Standard Bank of South Africa Limited v Molusi and Another (32613/2020) [2021] ZAGPPHC 713 (4 August 2021)

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

CASE NO: 32613/2020

Date of hearing:4 August 2021

Date of judgment: 4 August 2021

In the matter between

THE STANDARD BANK OF SOUTH AFRICA

Applicant

LIMITED

and

S Z MOLUSI AND ANOTHER

Respondent

J U D G M E N T

(EX TEMPORE)

VUMA AJ:

[1] This opposed application for summary judgement including a prayer that the property in question be declared to be specially executable served before me in the unopposed motion roll. The issues giving rise to the application flow from the common cause facts which, inter alia, include the respondents’ liability under the home loan agreement as entered into between the parties during 2007.

[2] Of utmost importance, in my view, is the fact that in resisting this application the respondents through their counsel Mr Tee have in their Heads of Argument raised three defences. Mr Rakgoale for the applicant submitted that none of such defences raise any triable issue.

[3] The following are the three defences raised by the respondents and the concomitant reply thereto by counsel for the applicant:

3.1 There was a lack of personal service;

3.2 There was a settlement agreement; and

3.3 The issue of the constitutional safeguards.

[4] Re 3.1 above, Summons was served at the domicilium address of the respondents as appears in part A of the parties’ home loan agreement. The respondents argued that they did not reside at the domicilium address at the time of the service of the processes (Section 129 notice and Summons) and that the applicant was well aware of this fact even then and that thus the pleadings should not have been served thereat. They further deny that same is their chosen address.

SUBMISSIONS BY MR RAKGOALE FOR THE APPLICANT

Mr Rakgoale argued that the home loan agreement makes provision for the domicilium address for notice in clause 17.1. He further argued that the address appearing below herein is the respondents’ chosen physical and postal domicilium being [….]. Clause 17.3 of the agreement provides that the borrower/ mortgager must give at least a 14 days’ written notice to the bank should there be a change of notice address. He further refuted the contention that the respondents do not reside at the chosen domicilium, further arguing that Summons was served in terms of the address which was furnished to the applicant and that same happened to be the only address furnished to the applicant. Under the above extenuated circumstances, the issue of personal or non-personal

service becomes irrelevant, Mr Rakgoale argued.

[5] Re 3.2 above, the respondents alleged that there is a settlement agreement. Mr Rakgoale refuted this allegation, arguing that the alleged ‘settlement agreement’ amounts to nothing more than an indulgence granted to the respondents on 12 September 2020 by the applicant, which indulgence was aimed at settling the matter. This ‘settlement agreement’ (‘indulgence’) comprised of an offer made by the respondents to the applicant to make certain payments on certain terms to reduce their arrears. The applicant’s attorneys then wrote to the respondents stating that whilst a restructure of the account will be reconsidered, “In order for client to reconsider the (re)structure kindly provide us with the following documents.”

So, a total of eight documents including a motivation letter is what was required from the respondents.

A follow-up paragraph in that letter states the following: “Please take note that we shall only be able to refer the account to the CCA department for the considering of the restructuring of the account once all of the above documents have been obtained. Further thereto note that there is no guarantee that on receipt of the required documents the restructure will be approved.”

[6] The above documents were to be submitted by no later than 4 June 2021. The respondents concede on their own version that they failed to submit same. It is on this basis, inter alia, that the applicant argued that there was therefore no ‘restructuring’ settlement agreement but an indulgence, the terms of which were nonetheless not honoured by the respondents (in respect of the requested documents). Considering that the respondents sold one of their properties in Kimberley and if indeed they were serious about settling the arrears, the applicant’s counsel argued, why are they nevertheless still in arrears as per the applicant’s Certificate of Balance which remains undisputed by the respondents.

[7] Re 3.3 above, the respondents argued primarily the issue of constitutional safeguards, submitting that the applicant’s approach re domicilium clause is too formalistic.

[8] Mr Rakgoale argued that this argument was never canvassed for in the respondent’s plea and then into the answering affidavit, arguing further that the domicilium clause is in terms of the National Credit Act (NCA). He argued that to attempt to bring the constitutional approach at this stage is untenable and that the truth of the matter here are respondents who are undeniably indebted and thus cannot fulfil their obligations in terms of the mortgage bond, although the respondents raise the Covid-19 pandemic as the cause of their financial woes. The applicant also sought the special executability of the immovable property as per the suggested resale price in the sum of R2 268 818-13 (TWO MILLION TWO HUNDRED AND SIXTY-EIGHT THOUSAND EIGHT HUNDRED AND EIGHTEEN RAND AND THRITEEN CENTS).

SUBMISSIONS BY MR TEE ON BEHALF OF THE RESPONDENTS

[9] In reply, Mr Tee stated that he was going to concede 90% of Mr Rakgoale’s submissions but take a different approach from there in so far as “the constitutional safeguards” is concerned. He submitted that this matter was basically about whether a formalistic approach was to be adopted to a home contract involving a primary residence. He reiterated that the respondents were not living at the domicilium address at the time of the service of the section 129 notice. He argued that it is false that the applicant did not know the respondents’ primary residence address. Mr Tee then quoted an excerpt from a book allegedly authored by Western Cape Justice Mr Rogers regarding the scrupulous honesty with which pleadings and affidavits are to be asserted or denied.

[10] As stated above, he submitted that our Constitution is not designed to be a formalistic document, particularly in instances where you are dealing with housing. He argued that both the Constitution and the NCA are designed to get the parties to mediate right from the start to steer clear of the adversarial approach so as to avoid a winner and a loser kind of a situation. The purpose of section 129 notice is to physically get the parties together and not just to ‘domicilium’ them. The constitutional safeguard depends on mediation as enshrined in section 129 of the NCA and not on litigation. The applicant knew where the respondents were, it is contended, and that to the extent that the applicant did not pursue service of process at their residential address (my words), that “that is where the ..…. failure of the constitutional safeguards commences.” The fact that the default judgment application was served on the mortgaged property and that that is where the respondents were found is demonstrative of the applicant’s deliberate bypass provided for in section 129 of the NCA, Mr Tee further argued.

[11] Counsel for the respondents further submitted that the applicant’s argument that the new Rule 41A is not applicable given that the respondents did not want to mediate is incorrect especially when regard is had that the respondents were not aware of the served notice. He argued that the funds with which the respondents were honouring the agreed “settlement” amount came from the Kimberley property sale proceeds. He argued that by selling their Kimberley property, that in itself should have been demonstrative of the respondents’ good faith. He further argued that this should also be looked into within the context of the hindrance that caused the respondents to not be able to fulfil their home loan obligations: the covid-19 pandemic. He further submitted that but for the fact that in the very beginning the section 129 notice did not physically go to the respondents, the settlement could well have been achieved right from the beginning.

[12] The respondents refer to paragraph 3 of Full Bench of the Western Cape decision of Standard Bank v Hendricks (no full citation provided) wherein the Court allegedly held:

“In matters where leave to execute against property which might be a person’s home is sought, it was agreed that bringing notice of proceedings to the attention of the debtor by way of personal service leads to the possible resolution of a matter and can obviate the need for the matter to proceed to Court.”

[13] Lastly Mr Tee argued that given the intricacies in this matter, this matter ought to be referred to trial for oral evidence to confirm the submissions made on behalf of the respondents. He thus asked for the dismissal of the application for summary judgment with costs to be in the cause and that the respondents be granted leave to defend. Mr Tee conceded that formalistically re the home loan agreement, Mr Rakgoela had said nothing wrong.

ANALYSIS

[14] It is common cause that other than arguing on what he terms the constitutional safeguard, Mr Tee conceded to the correctness of applicant’s formalistic approach. In the result the said two defences accordingly fall away for their invalidity and in light of Mr Tee’s concession. Nevertheless I must state that from the arguments made by both counsel, I am satisfied that the section 129 notice service effected by the applicant is compliant with the Act and the home loan agreement entered into between the parties. There is not a shred of evidence adduced by the respondents to suggest and in support of their argument that it was beknown to the applicant where the respondents’ primary residence was. In the absence of any reliable corroborative evidence, especially regard being had to the respondents’ concession that they never sent a written letter to the applicant informing them of the change in their domicilium, I find that the applicant acted accordingly.

[15] In regard to the defence of the settlement agreement, I am satisfied that to the extent that the respondents

conceded to not having complied with the terms of the restructuring of the account, that no such agreement ever came into existence given that the respondents never fulfilled its suspensive conditions anyway.

[16] In regard to the constitutional safeguards as argued for by Mr Tee, I could find no ground which supports his argument that the applicant has failed to make a proper case insofar as compliance with both the NCA and the home loan agreement is concerned, even the Constitution itself. From the reading of clause 17.1 of the home loan agreement, it is evident that the respondents chose number 25 Collin Avenue, Randpark Road, Extension 13, 2194 as their domicilium. In this regard, I am satisfied that service was properly effected. To the extent that the respondents argue that the above address is not their primary (residential) address, in my view, since they never brought to the attention of the applicant their written change of domicilium letter, the issue of personal service becomes moot since it would have been practically impossible for the applicant to effect personal service to an address which was never brought to its attention. In the result, I find that this expectation, under the

circumstances, border in the illogical.

[17] Despite Mr Tee never addressing the court on the submission that he never raised the constitutional safeguard defence in his plea, I however considered the issue in the interests of justice. I still could not find anything that supports the respondents’

contention that the applicant’s approach offends the constitutional mediation-intended approach. In my view, if the respondents were truly desirous to settle the matter, they certainly would have followed through with the ‘lifeline’ (or indulgence) extended by the applicant to them for purposes of restructuring. It is common cause that they never did. In my view, there lied a mediation approach which, for reasons not placed before this court, the respondents missed. In the result, I find no triable issue in casu. In my further view, there is no issue in this matter that offends the constitutional safeguards.

[18] It is my further view that what the respondents calls an act of God in the form of the pandemic that is besieging us at the moment (the covid-19), does not exonerate them from committing to the purported restructuring arrangement between themselves and the applicant.

[19] In regard to the Full Bench decision of the Western Cape in Standard Bank v Hendricks, I am of the view that at best what is stated therein may only be relevant in so far as the costs are concerned and not the merits per se, considering that the respondents were given a period of over six months to make good on the requested documents for restructuring purposes, which they never did.

[20] It is on the above basis that I am persuaded that the applicant has made out a case that entitles it to the order it seeks, which order I am inclined to grant.

[21] In regard to the reserve price to be set by the Court, Mr Rakgoale informed the court that in fact their suggested reserve price is the sum of R3 268 818-13 and not R2 268 818-13 as previously suggested, though erroneously. Mr Tee indicated that they would agree with the reserve price being set at R3.2 Million odd.

[22]. In the result, I make the following Order:

ORDER:

1. An order in terms of the draft marked “X” is granted with R3 268 818-13 (THREE MILLION TWO HUNDRED AND SIXTY-EIGHT THOUSAND EIGHT HUNDRED AND EIGHTEEN RAND AND THIRTEEN CENTS) as the set reserve price.

L.B. VUMA

ACTING JUDGE OF THE HIGH COURT

DATE: 24 October 2021