Nedcor Bank Ltd and Another v Gcilitshana and Others

• Jurisdiction: South Africa
• Judge: Erasmus J
• Judgment Date: 26 June 2003
• Docket Number: 2571/01
• Hearing Date: 25 April 2003
• Counsel: G Goosen for the applicants. First respondent in person. No appearances for the second and third respondents.
• Court: South Eastern Cape Local Division

Erasmus J: E

Introduction

[1] The subject of the application before Court is the criminal proceedings instituted in terms of s 7 of the Criminal Procedure Act 51 of 1977 by first respondent against the two applicants in the court of the second respondent. Such proceedings are commonly F termed a private prosecution. The applicants seek relief in the form of an order declaring null and void, alternatively setting aside, the summons issued in the matter; further, an order interdicting and restraining first respondent from proceeding with the prosecution, alternatively setting aside and striking out charge 4; and, finally, costs. The application is opposed, only by the first respondent, who is the prosecutor in the private prosecution. (In view of the G confusion that could arise from the different capacities which the various parties have in these and in the magistrate's court proceedings, I refer - where convenient - to them also by name; viz, first applicant also as Nedcor; second applicant also as Mr Laubscher or Laubscher; and, first respondent, also as Mr Gcilitshana or Gcilitshana.) H

[2] The charges involve four counts of alleged contravention of s 10(4) of the Usury Act 73 of 1968, it being alleged in each count that the two accuseds had failed to comply with the provisions of s 10(2) of that Act. (Later in the judgment, I give more detail of these charges.) I

[3] A number of statutory provisions are relevant to the enquiry. For ease of later reference, I quote here the following:

Section 10(2) of the Usury Act:

'On a written demand by a borrower or a credit receiver or a lessee and against payment of an amount prescribed by the Minister, a money lender, excluding the J

Erasmus J

holder of a debenture, or credit grantor or lessor shall, at any time during the currency of an agreement in A connection with a money lending transaction or a credit transaction or a leasing transaction, furnish to such borrower or credit receiver or lessee or to any person named in such demand, a true copy of the instrument of debt concluded in connection with such transaction and a statement signed by the moneylender or credit grantor or lessor or his duly authorised representative, setting forth - B

(a)

the amount of the principal debt which was owing by the borrower or credit receiver or lessee at the time of the conclusion of the transaction;

(b)

if applicable, the sum of any amounts referred to in ss 5(1)(b) or 5A(1) actually paid out;

(c)

the amount of the finance charges levied in respect C of the transaction;

(d)

the sum of the amounts referred to in paras (a), (b) and (c);

(e)

the annual finance charge rate at which finance charges are payable;

(f)

the total amount paid off in respect of the principal debt and finance charges and, if applicable, in respect of the amounts referred to in para (b), and the date and amount of every separate payment made by the borrower or credit receiver or lessee in connection with the transaction; D

(g)

the outstanding balance of the principal debt; and

(h)

the total amount referred to in s 4(1)(a):

Provided that in the case of a money lending transaction in terms of a credit card scheme the moneylender concerned shall not be obliged to set forth in such statement any information in respect of any loan already repaid in full on the date of the written demand for such statement.' E

Section 10(4) of the Act:

'If a moneylender or a credit grantor or a lessor to whom a demand has been made in terms of ss (2), fails without reasonable cause to comply therewith within seven days after the demand has been received by him, he shall be guilty of an offence.' F

Section 7 of the Criminal Procedure Act:

'(1) In any case in which an Attorney-General declines to prosecute for an alleged offence -

(a)

any private person who proves some substantial and peculiar interest in the issue of the trial arising out of some injury which he individually suffered in consequence of the commission of the said offence; G

(b)

. . .

(c)

. . .

(d)

. . .

may, subject to the provisions of s 9, either in person or by a legal representative, institute and conduct a prosecution in respect of such H offence in any court competent to try that offence.

(2) (a) No private prosecutor under this section shall obtain the process of any court for summoning any person to answer any I charge unless such private prosecutor produces to the officer authorised by law to issue such process a certificate signed by the Attorney-General that he has seen the statements or affidavits on which the charge is based and that he declines to prosecute at the instance of the State.

(b) . . .

(c) . . .

(d) . . . .' J

Erasmus J

The facts A

[4] The facts and circumstances giving rise to the prosecution are for the most part common cause between the parties. Those aspects that are in dispute shall be approached by the Court on the basis of the general principles relating to opposed applications, as fully and authoritatively stated in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E - 635C, with some B deference to the robust, common sense approach favoured in Soffiantini v Mould 1956 (4) SA 150 (E) at 154G - H.

[5] On 11 August 1986, Mr Gcilitshana entered into a building loan agreement with the SA Permanent Building Society. A C mortgage bond was registered over property owned by him as security for the money advanced to him under the agreement. The building society, so it seems, subsequently became the Permanent Bank Ltd and then The Peoples' Bank Ltd, a division of Nedcor Bank Ltd. The precise mechanism and details of the changes in name and status are unclear, D but do not concern us here. It is common cause, for present purposes, that at all times relevant to this application, Gcilitshana was the debtor and the mortgagor under the mortgage bond held by Nedcor and its predecessors over his property. E

[6] At some time, Gcilitshana fell into arrears on his bond repayments, resulting (presumably) in a judgment, and the advertisement of the sale in execution of the mortgaged property. At this point, then, there happened on the scene a deus ex machina in the person of one John Peter Molyneux Killik. F

[7] Killik at one time operated as Finrec, which was the trading name of Huntlam (Pty) Ltd. In his affidavit, filed in the matter, he states that he is now manager of Finrec Trust no: T6768, trading as Fintrust. It is convenient, and not inappropriate, to refer to these entities as 'Killik'.

[8] The founding affidavit is that of Richard Charles Laubscher, who is the Chief Executive Officer of Nedcor. He states that Killik G conducts business as an interest recalculator in respect of finance and interest charges levied by financial institutions on loans and other finance agreements. These investigations are conducted to establish whether the charges are in accordance with legislation and regulations. H Killik then offers the client the prospect of being able to resist foreclosure and execution. The modus operandi employed by Killik is one in which work is solicited by way of direct approaches to persons who face the sale in execution of their immovable property. The deponent attaches a letter sent by Killik to such a person, the contents are as follows:

'Re: Sale in execution (High Court - case No: 1139/98) I

We have noticed from the local newspaper, that your home is going to be sold in public auction on Friday, 11 February 2000.

Should you not wish to loose (sic) you home, please contact the writer as soon as possible. We guarantee you that we can assist you and stop the sale of your property by your creditors.

Please do not wait to the last moment before seeing me.' J

Erasmus J

[9] Laubscher further states that the investigation involves, in the first instance, the delivery of a demand in terms of s 10(2) of A the Usury Act [3]. Such demand, he says, almost invariably carries with it a threat of criminal prosecution. Upon failure to comply with the demand within the stipulated seven-day period, a criminal charge is laid against the financial institution in terms of s 10(4) of the Act. Killik operates through the present attorneys of record, R P Totos and Associates (Totos). B

[10] The applicants further rely on the affidavit of Phillip Barkly Shaw, an attorney of this Court. He confirms the modus operandi of Killik and Totos, as set out by Laubscher. He states that over a number of years he has become aware of numerous instances in which Killik and Totos have represented judgment debtors in court C proceedings seeking to stay sales in execution.

[11] Killik has filed an affidavit supporting the opposition of first respondent to the application. He states that the description D given of his business is a reasonable one. He states that his investigations concern the legitimacy of charges raised against mortgage bond accounts (such as insurance premiums debited illegally to clients' accounts, overcharges on home loan accounts, etc). Legitimacy is determined with reference to the Usury Act and other relevant legislation. The investigation of such charges is a legitimate E occupation and is in the public interest. He addressed letters...