Nedbank Limited v Lateral Support 102 CC and others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Mashile J
• Judgment Date: 07 June 2023
• Citation: 2023 JDR 2049 (MN)
• Hearing Date: 07 June 2023
• Docket Number: 193/2022
• Court: Mpumalanga Division, Mbombela

Mashile J:

INTRODUCTION:

[1]

In a claim emanating from the First Respondents' failure to service its banking facilities with the Applicant, this Court per Ratshibvumo J granted summary judgment on 20 June 2022 against the Respondents. Following the judgment, the Applicant launched this application, which is in terms of Rule 46(1)(a)(ii) and Rule 46A of the Uniform Rules of Court ("the Rules"). The application seeks to have the immovable property of the First and Second Respondents, over which the Applicant has registered a mortgage bond in the sum of R1 500 000.00, declared especially executable and for the issuing of a warrant of execution respectively. The Application is opposed by the Respondents.

[2]

The immovable property sought to be declared especially executable and over which it is prayed a warrant of execution should be authorised and issued is described as:

Erf 36 Wild Fig Country Estate Township, Registration Division J.U.; Province of Mpumalanga, Measuring 1, 4423 (ONE COMMA FOUR FOUR TWO THREE) Hectares, Held by Deed of Transfer Number T2048/2012 ("the property").

[3]

Additionally, the Applicant seeks an order in terms of Rule 46A determining whether or not the property shall be sold in execution without a reserve price alternatively, with a reserve price fixed by the Court.

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FACTUAL BACKGROUND:

[4]

Despite the factual matrix being largely a matter of common cause, a terse description is nonetheless central to place the outcome hereof in its proper perspective. On 1 July 2020, the Applicant and the First Respondent concluded a banking Facilities agreement ("the agreement"). As security for the agreement, the 2nd & 3rd Respondents entered into unlimited suretyship and provided a covering mortgage bond over the property in the sum of R1 500 000.00. The First Respondent failed to service the agreement in consequence of which legal proceedings were instituted for the recovery of the amount due. Ultimately, the Applicant obtained a monetary judgment on 20 June 2022 against the Respondents.

[5]

Attempts to settle the amount owed to the Applicant were made but negotiations either collapsed or, where successful, the Respondents defaulted again resulting in failure to pay the Applicant. Prior to this application, the Applicant first attached the Respondents' movable assets. These efforts were in vain as the value of the movable assets attached amounted in all to approximately R57 500.00, which then fell far below the amount required to settle the amount that was due at the time.

ASERTIONS ADVANCED BY THE PARTIES:

[6]

The Respondents have argued that the Rule 46 application does not comply with the requirements of its nature. The Second Respondent, the deponent to the founding affidavit, adds that he does not remember signing Annexure "A", the agreement, at the time and place indicated. The amounts of the indebtedness and claims have been highly inflated.

[7]

The Respondents assert that the municipal valuation is irrelevant and that the market evaluation is at R9 000 000.00. The Applicant's objective in launching these proceedings, they say, is its insatiable yearn to lay its hands on the property at all costs. The reserve price ought to be set at 70% of the market value for there to be fairness and

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justice. Additionally, the disparity between the debt and the value of the property is so vast that it renders the former inconsequential. As such, the Applicant should not be countenanced to proceed with this application in terms of Rule 46A.

[8]

The Applicant contends that case authority expects it to have complied with the following, which it submitted it has, to the extent possible, prior to launching this kind of application:

8.1

All the rules of this Court;

8.2

Whether there are other reasonable ways in which the judgment debt can be paid;

8.3

Whether there is any disproportionality between execution and other possible means to exact payment of the judgment debt;

8.4

The circumstances in which the judgment debt was incurred;

8.5

Attempts made by the judgment debtor to pay off the debt;

8.6

The financial position of the parties;

8.7

The amount of the judgment debt;

8.8

Whether the judgment debtor is employed or has a source of income to pay off the debt;

8.9

Any other factors relevant to the particular case.

ISSUES:

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[9]

From the above, it is apparent that this Court is expected to determine whether the Applicant has made a case entitling it to the relief it seeks. Has the Applicant addressed all the factors arising in the cases of Gundwana v Steko Development CC and Others [1] , put differently, has the Respondent made a case that will enable this Court to decline the relief that the Applicant seeks?

LEGAL FRAMEWORK AND APPLICATION:

[10]

The starting point should be the citation of Rule 46(1)(a)(ii) and 46(a). In the order listed aforesaid, these Rules provide:

"46.

Execution — immovable property. — (1) (a) Subject to the provisions of rule 46A, no writ of execution against the immovable property of any judgment debtor shall be issued unless—

(i)

a return has been made of any process issued against the movable property of the judgment debtor from which it appears that the said person has insufficient movable property to satisfy the writ; or

(ii)

such immovable property has been declared to be especially executable by the court or where judgment is granted by the registrar under rule 31 (5)." And

"46A.

Execution against residential immovable property. — (1) This rule applies whenever an execution creditor seeks to execute against the residential immovable property of a judgment debtor.

(2)

(a)

A court considering an application under this rule must—

(i)

establish whether the immovable property which the execution creditor intends to execute against is the primary residence of the judgment debtor; and

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(ii)

consider alternative means by the judgment debtor of satisfying the judgment debt, other than execution against the judgment debtor's primary residence.

(b)

A court shall not authorise execution against immovable property which is the primary residence of a judgment debtor unless the court, having considered relevant factors, considers that execution against such property is warranted.

(c)

The registrar shall not issue a writ of execution against the residential immovable property of any judgment debtor unless a court has ordered execution against such property."

[11]

Prior to proceeding with this application for especially declaring the property of the Second and Third Respondent especially executable, it is apparent that the Applicant has adhered to the provisions of the rules of this Court governing the procedure. It is also not the case of the Respondents that proper procedure was not followed.

[12]

Attempt at settling the debt were made but have not been successful as the Second and Third Respondents simply and probably because of lack of funds, did not pay resulting in the Applicant embarking on foreclosure of the property. It is reasonable to state that there does not seem to be other ways in which the debt can be settled without following this current route. It is necessary to add that prior to launching this application, an attempt to execute on movable was made but the amount that could be realised came far below the amount owed by the Respondents.

[13]

It is difficult to assess disproportionality in this instance because this Court know very little about the financial positions of the Second and Third Respondents. For example, the Court is in the dark on whether or not the Respondents own other properties that they can sell to liquidate their indebtedness to the Applicant. All that is clear is that other than the current mortgage bond, there is no other encumbrance over it. Since the market value of the property is around R9 000 000.00, the equity in it is fairly substantial, which may help the Second and Third Respondents to...