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Firstrand Bank Ltd v Tyrer (4002/2011) [2012] ZAECGHC 18 (24 April 2012)

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IN THE HIGH COURT OF SOUTH AFRICA

EASTERN CAPE DIVISION – PORT ELIZABETH



Case no: 4002/2011

Date Heard:15/03/12

Date Delivered:24/04/12


In the matter between:


FIRST RAND BANK LIMITED …..........................................APPLICANT


and


ROBERT FREDERICK TYRER …........................................RESPONDENT

JUDGMENT


SMITH J:


[1] The Plaintiff applies for summary judgment against the Defendant for the payment of R300 235.43 and an order declaring certain immovable property executable. The Plaintiff’s civil action arises from a written mortgage bond agreement concluded on 13 February 2008, in terms whereof the Defendant borrowed an amount of R292 500.00 from the Plaintiff upon security of a mortgage bond which was registered over the Defendant’s immovable property.


[2] The Plaintiff averred in its particulars of claim that the Defendant had failed to make punctual payments of the instalments on the due date and that he was therefore in default. It avers further that the Plaintiff was entitled, in terms of the written agreement, to claim the full outstanding amount and to rely on the security provided by the bond.


[3] The Defendant has opposed the application on various grounds, inter alia, that the summons was issued prematurely in that the Plaintiff had failed to give written notice requiring him to rectify the default within a period of 10 days as required in terms of the written agreement.


[4] The relevant portion of clause 4.3 of the written agreement provides as follows:

... Subject to the provisions of the Act, including any subsequent amendments thereto or any other applicable legislation, should the Customer be in default under this agreement, then all amounts whatsoever owing to the Bank shall forthwith be payable in full and the Bank may institute proceedings for the recovery thereof and obtain an order declaring the Property executable.”



[5] The circumstances under which the customer is deemed to be ‘in default’ are circumscribed as follows in terms of clause 4.26 of the agreement:

Any of the following will place the Customer in default of this agreement if the Customer does not rectify the said default within 10 (ten) days from the delivery of the written notice from the Bank to do so-


4.26.1 If the Customer fails to pay any amount due in terms of this agreement or any other amount due to the Bank in respect of any liability of whatsoever nature to the Bank on the due date; or


4.26.2 Commit a breach of any provision of this agreement whether such breach is material; or


4.26.3 If the amount owing by the Customer to the Bank exceeds the capital amount.”



[6] It is common cause that the Plaintiff did not give notice in terms of the aforesaid provision.


[7] Mr Richards, who appeared for the Plaintiff, submitted that the failure by the latter to give the aforesaid notice did not preclude it from issuing summons which effectively accelerated payment of the full outstanding amount because the summons in effect constituted the required notice.


[8] I cannot agree with this argument. The agreement explicitly and unambiguously stipulates that the outstanding balance shall only become due and payable if the customer is in default. It is only then that the Bank may institute proceedings for the recovery thereof and obtain an order declaring the mortgaged property executable. In terms of clause 4.26 a customer is only regarded to be ‘in default’ if he or she fails to comply with the written notice contemplated in the said clause.


[9] Any legal proceedings instituted prior to the customer being placed in default as defined in the agreement are premature and improper.

(Henriques and Another v Lopes 1978 (3) SA 356 (WLD); and SA Bank of Athens LTD v Solea and Others 1977 (2) SA 612 (WLD))


[10] In the light of my findings in respect of this ground I do not deem it necessary to deal with the other grounds advanced by the Defendant.


[11] I am, for the aforementioned reasons, of the view that the application for summary judgment cannot succeed.


[12] In the result the application for summary judgment is dismissed with costs.


­________________________

J.E SMITH

JUDGE OF THE HIGH COURT




Appearances

Counsel for the Plaintiff : Mr Richards

Attorney for the Plaintiff : Heyns & Partners

6th Floor, Block B

BSE Building

BELLVILLE

(Ref: W ROBERTSONS)


C/o: McWilliams Elliot Inc

83 Parliament Street

Port Elizabeth

Ref: E Murray/KK/z43716


Counsel for the Defendant : Mr Smith

Attorney for the Defendant : Van Der Hoven Attorneys

C/o: Burmeister De Lange & Soni

29 Mount Croix

PORT ELIZABETH

6001

Ref: N. Swanepoel/ EF/MAT17735/T18

Tel: 041 373 9693