Nedbank Limited v Finin and Others (70232/2013) [2014] ZAGPPHC 673 (1 September 2014)

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

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NUMBER: 70232/2013

DATE: 1 SEPTEMBER 2014

NOT REPORTABLE

NOT OF INTEREST TO OTHER JUDGES

In the matter between:

NEDBANK LIMITED.................................................................................................................APPLICANT

and

FININ ADOLFO...............................................................................................................1ST RESPONDENT

FININ ROMANY BERNADETTE..................................................................................2nd RESPONDENT

JUDGMENT

MODIBA AJ:

1.

This is an application for payment of a sum of R1, 109,820.63, an order declaring the Erf [...] Kensington Johannesburg to be specially

executable and other ancillary relief. The applicant’s claim is based on a written home loan agreement and a written mortgage loan agreement entered into between the parties, in terms of the applicant granted a loan in the amount of R1, 243,312.07 to the respondents. The loan was secured by a mortgage bond against the said property.

2.

At the hearing of this application, counsel for the applicant handed to the court a certificate of balance issued by the applicant in terms of which as at 22 August 2014, the amount of arrears and interest was R592, 185.10. Counsel for the applicant submitted that the period of arrears is 62 months.

3.

Only the second applicant opposed the application. The basis for her opposition is as follows:

3.1 in terms of a divorce settlement agreement between her and the first respondent, she is absolved from paying the said loan;

3.2 in terms of section 26 of the Constitution, she may not be evicted from her home without a court order made after considering all relevant circumstances as set out in FirstRand Bank Ltd v Folscher and Another 2011 (4) SA 314 (GNP) and Van Rooyen v Stoltz and Others [2004] ZACC 25; 2005 (2) SA 140 (CC) 2005.

4.

In her answering affidavit, the second respondent alleged that the mortgaged property is her primary residence, and that in terms of a divorce settlement agreement entered into between her and the first respondent, it is the first respondent’s responsibility to pay the mortgage loan.

5.

Counsel for the applicant submitted that although the settlement agreement was made an order of court, it is not binding against the applicant because it was not party the divorce action. The settlement agreement can only be binding on the applicant by consent. The first respondent failed to allege that the applicant has consented to the delegation of liability to the first respondent. Therefore this ground of defence stands to fail.

6.

In recent years, our courts have passed several judgments granting judicial oversight in applications where a bank seeks to execute

against a bonded property. The intention is to protect owners of mortgage property used as their primary residence, against abuse of the foreclosure process by banks. The Folscher judgement sought to be relied on by the second respondent set out several factors to be taken into account when considering an application by a bank for an order declaring the mortgaged property specially executable. Save for mentioning that the bonded property is her primary residence, the second respondent failed to put before court factors to be considered by the court in line with these judgements.1 The fact the mortgaged property is the second respondent’s primary residence does not alone warrant refusal of the relief sought by the applicant. She has failed to place information before this court as set out in the Folscher case, which warrants a finding that the applicant is abusing the foreclosure process.

7.

The applicant granted the respondents’ credit to purchase the above property against the security of a bond registered over the property. In the absence of any extra-ordinary circumstances, in the event of default, the applicant is entitled to obtain judgment in the amount owed to it by the respondents, and to enforce the judgment by executing against the bonded property. As the court stated in the Folscher case, the relationship between owners of immovable property and banks that provide them finance to acquire immovable property is a mutually beneficial relationship. The creditor advances such finance on the strength of the security registered against the property. If the creditor is no longer able to enjoy the assurance of bond security, this would jeopardise access to housing for persons who do not qualify for state subsidy. A debtor ought to honour his or her obligation in terms of the agreement between her and the bank. Where a debtor is unable to pay, unless there are extraordinary circumstances that warrant a debtor protection from foreclosure, a bank is entitled to execute against the property to recover the money loaned to a debtor. Even if extra-ordinary circumstances exist, a debtor may not continue enjoying the benefits of the loan in perpetuity without payment.

8.

The respondents are 62 months in arrears. It is apparent from the second respondent’s answering affidavit that she cannot afford the bond repayments. The first respondent who in terms of the divorce settlement agreement assumed responsibility to pay the bond has abdicated this responsibility for a period 5 years. Both respondents remain liable to the applicant because the second respondent was never discharged from the debt. The applicant cannot be deprived of his payments in perpetuity. Section 26 of the Constitution as well as the Folscher judgement were never intended to protect a debtor from foreclosure under these circumstances.

9.

In my view the circumstances of the applicant is entitled to an order as prayed for in the notice of motion.

I therefore make the following order:

1. The respondents are ordered to jointly and severally, the one paying the other to be absolved, to pay to the applicant:

1.1 the amount of R1,109,820.63;

1.2 interest on the said amount at the rate of 8.50% per annum, calculated and capitalised monthly in arrears from 31 July 2013 to date of final payment;

1.3 the costs of this application on an attorney and client scale;

1.4 erf [...] Kensington Township is declared specially executable for the aforesaid amounts including the costs of the execution.

MODIBA AJ

Counsel for the Applicant: Mr de Villers

Instructed by: Enderstein & van der Merwe Inc

For the Respondent: Ms Y van Aartsen

Instructed by: Chatiras Attorneys

Date of hearing: 26 August 2014

Date of judgment: 1 September 2014

1Standard Bank of South Africa ltd v Sanderson and others 2006 (2) SA 264 (SCA).