Ditshego and Others v Brusson Finance (Pty) Ltd and Others (5144/2009) [2010] ZAFSHC 68 (22 July 2010)

Ditshego and Others v Brusson Finance (Pty) Ltd and Others (5144/2009) [2010] ZAFSHC 68 (22 July 2010)

The court found that the agreements between the applicants and respondents were so interrelated and reciprocal that they formed a single transaction, the substance of which was a loan secured by the applicants' property. Brusson Finance (Pty) Ltd was the effective credit provider, operating without registration as required by the National Credit Act. The structure of the agreements enabled Brusson to obtain ownership of the property upon default, amounting to an unlawful pactum commissorium and parate executie. The court held that the agreements were simulated transactions designed to circumvent the Act and were therefore unlawful and void. The National Credit Regulator had locus standi...

Citation
[2010] ZAFSHC 68
Parties
Applicant: Matile Joseph Ditshego; Applicant: Makolobe Lizzie Ditshego; Applicant: The National Credit Regulator; Respondent: Brusson Finance (Pty) Ltd; Respondent: Amanda Boshoff; Respondent: Absa Bank Limited; Respondent: The Registrar of Deeds
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
22 July 2010
Case Number
5144/2009
Procedural Posture
Civil Application / Final Judgment
Outcome
Application granted. Agreements declared unlawful and void. Restitution ordered.
Judges
A. F. Jordaan
Legal Topics
National Credit Act, Unlawful Agreement, Pactum Commissorium, Parate Executie, Restitution, Locus Standi
Banking and Finance Civil Procedure Commercial and Corporate National Credit Act Unlawful Agreement Pactum Commissorium Parate Executie Restitution +1 more

Case Brief

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Parties

Matile Joseph Ditshego

Applicant

Makolobe Lizzie Ditshego

Applicant

The National Credit Regulator

Applicant

Brusson Finance (Pty) Ltd

Respondent

Amanda Boshoff

Respondent

Absa Bank Limited

Respondent

The Registrar of Deeds

Respondent

Procedural Posture

Civil Application / Final Judgment

Legal Issues

  1. 1 Whether the agreements between the applicants and respondents constitute a single, unlawful credit transaction.
  2. 2 Whether Brusson Finance (Pty) Ltd acted as a credit provider and was required to be registered under the National Credit Act.
  3. 3 Whether the agreements amount to an unlawful pactum commissorium and parate executie.

Ratio Decidendi

The court found that the agreements between the applicants and respondents were so interrelated and reciprocal that they formed a single transaction, the substance of which was a loan secured by the applicants' property. Brusson Finance (Pty) Ltd was the effective credit provider, operating without registration as required by the National Credit Act. The structure of the agreements enabled Brusson to obtain ownership of the property upon default, amounting to an unlawful pactum commissorium and parate executie. The court held that the agreements were simulated transactions designed to circumvent the Act and were therefore unlawful and void. The National Credit Regulator had locus standi...

Court Disposition

Application granted. Agreements declared unlawful and void. Restitution ordered.

Orders

  • It is declared that the agreements entered into by applicants and respondents are unlawful and void.
  • First and second respondents are ordered, jointly and severally, to reduce the outstanding amount of the existing bond held by third respondent to an amount not exceeding R123 109,53.