Standard Bank of South Africa Limited v van der Merwe and Another (4757/2019) [2020] ZAFSHC 124 (25 June 2020)

IN THE HIGH COURT OF SOUTH AFRICA,

FREE STATE DIVISION, BLOEMFONTEIN

Case number: 4757/2019

In the matter between:

THE STANDARD BANK OF

SOUTH AFRICA LIMITED Applicant

and

SAREL JOHANNES MARTHINUS

VAN DER MERWE 1st Respondent

MARIA SUSANNA ELIZABETH

VAN DER MERWE 2nd Respondent

HEARD ON: 4 JUNE 2020

JUDGMENT BY: LOUBSER, J

DELIVERED ON: 25 JUNE 2020

[1] This is an application for summary judgment against the respondents, who are married to one another in community of property, in the sum of R 1 024 626-15, together with interest thereon. At the hearing of the application, counsel for the applicant informed the court that the applicant is not persisting with the further order sought in the application, namely that the property concerned be declared executable.

[2] The debt of the respondents arises from four home loan agreements concluded by the parties during the period 10 November 2005 to 14 November 2008. These home loans were secured by separate mortgage bonds registered over certain immovable property situated at Sasolburg in favour of the applicant. The existence of the loans and the mortgage bonds are not disputed by the respondents.

[3] In the summons, the applicant states that the respondents are in breach of the terms and conditions of the home loan agreements and that they have failed to pay the monthly instalments. As at 27 August 2019, the arear amount owing was R 58 900-77, while the total amount which became due and payable in terms of the loan agreements, amounted to R 1 024 626-15 together with interest. The respondents deny these allegations in their plea, saying that they have entered into a debt rearrangement with the applicant on 30 March 2010, having been placed under debt review. In terms of the rearrangement they had to pay monthly instalments of R 3 395-45, which they had duly paid. They further pleaded that where they had extra money available, they had paid a higher instalment. They consequently deny that the account as rearranged is in arrears. The respondents further plead that the total amount now claimed “appears to be excessive”.

[4] In the summons, reference is also made to the debt review, but it is stated that the plaintiff has terminated the review by notice in terms of Section 86(10) of the National Credit Act 34 of 2005 on 3 September 2019. This is specifically admitted by the respondents in their plea. They say, however, that they have never received

statements from the bank.

[5] In a counterclaim filed by the respondents, they allege that the amount claimed is defective in that it appears that an excessive

amount of interest and other charges have accumulated. They pray in the counterclaim for an order that the applicant renders a full account up to 31 January 2020, that the account be debated and that payment be made of whatever amount appears to be due to them.

[6] In the affidavit filed by the applicant in support of summary judgment, it is alleged that the plea and the counterclaim are vague and embarrassing, that it provides no defence and that it does not raise any issues for trial. In particular, the applicant says that the respondents failed to advance any reason why the original home loans are not binding subsequent to the termination of the respondent’s debt review application. I assume that the applicant hereby intimates that the original instalments were again payable after the termination of the rearrangement on 3 September 2019. In addition, the applicant attached to its affidavit the statements reflecting the transactions in respect of the home loans from 21 February 2006 to 7 February 2020. It appears from these statements that the respondents were indeed paying R 3 395-45 per month since the rearrangement agreement in March 2010, but it is also clear that they failed to pay at the end of a number of subsequent months. On a number of occasions the respondents have paid a few hundred Rands more than what they were obliged to pay in terms of the rearrangement agreement.

[7] In their opposing affidavit, the respondents repeat that the amount claimed, “appears excessive”. They further state that they have duly made payment in terms of the rearrangement agreement, without providing the court with the exact figures to substantiate this defence. Nor did the applicant provide the Court with any figures to show that the respondents were in default with their rearrangement payments at the time when the rearrangement agreement was terminated. The Court itself therefore had to calculate the true position of the respondents to establish whether they were in arrears at the end of August 2019.

[8] It appears that the respondents were supposed to pay a total of R 387 081-30 during the period 30 March 2010 to 31 August 2019 on the basis of monthly instalments of R 3 395-45. A calculation of the instalments actually paid by the respondents during the period in question, as per the statement attached by the applicant, shows that they have paid a total of R 377 476-95. This is some R 10 000 less than what they were supposed to pay under the rearrangement agreement.

[9] The authorities are clear that where a consumer defaults under a rearrangement agreement, no notice under Section 86(10) or under Section 129(1) is required before a credit provider can issue summons. In such a case, the common law should run its course, and the creditor would be entitled to enforce the terms of the loan agreement.[1] At the hearing of this application a debate ensued whether it was appropriate for the applicant to terminate the rearrangement agreement under Section 86(10) or not, but in view of the fact that no notice in terms of the section was required in any event, this Court need not consider that

question.

[10] It needs mentioning that, at the hearing of the application, the applicant handed in (by agreement) a full transaction record showing the payments made by the respondents up to 25 May 2020. In terms thereof, it is clear that the respondents continued to pay more than the required amount under the rearrangement per month. On 24 January 2020 they even paid an instalment of R 6 000-00. Unfortunately, those increased instalments fell far short of the instalments they ought to have paid in terms of the home loan agreements after the termination of the rearrangement agreement.

[11] When it comes to the granting or not of summary judgment, Rule 32(3)(b) provides that the defendant may satisfy the court by affidavit or by oral evidence that he has a bona fide defence to the action. The rule further provides that such affidavit or evidence “shall disclose fully the nature and grounds of the defence and the material facts relied upon therefore”. Needless to say, the defence raised by the respondents that the amount claimed is defective in that it “appears” that an excessive amount of interest and other charges have accumulated, does not meet the requirements of the rule. Such a vague and unsubstantiated allegation can never constitute a bona fide defence.

[12] The respondents further complain in their opposing affidavit that they have never received any statements from the applicant,

apparently to support their contention that the quantum of the amount claimed, appears to be excessive. There are two problems with this defence of no statements. Firstly, by the time the respondents have made their opposing affidavit, the applicant had already provided them with the full record of all the transactions up to 7 February 2020. Secondly, the home loan agreements entered into between the parties expressly stipulate that statements would be provided in March and in September of each year. Should a statement not be received by the respondents, they have to contact the bank. Further it is provided by the agreements that the non-receipt of a statement would not entitle the respondents to refuse payment of any amount owing to the applicant.

[13] In the counterclaim, the respondents move for an order for the provision of a statement and the debatement of that statement. As already mentioned, the respondents were already provided with a full statement when the summary judgment proceedings were commenced with. Since the respondents have not provided the court with any specifics regarding the complaints relating to interest and other charges, they do not seem to have any reasonable prospect of success during any process of debatement, let alone of persuading the applicant that there is in fact an amount owing to them. The counterclaim therefore has no reasonable possibility of succeeding in the trial action.

[14] The respondents mention in the opposing affidavit that they have instructed their attorney to amend their plea for the debt review to be reinstituted. At the time of the hearing of the application, there had not been a notice for such an amendment as yet. In Changing Tides 17 (Pty) Ltd v Scholtz and Another (2010) ZAECPEHC 3 (ECP) the following was indicated in respect of the reinstatement of a debt review:

“Clearly, the court will only be able to order a resumption (of the debt review) if it is appraised of sufficient facts to justify such resumption.”

The court went further to say that if a consumer, in opposition to an application for summary judgment, requests the court to order that a terminated debt review resume and in his opposing affidavit alleges sufficient facts to justify such an order, together with supporting documentation and a confirmatory affidavit by the debt counsellor, the court may order such a resumption.

[15] In the present case, the respondents have not provided the court with any sufficient detail to justify a resumption order. Their total liabilities, the income and the proposal which the debt counsellor has made, is not before the court. There is also no formal application before me to adjourn the application in order to allow the respondents an opportunity to come forward with sufficient facts by which a resumption order and further negotiations with the applicant may become possible.

[16] In this respect I am mindful of what to the Supreme Court of Appeal has stated in the Jili - case, supra, at 591C-D:

“The discretion (of a court) should not be exercised against the plaintiff so as to deprive it of the relief to which it is entitled. Where it is clear from the defendant’s affidavit resisting summary judgment that the defence which has been advanced carries no reasonable possibility of succeeding in the trial action, a discretion should not be exercised against the granting of summary

judgment”.

[17] I am of the view, unfortunately, that in this case I should not exercise my discretion against the plaintiff where the defences are based on mere speculation of conjecture. There is no reasonable possibility that the defence raised would succeed in the trial

action. I’ve given serious consideration, mero motu, whether to grant the respondent an opportunity to provide an argument that the debt review should be resumed. Having regard to all the circumstances of the case, however, I have decided against it. To grant the respondents a further opportunity to attempt to get their affairs in order, will only be at the expense of the applicant, and would not be in the interest of justice.

[18] The following orders are therefore made:

1. Summary judgment is granted against the respondents for payment of the amount of R 1 024 626-15, plus interest on the amount at the rate of 10% per annum from 27 August 2019 to date of payment.

2. The respondents are ordered to pay the costs of suit on a party and party scale.

_________________

P.J. LOUBSER, J

For the Applicant: Adv. H.J. van der Merwe

Instructed by: Strauss Daily Inc.

Bloemfontein

For the Respondents: Adv. J.J. Buys

Instructed by: Viljoen Attorneys, Pretoria

C/o Willie J Botha Inc.

[1] First Rand Bank v Grobler (Free State Division Case No. 6446/2010, (unreported) First Rand Bank v Fillis 2010 (6) SA 565 (ECP; Jili v First Rand Bank Ltd t/a Wesbank 2015 (3) SA 586 (SCA); Ferris v Firstrand Bank 2014 (3) SA 39 (CC)