply with the terms of the loan agreement. The
defendant’s last bond payment
was in May 2009 and he has made
no payment since then. With regard to the issue of insurance
policies, Van der Spuy testified that
the defendant accepted three
different types of insurance covers. The first one is the homeowner
insurance, in terms of which property
is insured against damage. The
second is the life credit policy, taken against the life of the
lender, which cover is payable should
he pass away or get disabled
during the lifetime of the bond. The third one is loan cover which
applies when the debtor is not
in a position to repay the instalments
anymore, and he is retrenched in terms of the retrenchment rules,
in which circumstances the bank could lodge a
claim against the insurance company and the insurance company will
then pay six months
instalments
on behalf of the debtor. In terms of the second part of the loan
cover, should the debtor fail to redeem his debt and the property
ends up being sold, the cover will reduce the loss up to the amount
of the cover and the shortfall would be written off by the
bank. The
three insurance covers were included in the defendant’s monthly
instalments as evidenced by the Smart Bond statement sent
to the
defendant by the plaintiff on 28 February 2009. Payment for these was
recovered by the bank by means of a debit order against
the
defendant’s bank account. The plaintiff continued to pay the
insurance premiums on behalf of the defendant, even when
he stopped
paying his monthly instalments.
[18]
He maintained that the defendant
would have received a copy of the loan agreement, the bond deed and
the insurance applications
from the bond registration attorney.
According to Van der Spuy, the defendant alleged that he was
summarily dismissed. That means
he would not be covered by the loan
insurance cover as he was not retrenched. The only benefit he would
have had was if the house
was sold in execution and there was a
shortfall.
[19]
In cross-examination, Van der Spuy
confirmed that the registration number for FFC is 1987/005437/06 and
the NCR registered number
is NCRCP3377. He also agreed that
registration number NCRCP 20 belonged to the plaintiff and not to
FFC. He denied that FFC traded
as FNB Housing Finance because the
sale agreement clearly stated that FFC sold a portion of its business
to the plaintiff. He maintained
that FNB Housing Finance was sold to
the plaintiff. He conceded that he did not have personal knowledge
about whether the documents
dealing with insurance policies were
given to the defendant, but according to him, they would have been
provided to the defendant
at the time of signing the loan agreement
with the conveyancers, as it is procedure. It was put to him that the
loan cover quotation
document was not signed and had no author. In
response to that he testified that the document was system generated
and had no specific
author who signed it.
[20]
The second witness for the
plaintiff, Henning, testified that he has been an attorney since 1984
and a conveyancer since 1986. He
conducted a Deeds Office search in
the Deeds Office in Cape Town, to establish whether bond number
B072356/08 is in actual fact
the bond registered in the records of
the Deeds Office. The procedure at the Deeds Office is that after a
document had been registered
it will go through a procedure of
microfilming. During his search, on the microfilm he found the
specific bond B072356/08registered,
being original pages 2 and 3
which correspond with pages 56, 58 and 59 of exhibit A. There was an
endorsement on the bond in the
Deeds Office which corresponds with
page 57 of exhibit A, with reference number BC033202/9. In explaining
various stamps appearing
on page 56 of exhibit A, Henning testified
that after the registration of the bond on the microfilm, there would
be data capturing
and verification. The bond in question was
registered on 19 December 2008 and data was captured on 06 January
2009. The name on
the stamp was that of a person capturing the data.
The data would have been verified by another person on 07 January
2009. He testified
further that a microfilm number is allocated to
each specific bond. The microfilm number of the bond in question bond
is 200900790493.
Defendant’s
case
[21]
The defendant testified that he has
been residing in the property since December 2008. He received the
notice in terms of section
129(1) of the NCA dated 12 August 2009.
The letter said if he had queries on his home loan he could speak to
Morgan Dube
(‘Dube’). He then went to the branch of
FNB at Cape Gate. He asked to speak to the relevant person. He was
advised
at the bank that issues like these had to be dealt with by
specific people who would then direct him to the person mentioned in
the letter. He went to an office where he was given a phone on which
he spoke to Dube. He told Dube about the letter he wrote to
FNB
‘Joburg’, before he received the section 129 (1) notice,
telling them that he had lost his job and was trying to
make ‘some
kind of insurance claim’ with them. The letter he was referring
to was one letter dated 04 June 2009
which stated the
following:
‘
Dear
Sir/ Madam
I
would like to inform you that on the 25
th
May 2009 my
employer (WERDA CONTAINER CARRIERS) held a meeting in contravention
of section’s (sic) 7, 10, 15 and 16 of the
Basic Conditions of
Employment act 75 of 1997, where it informed all the employees
that we were going to work for a whole
month in Durban and that it
will not pay us overtime and if any of us don’t agree
with its demands, we can therefore
leave our jobs and find work
elsewhere.
I
therefore accepted my employer’s summarily (sic) dismissal and
on 01 June 2009, I instituted a civil claim for breach of
contract,
action iniuriarum and cancellation of the employment contract on the
bases that no reasonable person under the same circumstances
as mine
would be expected to uphold the unreasonable and unlawful demands of
my employer with the Western Cape High Court, in the
matter between
DOUGLAS THEKO LIBUKE and WERDA CONTAINER CARRIERS, Case No: 10969/09.
I
am currently looking for another job and should it happen at the end
of this month that I haven’t found a new job and I
am unable to
pay my monthly bond repayments
I would kindly appreciate if the
insurance on the Bonded Property Stand No: 3186 SILWOOD HEIGHTS would
pay my instalments for a
reasonable period until I can find a job
.
I
thank you in advance for the consideration of this letter
Yours
truly,
D
T LIBUKE’
(Own
emphasis)
[22]
He testified that he had previously
faxed this letter to Dube from FNB Cape Gate on 09 June 2009 and did
not receive any response.
He sent the same letter again on 13 August
2009 after he received the section 129(1) notice, when Dube asked him
to send it again.
There was no response to his letter, until he was
issued with summons.
[23]
He found it very strange that money
was deducted from his salary in respect of loan cover premiums, life
insurance and home owners
insurance and when he needed assistance
from the insurance company during his tribulations, he received none.
[24]
In cross-examination he confirmed
that he did not dispute that he entered into a loan agreement with
FFC. He also did not dispute
that a mortgage bond was registered over
his property. He agreed that he had not made payments in respect of
his mortgage loan
agreement since May 2009. He testified that after
he left his employment on 26 May 2009, he had several ‘piece
jobs’,
doing loads as a truck driver, which he could not regard
as ‘actual employment’. He did not receive regular
monthly
income from these ‘odd jobs’. The income he
received was lower than the balance that he owed. He could therefore
not
make the payments. He testified that he also had to eat, pay for
his children’s school fees and he was not sure whether he
had
to pay for the loan whilst legal action was pending. To date, he
still gets ‘piece jobs’. The payment he received
for
these odd jobs varied between R200 and R800 per job.
[25]
He testified that there were certain
insurance payments that were deducted from his bank account at the
end of the month. These
were also reflected by the statement he
received from the bank. According to him, he was thoroughly informed,
by a certain lady
known as Chriselda, about these insurance policies
when he was signing the loan agreement.
[26]
He could not say what the insurance
policies covered. Chriselda told him that she would send all the
documents to him as she could
not, at that stage, afford him an
opportunity to read the documents before he signed them. Chriselda
however explained the detail
of what the insurance policies covered
during the conversation he had with her. He however could not
remember such details but
recalls that he was happy with the terms
and conditions. Chriselda told him that the insurance would cover him
through difficulties
of making payments. He initialled and/or signed
every document presented to him by Chriselda. He could however not
comment on the
loan cover quotation as it was unsigned. He went
further to state that he did not have knowledge of what was contained
in the insurance
documents and in particular did not have knowledge
that he was covered for retrenchment for a period of six months. He
was not
sure whether he was covered for unemployment hence he
enquired in his letter (dated 4 June 2009). He stated that the word
‘
if’
appearing
in his letter, (in relation to the sentence: ‘
I
would kindly appreciate
if
the insurance on the Bonded Property Stand No: 3186 SILWOOD HEIGHTS
would pay my instalments for a reasonable period until I can
find a
job’)
bears this out. He
recalls that after he had explained his situation to him during the
telephonic conversation, Dube told him that
their insurance did not
cover ‘for that’, although he could not recall Dube’s
exact words.
[27]
The defendant could not comment on
the cession documents and stated that he did not even know what a
cession was and in particular
could not comment on whether the
contested page 57 (the disputed page) formed part of the Covering
Mortgage Bond document
.
He testified that he could not comment on the business sale agreement
or legal documents put to him as he had no legal education.
Evaluation
Plaintiff’s
locus standi
[28]
Defendant’s counsel, Ms Dzai,
challenged the plaintiff’s standing on many fronts. The main
points can be crystallised
as follows. Firstly, she submitted that
the allegations relating to the plaintiff’s identity in the
simple summons are different
to those in the declaration. The
plaintiff’s registration status as a public company, its
registration number and registration
as a bank were placed in dispute
in the defendant’s plea.
[29]
She also
raised an objection regarding the credit provider certificate. She
argued that although she agreed that the plaintiff is
a registered
credit provider and that the number that is reflected in the
certificate is correct, she had an issue with reference
to FNB
Housing Finance. According to her the registration number on the
website of the National Credit Regulator has been used
by both FFC
and the plaintiff.
[30]
She further submitted that cession
is not alleged in the simple summons but only in the declaration and
that the cession documents
were not attached to the summons and that
could justify the setting aside of the summons. Furthermore, cession
documents were placed
in dispute.
[31]
Van der Spuy’s evidence
identifying the plaintiff’s registration as a company and as a
bank in terms of the Banks Act
was unchallenged during his cross
examination. It is unclear why this was denied in the defendant’s
plea in the first place.
[32]
It is so that the plaintiff, in
simple summons cited FNB Housing Finance as its trading name, with
its principal place at 1 Lakeview
Crescent Centurion, whereas in the
declaration it cited FNB Homeloan and gave a regional office address
of 3
rd
floor Colosseum Building, 41 Kruis Street, Johannesburg. That, in my
view, does not affect the question of who the legal person
suing the
defendant is. Van der Spuy testified that both Homeloan and
Housing Finance are divisions of the plaintiff. The
plaintiff is
clearly identified in both the summons and the declaration as
FirstRand Bank Limited.
[33]
It
is trite that a division is not a legal
persona
.
In this regard see
Volkskas
Bank (`n Divisie van Absa Bank Bpk) v Pietersen
[2]
where the Court pointed out that in our law there was no legal
persona
such
as a division.
[3]
In
Megaflex
(`n Divisie van Sentrachem Bpk) en `n Ander v White River Motor
Trading (Edms) Bpk
[4]
the court held that where a drafter of a pleading (or application)
uses the word ‘division’ he or she is only indicating
that a department of the said body corporate is wholly owned by that
body corporate and conducting business under the trade name.
Therefore, the use of FNB Housing Finance or FNB Home Loans does not
change the identity of the person or entity suing.
[34]
It is regrettable that a large part
of evidence and argument was devoted to this issue. Equally, the use
of a different business
addresses in the pleadings does not in my
view result in any confusion as to whom the plaintiff is.
[35]
The question of who the plaintiff
is, is very clear in both the summons and the declaration, in my
view. The letterheads of the
plaintiff and company registration
papers clearly show its registration number as 1929/001225/06.
Furthermore, the plaintiff and
FFC are two separate legal entities.
FFC’s registration number is 1987/005437/07.
[36]
In any event, FFC denied in its plea
to the third party notice that it is trading as FNB Housing Finance.
Van der Spuy testified
that he was employed by FFC at the FNB Housing
Finance Division which was sold to the plaintiff. By virtue of the
sale of business
agreement concluded between the plaintiff and FFC on
27 July 2009, FFC sold part of its business as a going concern
through its
division, FNB Housing Finance. FNB Housing Finance became
part of the plaintiff effective from 01 March 2009.
[37]
Summons was
issued on 20 October 2009. That clearly was after the effective date
of the business sale agreement and after the agreement
was concluded.
To suggest that the plaintiff acted on behalf of FFC when it
initiated legal proceedings is without any merit. The
section 129
Notice was correctly sent by the plaintiff. That was not done on
behalf of FFC. The section 129 notice is dated 12
August 2009. Again,
that is after the sale of business of FFC’s FNB Housing Finance
division to the plaintiff.
[38]
The submission that the plaintiff
acted as agent of FFC by sending a homeloan statement dated 28
February 2009 (barely a day before
the effective date) whereas the
sale was effective on 01 March 2009 bears no relevance in these
proceeding. It is not clear when
this document was received by the
defendant. Of relevance though is that it notified the defendant of
the change of legal services
address.
[39]
M
s
Dzai submitted that the plaintiff led the defendant to believe that
FFC was the party suing him in the main action. That did not
come
across when the defendant was giving evidence. The defendant clearly
knew that he was being sued by the plaintiff. In any
event, there is
no cause for confusion as both the summons and declaration are clear
as to who the plaintiff is.
Cession
[40]
Moving to the
issue of a cession. I am satisfied that by virtue of the business
sale agreement all outstanding loan agreements were
sold to the
plaintiff by FFC effective from 1 March 2009. The plaintiff
consequently became the legal holder of the loan agreement.
The
mortgage bond was ceded and such cession endorsed by the Registrar of
Deeds. Henning’s evidence was clear. He clarified
the
disputed cession documents through his investigations at the Deeds
Office. According to him, the mortgage bond B72356/08 was
ceded from
FFC to the plaintiff and that cession was duly registered by the
Deeds Office under BC 33202/09 on 31 July 2009 in accordance
with the
endorsement appearing on page 63 or 57 of Exhibit ‘A’.
There was no evidence presented to rebut Henning’s
evidence by
the defendant. Henning came across as a credible and truthful
witness. His evidence was not disturbed in cross-examination
and I
have no reason to reject it.
[41]
Furthermore,
the records from the Deeds Office recording cession of the bond and
the endorsement of the mortgage bond are conclusive
proof
[5]
that the mortgage bond in this matter was ceded from FFC to the
plaintiff. I am accordingly satisfied that the plaintiff has
discharged
its onus and has been able to show that it indeed is a
present legal holder of the mortgage loan agreement and bond ceded to
it
by FFC.
[42]
The fact that
a cession was not alleged in the summons but only in the declaration
is a non-issue, in my view. I say this because
the defendant never
raised any special point or defence in his plea, he simply alleged
that he had no knowledge of the cession
and challenged the plaintiff
to prove it. The proceedings have moved beyond that point now.
Cession was alleged in the declaration
and cession documents were
deliberated upon extensively during the trial.
[43]
The
averment about the cession was made in the declaration. Ms Dzai
argues that the requirements in the
ABSA
Bank v Janse van Rensburg
[6]
full bench decision were not complied with in that the cession
documents were not attached to the summons. The Court in the
Janse
van Rensburg
matter found that although simple summons is not a pleading, it is
nevertheless necessary, on a proper interpretation of rule 17
(2)
(b), read with form 9, to attach a written agreement where the
plaintiff’s cause of action is based on such agreement.
In
light of that, the matters were postponed
sine
die
to afford the bank amendments to their respective summonses.
[7]
Had a special point been raised at an appropriate stage, the
plaintiff may, in any event, have been allowed to rectify the
complaint
or the alleged irregularity by amending its pleadings.
[44]
In
Smith
v Williams
[8]
the Court held that summons must be read together with the
declaration and that declaration is incorporated by reference in the
summons. The Court held further that:
‘
the
Court may always in its discretion allow an amendment of a pleading
even where that pleading does not sufficiently set out a
cause of
action. Courts may allow amendments unless there is prejudice or
injustice, and even where an amendment is necessary in
order to
enable a plaintiff to succeed in his action such amendments may and
are frequently made.’
[9]
Summonses
would therefore not be dismissed
ab
initio
as claimed by the defendant. Reference to the
ABSA
Bank v Janse van Rensburg
decision
is in these circumstances therefore misplaced. It is also known
by now that a‘rule of procedure cannot deprive
the plaintiff of
his cause of action or of his right to adduce secondary evidence of
the contract, though the rules would still
require the plaintiff to
plead with appropriate particularity the conclusion of the contract
and its terms
’
as
it was held by Rogers J
(with
Traverso DJP concurring)
in
ABSA
Bank Ltd v Zalvest Twenty (Pty) Ltd and Another
[10]
[45]
The learned
judge went on to say at paragraph
[21]
,‘...[i]n the
absence of the written agreement the basis of the [plaintiffs’]
cause of action does not appear
ex
facie
the
pleadings’ (para 18).
If
a plaintiff pleads the conclusion of a written contract and the terms
relevant to his cause of action, the cause of action will
appear
ex
facie
the
particulars of claim.
That, after all, is how causes of action based on written contracts
were legitimately pleaded prior to the amendment of rule 18(6)
in
1987, at a time when there was no procedural requirements to annex
the written contract. What is true is that since 1987 a plaintiff
who
fails to annex the written contract will (at least in the absence of
a properly pleaded explanation) be in breach of rule 18(6).’
(Own emphasis)
[46]
In
any event, I am of the view that the cession issue has no bearing on
the cause of action but merely concerns the plaintiff’s
locus
standi
as
it was found in
the matter of
Corporate
Finance Solutions (Pty) Ltd v Hope Restoration Ministries
[11]
,
where the plaintiff sought to amend its declaration by
relying
on it having become a cessionary pursuant to an agreement. In its
judgment the court held as follows:
‘
The
basis of the defendant’s objection to the proposed amendment is
that the plaintiff’s reliance on a cession entirely
different
from the original cession would result in the introduction of a new
cause of action.
The contention
conflates the basic difference between
locus
standi
and cause of action. The
amendment, as rightly conceded by counsel for the defendant, has no
bearing on the plaintiff’s cause
of action
.
It merely concerns its
locus standi
to claim as the cessionary of SGR.’ (
Own
emphasis
)
[47]
For the reasons above the
defendant’s points of contention on the issue of the cession
are rejected.
Non-compliance
with the NCA
[48]
The defendant further alleges that
the plaintiff and/or FFC did not comply with the provisions of the
NCA in the mortgage loan agreement.
It is submitted on behalf of the
defendant that FFC identified itself as an authorised Financial
Service Provider and Credit Provider
(NCRCP20) in the loan agreement.
Ms Dzai argued that the plaintiff initiated legal proceedings using
FFC’s details. It is
common cause that the plaintiff is a
registered credit provider under NCRCP20. Ms Dzai brought documents
extracted from a National
Credit Regulator search which in fact
confirm that the plaintiff and the third party, FFC, are two
different service providers
with two different registration numbers.
It is in any event not clear what relief is sought on this point.
[49]
In terms of the evidence of Van der
Spuy FNB Housing Finance was once a branch of FFC. The NCR
Certificate refers to FNB Housing
Finance, which was sold to the
plaintiff as a going concern. FNB Housing Finance, a division under
which the lending of money business
was sold, was at the stage when
the credit agreement was entered into with the defendant, a division
of FFC or FFC had traded under
that name as reflected in the loan
agreement.
[50]
To the extent that the two entities
are accused of fraud or misrepresentation proper channels and legal
processes should be followed
in that regard. I am not called upon to
make a finding on that issue. In any event, I am not convinced that
there had been any
unlawfulness or misrepresentation as alleged on
behalf of the defendant.
[51]
As far as the section 129 (1) notice
is concerned, the defendant admitted receiving
the
letter. He did not take up the options set out in section 129 (1) (a)
of the NCA, which are to refer the credit agreement to
a debt
counsellor, alternative dispute resolution agent, consumer court or
ombud with jurisdiction, upon receipt of the notice.
The invitation
to contact Dube, which was the only thing the defendant did, does not
constitute any one of the credit provider’s
proposals.
[52]
A further
point raised on the
defendant’s
plea is that the plaintiff failed to comply with section 111 read
with section 66 of the NCA. Section 111 stipulates
as follows:
‘
Disputed
entries in accounts
111.
(1) A consumer
may
dispute
all or part of any particular
credit or debit entered under a credit agreement, by delivering a
written notice to the credit provider.
(2)
A credit provider who receives a notice of
dispute in terms of subsection
(1)-
(a)
must give the consumer a written
notice either-
(i)
explaining the entry in reasonable detail; or
(ii)
confirming that the statement was in error either in whole or in
part, and
setting out the
revised entry; and
(b)
must not begin enforcement
proceedings
on
the
basis of a default arising from the disputed entry-
(i)
until the credit provider has complied with paragraph
(a);
or
(ii)
at any time that the matter is under alternative dispute resolution
procedures, or before the Tribunal in terms of section
115
.
[53]
The letter
written by the defendant on 04 June 2009 did not dispute all or any
part of any particular credit or debit under the
credit agreement.
Reliance on section 111 is therefore misplaced. The letter that the
defendant wrote informed the plaintiff that
the defendant was no
longer employed in that he accepted his employer’s summary
dismissal. He also enquired whether the insurance
could make
reasonable payments on his behalf whilst he was unemployed. There is
no evidence that any other provisions of the NCA
were breached,
including sections 130(1) (b), 86 and 129 that Ms Dzai referred to in
her heads of argument.
Plaintiff’s
claim
[54]
Turning to the
plaintiff’s claim. The defendant acknowledged that he was lent
and advanced monies by FFC pursuant to a mortgage
loan agreement
concluded on 29 September 2008 in the sum of R263 990.00. He
caused a covering mortgage bond to be registered
over the property in
favour of FFC. He has not paid his instalments since May 2009 due to
his non-employment. He received
the section 129 Notice. He
enquired about insurance in the letter already mentioned. Dube
informed him telephonically that his
situation was not covered.
[55]
Van der Spuy
testified on behalf of the plaintiff that the defendant was insured
under the loan cover. The loan cover premiums
appear on the
home loan statement sent to the defendant. Although Van der Spuy was
not the person that administered the loan at
the time of signing the
agreement, the evidence he gave with regard to the insurance policies
is cogent. It is also supported by
a loan cover quotation document,
detailing the benefits and exclusions of this cover, which he said
would have been given to the
defendant when signing the loan
agreement with the conveyancers. He added that it was computer
generated hence it had no signature
or the name of the author on it.
The defendant testified that he would have signed all the documents
that he received and it was
unlikely that he had received the loan
cover quotation document as it is unsigned. Even if one were to
disregard the loan cover
quotation document or insurance application,
Van der Spuy’s evidence as to what the loan cover stood for and
what benefits
it covered and when those would be applicable was not
challenged. No evidence was produced by the defendant to contradict
Van der
Spuy’s evidence in this regard.
[56]
Furthermore
the defendant testified in cross-examination that Chriselda, who
discussed the insurance policies with him, thoroughly
explained the
different covers but he could not remember what she said in detail.
He also confirmed the allegation in his plea
that he was satisfied
with the terms and conditions.
[57]
When pressed
under cross-examination he conceded that he was not sure if he was
covered for unemployment as evidenced by the use
of the word ‘
if
’
in his letter date 04 June 2009. The terms and conditions alleged in
the defendant’s amended plea cannot be accepted
as they are not
supported by the loan agreement or any evidence. There is therefore
no basis in law to support the contention that
the alleged terms and
conditions were expressly, alternatively tacitly or impliedly agreed
upon.
[58]
To the extent
the defendant alleges that he was unable to set out the terms and
conditions of the insurance cover because he did
not receive the
documents he was promised, I find it strange that he never asked for
these documents, upon discovering that they
were not sent to him,
particularly at the time when he was enquiring about whether the
insurance could pay for him during the period
of his unemployment.
[59]
In the absence
of evidence to the contrary, there is no reason not to accept Van der
Spuy’s evidence that the loan cover would
come into play upon
the defendant’s retrenchment and his monthly instalments would
be covered for a maximum period of six
months. The defendant
stated in his letter dated 04 June 2009 that he was summarily
dismissed by his employer who told the
employees in a meeting that
they would work in Durban without any overtime paid and that anyone
who did not want to accede to that
demand could leave their job. He
chose to leave. He also stated in his letter that he had instituted
legal action for breach of
contract in this Court. It cannot be
concluded from his letter dated 04 June 2009 that he was retrenched,
without any evidence
to support that. In any event, he did not allege
retrenchment as a reason for his dismissal before this Court.
[60]
Nevertheless,
the alleged insurance defence cannot excuse the defendant from his
contractual obligations, because he, in any event,
would still be
liable to pay. At best, the insurance payment would reduce the amount
that was due to be paid by the defendant to
the plaintiff at the end
of the day.
[61]
The defendant
came across as an honest witness and made concessions when he needed
to. He was however unsure of the crucial details
relevant to his
defence and case. There was no evidence to support allegations that
that the defendant was entitled to have his
instalments paid upon his
being unemployed (regardless of the reason). He also appeared
not to understand any of the various
complex issues placed in dispute
by his legal team on the pleadings.
[62]
In the
circumstances, the plaintiff has been able to show that the defendant
breached the loan agreement and was liable to pay to
the plaintiff
the amount claimed. The certificate of balance stating the amount
claimed in the summons was not disputed during
Van der Spuy’s
cross-examination. Ms Dzai objected to the introduction of the new
certificate of balance indicating a new
balance, and Mr Jonker did
not persist with it.
[63]
It is trite
that the court must be satisfied that, where the property constitutes
a primary residence, circumstances are fitting
to declare property
executable. All relevant circumstances must be considered.
[64]
It can be
deduced from the evidence that the property in this case is
residential. I have no difficulty in accepting that it is
the
defendant’s primary residence. The defendant has been
unemployed since May 2009 and has not paid his instalment
since then.
His initial instalment was estimated to be R2797.72 and the full
amount owing as at September 2009 was R280 156.60
with arrears
of R9735.47. The defendant has been in arrears for more than
five years. The defendant testified that he has
had ‘odd jobs’
since then but could not pay the balance owing to the plaintiff as it
was higher than the ‘wages’
he received. He did not
indicate that he would at any stage be able to pay the instalments.
Furthermore, he did not indicate any
arrangements he would make to endeavour to meet his contractual
obligations other than the
enquiries he made in respect of the
insurance claims, which in any event would not have covered him for
the entire period since
May 2009
.
According to Van der Spuy, the new balance was R514 777.75 as at
September 2014. If the insurance policy would have
paid for
him, the balance owing on his loan account would have been
R474 653.76 as at end of September 2014. This was not
disputed
in cross-examination.
[65]
The
defendant has not placed any circumstances before the Court to
support a contention that his constitutional rights in terms
of
section 26(1) of the Constitution would be infringed if the property
were to be declared executable. While the Court is sympathetic
to the
defendant’s unemployment situation, it cannot deprive the
plaintiff the claim to have the property declared executable
in these
circumstances. The decision of Rogers J in the matter of
Standard
Bank of South Africa Limited v Hunkydory Investments 188 (Pty) Ltd
and others
[12]
is apposite, in which it is stated that the right of access to
adequate housing enshrined in the Constitution in terms of section
26
does not entail a right to stay in a house of one’s choice even
though one cannot afford it.
Third
party claims
[66]
There is no
legal basis for the claims sought against the third party and no
evidence was led to support such claims by the defendant.
Those stand
to be dismissed.
[67]
For the
reasons outlined above, I make the following order:
1.
The defendant
is ordered to pay to the plaintiff:
1.1
The sum of
R280 156.60; (two hundred and eighty thousand and one hundred
and fifty six rand and sixty cents).
1.2
I
nterest
calculated on a daily basis and compounded monthly on the aforesaid
amount at the rate of 13.8%
per
annum
calculated from 1 September 2009 to date of payment;
1.3
Costs of suit;
2.
The property
known as Erf 3186 Eerste River, in the City of Cape Town,
Division Stellenbosch, Province of the Western Cape
and held by deed
of transfer number T80791/08, is declared executable for the said
sum, interest and costs.
3.
The claims against the third party are
dismissed with costs.
N
P BOQWANA
Judge
of the High Court
APPEARANCES
FOR
THE
PLAINTIFF & THIRD PARTY:
Advocate
J W Jonker
Instructed
by: Fourie Basson &Veldtman, Parow C/O Walkers Inc., Cape Town
FOR
THE DEFENDANT: Advocate L Dzai
Instructed
by: Dentons Inc as Kapditwala Inc, Rondebosch
[1]
Act
No. 34 of 2005
[2]
1993
(1) SA 312
(C) at 314B-C
[3]
See
also Two Sixty Four Investments (Pty) Ltd v Trust Bank 1993 (3) SA
384 (W)
[4]
1996
(1) SA 616
(T) at 618D - E
[5]
See
Barclays National Bank Ltd v Chaldon Investments (Pty) Ltd; Barclays
National Bank Ltd v Swartzberg
1975 (2) SA 344
(W) at 349H-350A
[6]
ABSA
Bank v Janse van Rensburg
2013 (5) SA 173
(WCC) at paragraph
15
[7]
ABSA
Bank v Janse van Rensburg supra paragraph 22 and 23
[8]
Smith
v Williams; Smith v Kok
1952 (2) SA 682
(WLD) at 685 H – 686
B
[9]
Smith
v Williams supra at 686 G
[10]
2014
(2) SA 119
(WCC) at paragraph [20].
[11]
(2009/8872)
[2013] ZAGPJHC 68 (6 March 2013)
[12]
2010
(1) SA 634
(WCC) at paragraph 30