Investec Bank Limited v W.S.N (30110/19) [2020] ZAGPPHC 333 (7 July 2020)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

1. REPORTABLE: YES/NO

2. OF INTEREST TO OTHER JUDGES: YES/NO

3. REVISED

CASE NUMBER: 30110/19

In the matter between:

INVESTEC BANK LIMITED

APPLICANT

and

W[....] S[....] N[....]

RESPONDENT

JUDGMENT

COERTZEN, AJ:

[1] The applicant applies for judgment against the respondent for payment of the outstanding balances due and owing in terms of the respondent’s home loan account and in terms of the respondent’s credit card account with the applicant.

[2] The applicant also seeks an order declaring the immovable property of the respondent, bonded in favour of the applicant as security under the home loan account, executable in terms of rule 46A(8) of the Uniform Rules of Court.

[3] The application was argued before me on 18 June 2020. The factual background and the indebtedness of the respondent towards the applicant in terms of the accounts, are mostly common cause. It was not disputed at the hearing of the application that the applicant was entitled to a money judgment. The respondent’s primary opposition to the application is aimed at the relief sought to declare the immovable property, which is common cause is the respondent’s primary residence, executable. The crux of the respondent’s opposition appears from para 10 of the answering affidavit, where the respondent states:

“I deny that the applicant should be granted the orders sought as prayed in the notice of motion. I make this submission on the basis that this immovable property which the applicant wants to execute is my primary residence. In my understanding as it relates to primary residence, it is only when there is disproportionality 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 is no other proportionate means to attain the same end, execution may not be avoided. I submit that under the circumstances of this matter, Investec still has other proportionate means to attain the same end.”

[4] The mortgaged immovable property of the respondent is situated at [….] Johannesburg (‘the property’), more fully identified and described in the notice of motion and founding affidavit.

CLAIM 1 - THE HOME LOAN ACCOUNT:

[5] On 17 February 2017 the parties concluded a home loan agreement. In terms of the agreement the applicant lent and advanced a capital amount of R2,105,000.00 to the respondent. The home loan is secured by a mortgage bond, registered in favour of the applicant over the property. The total amount of the loan, together with finance charges at an agreed to variable interest rate, was repayable to the applicant in 240 monthly instalments, which instalments on date of the agreement, amounted to R20,866.81. It was agreed that in the event of the respondent’s failure to pay any amount payable to the applicant, the applicant would be entitled to claim immediate repayment of the full outstanding balance of the loan, together with interest and costs on a scale as between attorney and client. In terms of the agreement a certificate of balance issued by any manager of the applicant shall constitute prima facie evidence of the respondent's indebtedness to the applicant in terms of the home loan account. The respondent failed to make punctual payments to the applicant in terms of the agreement. The notice of motion was issued on 3 May 2019. The last payment

made by the respondent in terms of the home loan agreement, prior to this date, was on 26 April 2018 in the amount of R20,557.71.

[6] It was common cause at the hearing of the application that on 26 May 2020 the capital balance outstanding on the home loan account was an amount of R2,505,997.71, and that the arrears on the account represented an amount of R428,642.79. These amounts are reflected as such in terms of a transaction history for the period 4 April 2017 to 26 May 2020, attached to the applicant’s supplementary affidavit. The amounts so reflected were accepted as correct by the respondent during argument. In terms of the transaction history, the interest rate on the account on 26 May 2020 was 6,9% per annum.

CLAIM 2 - THE CREDIT CARD ACCOUNT:

[7] During December 2016 the parties concluded a Private Bank Card Agreement in terms of which the applicant granted credit card facilities to the respondent. It is common cause that the respondent failed to fulfil her obligations in terms of the agreement as a result of which the applicant became entitled to claim the full outstanding balance due and owing on the credit card account. The written agreement similarly provides for a certificate of balance signed by a manager of the applicant as prima facie proof of respondent’s indebtedness to the applicant in terms of the credit card account.

[8] It was also common cause at the hearing of the application that on 26 May 2020 the balance outstanding on the account was an amount of R R33,458.81. This amount is reflected as such in terms of a transaction history dated 5 June 2020, attached to the applicant’s supplementary affidavit, and was accepted as correct by the respondent during argument.

PAYMENTS MADE AFTER INSTITUTION OF THE PROCEEDINGS:

[9] It is common cause that the respondent made the following payments on her home loan account after the launch of the application and before the hearing of the matter, namely an amount of R20,000.00 each, on 18 February 2020, on 24 March 2020, on 16 April 2020 and on 18 May 2020, respectively. The respondent also made the following payments on her credit card account after the launch of the application, namely an amount of R2,000.00 each, on 6 December 2019, 15 January 2020, 15 February 2020, 13 March 2020, 15 April 2020 and 15 May 2020, respectively.

[10] At the hearing of the application counsel for the respondent presented documents to me from the bar, which documents purported to be proof of a further payment of R20,000 on the home loan account on 17 June 2020 (i.e. the day before the hearing) and a further payment of R3,000.00 on the credit card account on 15 June 2020. I pause to mention that the respondent purportedly also made a payment of R7,000.00 to the City of Johannesburg on 17 June 2020, in terms of a payment arrangement, in respect of arrear rates and taxes on the immovable property. Counsel for the applicant objected to the documents being handed in on the basis that the purported payments, if made, appears to have been made by way of electronic funds transfer from a Capitec Bank account, and would not yet have reflected on the respondent’s accounts with the applicant (on the date of hearing). I will however assume in favour of the respondent that these payments were in fact made by the respondent and were in fact received by the applicant (and the City of Johannesburg for that matter).

[11] In view of what I have already stated, it was common cause at the hearing that the certificates of balance attached to the founding affidavit do not account for the payments made after institution of the proceedings. At the hearing of the matter counsel for the applicant contended that the applicant may obtain updated certificates of balance reflecting the amounts owing to the applicant on the accounts and submit them to court. Counsel for the respondent readily conceded that the applicant was entitled to do so. It is not clear why updated certificates of balance were not made available at the hearing. Be that as it may, after I reserved judgment on 18 June 2020, the applicant submitted updated certificates of balance in respect of both accounts by email to my registrar on 19 June 2020, which certificates were then brought to my attention.

[12] In Rossouw and another v First Rand Bank Ltd t/a FNB Home Loans (formerly First Rand Bank of SA Ltd) [2011] 2 All SA 56 (SCA) it was held at para 47:

“…To the extent that the certificate reflects the balance due as at the date of hearing, it is merely an arithmetical calculation based on the facts already before the court which the court would otherwise have to perform itself. Such calculations are better performed by a qualified person in the employ of a financial institution. And to the extent that such a certificate may reflect additional payments by the defendant after the issue of summons, or payments not taken into account when summons was issued, this constitutes an admission against interest by the Bank and the Bank is entitled to abandon part of the relief it seeks. Certificates of balance handed in at the hearing (whether a quo or on appeal) perform a useful function…”.

[13] In Senekal v Trust Bank of Africa Ltd [1978] 4 All SA 43 (A), 47:

“….There might be several items to which such a certificate relates, some of which may appear to be unassailable while others may either be shown to be inaccurate or appear to be of dubious reliability, or might require some modification or adjustment. I can find no reason why in such circumstances the certificate is to be entirely disregarded merely because it is found or thought to be inaccurate or unreliable in certain respects. At the end of the case, when all the evidence (which includes the certificate) is in, the Court must decide whether the party upon whom the onus rests has discharged it on a proper balance of probabilities…” - (also reported at 1978 (3) SA 375 (A)).

[14] A certificate of balance is an evidentiary tool provided for in an agreement to facilitate proof of the amount of the indebtedness. The certificate does not in itself establish liability - Thrupp Investment Holdings (Pty) Ltd v Goldrick [2007] ZAGPHC 23; 2008 (2) SA 253 (W) at para 6.

[15] As I have already mentioned, the liability of the respondent towards the applicant in this matter is not disputed. It is in fact conceded.

[16] In terms of the updated certificate of balance dated 19 June 2020 in respect of the home loan account, the indebtedness of the respondent is certified as being in an amount of R2,494,517.47 as at 19 June 2020, together with interest at the rate of 6.9% (being Investec Bank Limited’s Mortgage Bond rate, currently 7.25%, minus 0.35%) with effect from 19 June 2020, calculated daily and compounded monthly to date of payment, both days inclusive. In terms of the updated certificate of balance dated 19 June 2020 in respect of the credit card account, the indebtedness of the respondent is certified as being in an amount of R30,667.47 together with interest at the rate of prime per annum, currently 7.25%, payable from 19 June 2020 to date of payment, calculated daily and compounded monthly.

[17] I pause to mentioned that the respondent in her supplementary affidavit dated 10 June 2020, purported to raise a dispute in respect of the applicant’s calculations of the indebtedness, based on the applicant’s alleged failure to account for the payments made by the respondent. As pointed out earlier in this judgment, the respondent did not persist with this argument at the hearing before me. The respondent conceded the correctness of the amounts referred to in paras 6 and 8 of this judgment. It was not disputed at the hearing that the transaction history on each account correctly reflected the payments made by the respondent. The amounts due and payable as on 26 May 2020 are common cause.

[18] It is apparent that the amounts certified as due and owing in terms of the updated certificates of balance on each of the accounts, are less than the amounts as on 26 May 2020, as conceded by the respondent on the date of hearing on 18 June 2020. No evidence has been placed before me by way of affidavit which may lead me to conclude that the updated certificates of balance should be disregarded. In view of the authorities cited earlier in this judgment and in view of the concessions made on behalf of the respondent at the hearing of the application, I am inclined to accept the updated certificates of balance, as prima facie proof of the respondent’s indebtedness on 19 June 2020.

[19] It is common cause that prior to the institution of the proceedings, the applicant complied with the relevant provisions of the National Credit Act, 34 of 2005 (‘NCA’) and with the default procedures as provided for in the relevant agreements.

[20] It follows that the applicant is entitled to a money judgment on Claims 1 and 2.

IS EXECUTION AGAINST THE IMMOVABLE PROPERTY WARRANTED?

[21] In arriving at an appropriate order, I am enjoined by r 46A(5) to consider, amongst other factors which may be necessary to give effect to subrule 8, the market value of the property, the local authority valuation, the amount owing on the mortgage bond, the amount owing to the local authority as rates and other dues and the amounts owing to a body corporate as levies. It is common cause that there is no amount owing to a body corporate as levies. In terms of a valuation report dated 11 December 2018 the market value of the property R2,100,000.00 and the forced sale value is R1,575,000.00. The local authority valuation of the property is R2,000,000.00. In terms of a tax invoice issued by City of Johannesburg to the respondent on 6 December 2018, the amount owing to the local authority is R89,205.05. In terms of a written acknowledgement of debt dated 12 February 2020, attached to the respondent’s supplementary affidavit, the respondent that acknowledged her indebtedness towards the relevant local authority for payment of an amount of R129,102.13 for outstanding rates and other dues. In terms of the acknowledgement of debt the respondent undertook to make immediate payment of an amount of R9000.00 and to pay the balance in instalments of R3,431.49 over a period of 36 months. Apart from the payment to the local authority referred to in para 10 of this judgment, the respondent made payments to the City of Johannesburg in an amount of R7,000 on 13 March 2020, in amount R7,500 on 15 April 2020 and an amount R7,000.00 on 15 May 2020.

[22] It is common cause that the respondent did not acquire the immovable property by means of the assistance of a State subsidy. The mortgaged property can be described as a residential dwelling comprising of, inter alia, four bedrooms, four bathrooms, a double garage and heated pool with solar panels.

[23] The mortgage bond registered over the property secured the indebtedness of the respondent towards the applicant under the home loan account. The property is the applicant's only security for the indebtedness of the respondent under the home loan account. It common cause that the respondent willingly put up the immovable property as security for the loan. The respondent was aware that in the event of her default, the applicant would seek to realise its security and to execute against the property.

[24] In terms of subrule 8(d) a court considering an application under r 46A, may order execution against the primary residence of a judgment debtor if there is no other satisfactory means of satisfying the judgment debt. The applicant contends that no such other satisfactory means exist. The monthly payments of R20,000.00 which the respondent made during the period February 2020 to June 2020, essentially only covers the normal monthly instalments under the home loan account. The applicant contends that these payments, even if sustained, do not address the substantial arrear amount which has accrued on the home loan.

[25] The respondent lost her previous employment during March 2018. At the time she was employed at Telkom in Johannesburg. As a result, the respondent became unable to further comply with her obligations towards the applicant. The respondent only regained employment in August 2019 in Pretoria. As a result her immediate financial situation improved. The respondent now earns a gross income of some R94,000.00 per month. According to the respondent’s salary advice for November 2019, attached to the answering affidavit, the net salary of the respondent is indicated as R59,117.35. Despite her new employment it was not suggested or contended by the respondent that she is able to pay substantially more (if anything) towards the arrears, than what she has been paying since February 2020, In the answering affidavit, the respondent states:

“31. As of 13 September 2019, I am in arrears to the amount of R328 092.51

32. I submit that the abovementioned amount is recoverable from me by Investec. In accordance with my current earnings, the amount is not too substantial that I would be able to repay the debt as it stand. The amount remains with feasible grasp for me to be able to repay.”

[26] It was common cause at the hearing of the matter that the arrears on the account on 26 May 2020, already represented some R428,642.79. On what has been placed before me, I am constrained to find that there appears no real substance in the respondent’s statement that she would somehow be able to repay the substantial arrears on the home loan account. I pause to mention that the respondent never opted to apply for debt review in terms of the relevant provisions of the NCA.

[27] During September 2019 the respondent contacted the applicant with a request to sell the property privately and to pay the shortfall in instalments. The applicant had by then already instituted legal proceedings against the respondent. The applicant indicated to the respondent that she may proceed to sell the property, subject to acceptable guarantees being provided and subject to legal action continuing.

[28] In the answering affidavit and argument before me, the possibility of selling the property privately, was suggested as the satisfactory alternative means to satisfy the judgment debt. However, when asked whether the respondent had taken any steps in this regard, respondent’s counsel indicated that the respondent did in fact place her property on the market, but that her efforts in this regard, unfortunately came to nought.

[29] The respondent alleges that her sickly sister resides with her and that the respondent is solely responsible for the sister’s wellbeing. There is no affidavit by the respondent’s sister. The nature and extent of the sister’s condition are not supported or explained by any medical evidence. In any event, it was not suggested or contended in argument that the circumstances surrounding the sister’s condition, are of such a nature that it would be impossible or even difficult to adequately accommodate the respondent and her sister elsewhere. It appears from the answering affidavit that the respondent had in fact sold her erstwhile immovable property during 2017, before taking occupation of the immovable property which is the subject of the present application.

[30] It appears to me that what the respondent really desires is more time. It must be remembered that it remains open to the respondent to remedy her default in terms of the home loan account, by paying to the applicant the arrear, overdue amounts, together the applicant’s costs and charges as contemplated in terms of s 129(4) of the NCA - Nkata v Firstrand Bank Limited and Others 2016 (4) SA 257 (CC) at para 131; Duma v Absa Bank Limited 2018 (4) SA 463 (GP) at para 17. Even after judgment the respondent has the right to remedy her default in this manner, until the proceeds from a sale in execution have been realised. In this sense the respondent is given greater leeway in relation to the maintenance of the home loan account – Erasmus, Superior Court Practice, D1-632S.

[31] Having considered all the circumstances of the matter I am persuaded that no other reasonable alternative exists for the applicant to enforce its rights. A declaration of the immovable property as executable, would in the present matter not constitute an abuse of process and would not infringe on the respondent’s fundamental right to access to adequate housing in terms of s 26 of the Constitution of the Republic of South Africa, 1996. There appears to be no disproportionality between execution against the property and other possible means to exact payment of the judgment debt - NPGS Protection & Security Services CC v FirstRand Bank Ltd 2020 (1) SA 494 (SCA) at 509E–G. No other possible means, other than an opportunity to privately sell the property, has been proffered by the respondent. I am inclined to exercise my discretion in favour of the applicant. In my view execution against the immovable property is warranted.

MUST A RESERVE PRICE BE SET?

[32] We live in uncertain times. The application was heard during the so-called level 3 lockdown period in South Africa. On date of this judgment the country is still under level 3 lockdown. It remains to be seen when a sale in execution will take place. It remains to be seen whether any reserve price set in terms hereof, will be achieved at such sale. It may very well be more likely that a reserve price is not realised or that the immovable property is not even sold. However, having considered the matter and having considered the factors set out in subrule 9(b), I am of the view that it is in in the interests of the parties that a reserve price be set.

[33] It was contended by the applicant at the hearing of the application that in the event a reserve price is set, it should be an amount of R1,450,000.00, which reserve price will more of less account for the forced sale value of the property less the arrear amount owed to the City of Johannesburg (for which a prospective purchaser would be liable). The respondent on the other hand argued that if a reserve price is set, the market value of the property should be taken as the reserve price. In my view, the approach suggested by the applicant seems to be more realistic and pragmatic.

[34] It was lastly suggested in argument on behalf of the applicant that the warrant of execution may be suspended for a period of three months. In view of what I have already stated, I am inclined to agree with this suggestion.

In the result judgment is granted in favour of the applicant against the respondent for:

1. Payment of the amount of R2,494,517.47 (TWO MILLION FOUR HUNDRED AND NINETY FOUR THOUSAND FIVE HUNDRED AND SEVENTEEN RAND AND FORTY SEVEN CENTS) in respect of Claim 1;

2. Interest to date of payment at the rate of 6.9% per annum, calculated daily and compounded monthly from 19 June 2020;

3. Payment of the sum of R30,667.47 (THIRTY THOUSAND SIX HUNDRED AND SIXTY SEVEN RAND AND FORTY SEVEN CENTS) in respect of Claim 2;

4. Interest to date of payment at the rate of 7.25% per annum, calculated daily and compounded monthly from 19 June 2020;

5. The immovable property described as:

ERF [….]., PROVINCE OF GAUTENG, IN EXTENT 991 (NINE HUNDRED AND NINETY ONE) SQUARE METRES;

HELD BY DEED OF TRANSFER NUMBER T[....]; SUBJECT TO SUCH CONDITIONS AS SET OUT IN THE AFORESAID TITLE DEED

situated at [….] Johannesburg (“the immovable property”), is hereby declared executable;

6. The registrar is authorised to issue a writ of execution against the immovable property, which writ shall be suspended for period of three months from date of issue;

7. A reserve price of R1,450,000.00 (ONE MILLION FOUR HUNDRED AND FIFTY THOUSAND RAND) is hereby set in terms of Rule 46(9)(a);

8. Should the reserve price set in terms hereof not be achieved at a sale in execution, the provisions of Rule 46A(9)(c), (d) and (e) will apply;

9. The respondent is to pay the applicant’s costs of the application on a scale as between attorney and client.

YVAN COERTZEN

ACTING JUDGE OF THE HIGH COURT

Date of hearing: 18 June 2020

Delivered:

This judgment was handed down electronically by circulation to the parties’ legal representatives by email and by uploading the judgment to the digital CaseLines system which utilised in this division. The date and time for hand-down is deemed to be at 10h00 on 7 July 2020.

Appearances:

Counsel for the applicant: Adv J van der Merwe

Instructed by:

Ivan Pauw & Partners Attorneys

Counsel for the respondent: Adv L Ntshangaze

Instructed by:

Mojapelo Attorneys Incorporated