IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE DIVISION, GRAHAMSTOWN

									CASE NO 2105/2014
									DATE HEARD: 11/12/2014
									DATE DELIVERED: 11/02/2015 

In the matter between

STANDARD BANK OF SOUTH AFRICA LIMITED		PLAINTIFF
(Registration No: 1962/000738/06)

and

MICHAEL ANTHONY BORDER					DEFENDANT

JUDGMENT

ROBERSON J:-

[1]	This is an application for summary judgment.  The plaintiff bank instituted action against the defendant for payment of the full amount owing in terms of two mortgage loan agreements, an order declaring the defendant’s  immovable property specially executable, and costs on the attorney and client scale.  The plaintiff alleged that it and the defendant entered into two loan agreements each of which was secured by way of a mortgage bond passed by the defendant in favour of the plaintiff and in terms of which the defendant’s immovable property was specially hypothecated.  The plaintiff further alleged that the defendant was in arrears with his repayments of the monies secured by the mortgage bonds, and, as provided for in the bonds, claimed the whole capital amount owing.  Copies of the loan agreements and the two mortgage bonds passed by the defendant as security for his indebtedness to the bank were annexed to the particulars of claim.  The immovable property specially hypothecated in terms of the bonds consists of erf 4084 Grahamstown, remainder of erf 4082 Grahamstown, and erf 4078 Grahamstown.

[2]	The affidavit in support of summary judgment was deposed to by one Sohini Rubykisoon.  The contents of the affidavit were as follows:
“1.	I am a senior Manager, Specialised Legal, Personal and Personal and Business Banking Credit division of the Standard Bank of South Africa, the Applicant, with business address at 9th Floor, 5 Simmonds Street, Johannesburg, 2000.
2.	I confirm that I have been duly authorised by the Applicant to institute these proceedings and to depose to this affidavit.  The facts herein contained are true and correct.
3.	I verify and confirm that I have through my position access to all the records and information in the possession of the Applicant pertaining to this matter before this Honourable Court and I am as such competent to depose of (sic) this affidavit.
4.	I have perused the records in my possession and acquainted myself with the contents thereof and therefore the facts herein contained fall within my direct knowledge unless the contrary is indicated.
5.	I can swear positively to the facts contained in the Applicant’s claim and:
	5.1	 verify the causes of action;
	5.2	confirm the correctness of all allegations made in the claim;
	5.3	confirm the amount owing by the Respondent to the Applicant as 			stated in the claim.
6.	I annex hereto marked:-
	6.1	annexure “A”, First Mortgage Bond No B60376/2006;
	6.2	annexure “B”, Second Mortgage Bond No B110453/2007
			upon which Applicant’s claim is founded.
7.	In my opinion the Respondent has no bona fide defence to the Applicant’s claim and a Notice of Intention to Defend has been delivered solely for the purpose of delay.”

[3]	 I deal now with the grounds of opposition to the application.

RUBYKISOON’S AFFIDAVIT

[4]	The defendant raised as a point in limine that Rubykisoon’s affidavit failed to comply with Rule 32 (2).  The defendant put the plaintiff to the proof of her employment with the plaintiff, and her locus standi to depose to the affidavit (saying the necessary resolution was not attached), and stated that he bore no knowledge of whether she had perused the summons, particulars of claim, and the records in the plaintiff’s possession.  He denied that the facts contained in the affidavit fell within Rubykisoon’s personal knowledge and stated that she had not set out adequately how she acquired such knowledge.

[5]	In my view it was not sufficient for the defendant merely to put the plaintiff to the proof of certain of Rubykisoon’s averments.  He raised nothing to counter those averments and there is no reason not to accept them.  With regard to Rubykisoon’s personal knowledge and ability to swear to the facts, I am of the view that her position with the plaintiff as described, together with her averment that she had access to the records and information pertaining to the matter (which one can infer she would have by virtue of her job description) and that she had perused the plaintiff’s records which were in her possession, was sufficient to establish the required knowledge to verify the cause of action and confirm the amount claimed.  Moreover, if one has regard to the defences raised in the opposing affidavit, none deny that the loan agreements were entered into and that the bonds were registered.  (See Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A) at 423H.)  

[6]	It was submitted on behalf of the defendant that Rubykisoon had failed to refer to records pertaining to the securitisation of the defendant’s debt.  The defence of securitisation will be dealt with later in this judgment but it suffices to say, and it will be apparent when I deal with this defence, that the lack of a reference to the records of the alleged securitisation of the debt has no bearing on the acceptability of Rubykisoon’s affidavit.

[7]	I deal now with the defences raised in the opposing affidavit.  Rule 32 (3) (b) requires that a defendant should satisfy the court by affidavit that he has a bona fide defence and that such affidavit “shall disclose fully the nature and grounds of the defence and the material facts relied upon therefor.”  In dealing with this requirement in Maharaj v Barclays National Bank Ltd (supra) Corbett JA said the following at 426A-F:
“Accordingly, one of the ways in which a defendant may successfully oppose a claim for summary judgment is by satisfying the Court by affidavit that he has a bona fide defence to the claim. Where the defence is based upon facts, in the sense that material facts alleged by the plaintiff in his summons, or combined summons, are disputed or new facts are alleged constituting a defence, the Court does not attempt to decide these issues or to determine whether or not there is a balance of probabilities in favour of the one party or the other. All that the Court enquires into is: (a) whether the defendant has 'fully' disclosed the nature and grounds of his defence and the material facts upon which it is founded, and (b) whether on the facts so disclosed the defendant appears to have, as to either the whole or part of the claim, a defence which is both bona fide and good in law. If satisfied on these matters the Court must refuse summary judgment, either wholly or in part, as the case may be. The word 'fully', as used in the context of the Rule (and its predecessors), has been the cause of some Judicial controversy in the past. It connotes, in my view, that, while the defendant need not deal exhaustively with the facts and the evidence relied upon to substantiate them, he must at least disclose his defence and the material facts upon which it is based with sufficient particularity and completeness to enable the Court to decide whether the affidavit discloses a bona fide defence. (See generally, Herb Dyers (Pty.) Ltd. v Mohamed and Another, 1965 (1) SA 31 (T); Caltex Oil (SA) Ltd. v. Webb and Another, 1965 (2) SA 914 (N); Arend and Another v. Astra Furnishers (Pty.) Ltd., supra at pp. 303 - 4; Shepstone v. Shepstone, 1974 (2) SA 462 (N)). At the same time the defendant is not expected to formulate his opposition to the claim with the precision that would be required of a plea; nor does the Court examine it by the standards of pleading. (See Estate Potgieter v. Elliott, 1948 (1) SA 1084 (C) at p. 1087; Herb Dyers case, supra at p. 32.)”

 ABSENCE OF ORIGINAL LOAN AGREEMENT
[8]	In his affidavit, the defendant incorporated some of the contents of his founding affidavit in his application for a postponement of the summary judgment application, which was heard on 13 November 2014.  In that affidavit he stated that on 5 September 2014, at the offices of the plaintiff’s Grahamstown attorneys, he and his attorney inspected the documents made available for inspection following his notice to produce documents.  He noted that the loan agreement documentation was not a “wet-ink” document.  (The ensuing correspondence between attorneys referred interchangeably to “agreement” and “agreements”.  It was not in dispute that there were two agreements and I shall use the plural, even where the attorneys used the singular.)  He reached this conclusion because, inter alia, the signatures had the appearance of copies, the pages of the agreements appeared fresh and untouched, unlike documents which have been handled by a number of people, and differed from the copies annexed to the particulars of claim, in that the spacing of letters, words and paragraphs differed.  He illustrated the alleged differences by attaching the first and last pages of the agreements annexed to the particulars of claim and transparencies of those inspected on 5 September 2014.  

[9]	The defendant’s attorney, Ms Carruthers, notified the plaintiff’s Port Elizabeth attorneys that the loan agreements upon which the claim was based appeared to be copies and asked when the originals would be available for inspection.  In reply she was told that the loan agreements which she and the defendant had inspected were the originals and that the application for summary judgment would proceed.  An application to compel production of the original loan agreements was then threatened.  The plaintiff’s attorney then offered to make the original agreements again available for inspection, but in the presence of the Registrar or a person designated by him, who would be required to certify that the original documents had been made available and inspected.  The defendant chose not to take up this offer because he was advised by the plaintiff’s Grahamstown attorneys that the documents again to be inspected were the same as those inspected on 5 September 2014.  He told Attorney Carruthers in an e-mail that “as they still only have the same copy of the document available I do not see any purpose in re-inspecting it at this stage.”
 
[10]	On 28 October 2014 a candidate attorney from the defendant’s Grahamstown attorneys informed Attorney Carruthers that she had attended at the plaintiff’s Grahamstown attorneys’ offices and that five of the six documents she inspected were originals.  (The sixth document was a copy of the plaintiff’s credit provider certificate.)  The candidate attorney deposed to an affidavit in the postponement application to the effect that the loan agreements shown to her were “wet-ink” documents.   The defendant then instructed Attorney Carruthers to obtain a report from a handwriting expert “concerning the existence of two separate loan agreements which differed in format and which appeared to both have been signed by myself, despite my having only signed a single loan agreement in respect of each of the two loan agreements signed with the respondent herein during 2006 and 2007 respectively.”  No opposing affidavit was delivered in the summary judgment application and the plaintiff’s attorneys were requested to agree to a postponement of the application in order to give the defendant an opportunity to obtain the opinion of a handwriting expert on the two versions of the loan agreements.  

[11]	The defendant also alleged that the loan agreements inspected by the candidate attorney differed from those which he and Attorney Carruthers had inspected on 5 September 2014.  Attorney Carruthers wrote to the plaintiff’s attorneys on 7 November 2014 stating that it was apparent from a comparison of the copies of the documents inspected on the two occasions at the plaintiff’s Grahamstown attorneys’ offices that they were not the same documents, and that neither of the documents inspected agreed with the copies annexed to the particulars of claim.  In her letter Attorney Carruthers described this discovery as “alarming and concerning” and requested a postponement in order to obtain the opinion of a handwriting expert concerning the authenticity of the various agreements produced.  Not surprisingly, the plaintiff’s attorneys did not agree to a postponement and invited a substantive application. 

[12]	Now that there were three versions of the loan agreements, despite his recall that he only signed one in 2006 and one in 2007, the defendant sought the services of a handwriting expert who could establish which of the three bore his signature and which of the versions had been manufactured.  This was the foundation of his application for a postponement, although in reply he raised the securitisation defence.  The postponement was granted but no report from a handwriting expert materialised.  In his opposing affidavit the defendant stated that in the time available since the postponement application he had not been able to secure the attendance of a handwriting expert in Grahamstown.  In the absence of the original agreements he maintained that the plaintiff was not in a position to enforce its claim and that this was a complete defence to the claim.   

[13]	In my view, the allegation that the documents made available for inspection were manufactured and were not the originals, was unsubstantiated and did not disclose a defence to the plaintiff’s claim.  The defendant did not dispute signing loan agreements in 2006 and 2007 respectively, and when the original agreements were handed up at the hearing of the summary judgment application there was no submission on his behalf that they were forgeries.  The original agreements accord with the particulars of the agreements alleged in the particulars of claim, and with the copies annexed to the summons.  What possible purpose the plaintiff could have in forging copies escapes me.  At no stage did the defendant allege that the contents of the allegedly manufactured agreements differed from the ones he had signed.  In my view that is the end of the allegation of forgery and the absence of the original agreements. 

[14]	A similar defence was unsuccessfully sought to be raised by way of an amendment to the plea in Standard Bank of South Africa Ltd v Ashbury George Davenport NO and Others, Eastern Cape, Grahamstown, case number 847/2010, judgment delivered 25 April 2014.  The defendants in that matter, now represented by Attorney Carruthers, had admitted that they had entered into various agreements on which the plaintiff relied in the action and had only raised the defence that the plaintiff had not complied with the provisions of the National Credit Act 34 of 2005.  In seeking an amendment the defendants sought to deny what was recorded in the agreements attached to the particulars of claim.  The problem, as stated in argument by Attorney Carruthers, was that the form of the copies differed from the form of the originals, although the content of the copies accorded with the content of the originals.  Allegations of fraud and forgery were made against the plaintiff bank.  
[15]	It is apparent from Plasket J’s judgment that in the notice of amendment no mention was made of the manufacture of documents, or of fraud and forgery.  As in the present case, it was not suggested that the original agreements had been manufactured.  As Plasket J said at para [23] of his judgment:
“In these circumstances, I cannot imagine why the plaintiff would ‘manufacture’ or ‘manipulate’ or forge copies of the original agreements.  The suggestion is outlandish.”

[16]	In the present matter, the defence seems to have petered out because it was not pressed in argument.  It is in my view a spurious and reckless defence.  Having admitted signing the loan agreements, the defendant’s allegation of forged copies which differ merely in format, leads nowhere.  I have dealt with the defence in some detail because implicit in the allegations of manufacture and a denial that the documents inspected on 5 September 2014 were the originals, as well as the allegation that the documents inspected by the candidate attorney were different from those inspected on 5 September 2014, is an allegation that the plaintiff’s attorneys in Port Elizabeth and Grahamstown falsely claimed that forged copies were originals.  These are very serious allegations which have seemingly now been abandoned, but not withdrawn.  (It is notable that in the Standard Bank v Davenport matter (supra) allegations of fraud and forgery were also not pursued.)  

[17]	Both Attorney Parker of the plaintiff’s Port Elizabeth attorneys and Mrs Sandra Amm of its Grahamstown attorneys deposed to affidavits in the postponement application and both maintained that the original loan agreements had been inspected.  Despite Attorney Parker informing Attorney Carruthers that the documents inspected on 5 September 2014 were originals, the defendant persisted in maintaining that they were copies and they had to be inspected again.  Mrs Amm was present at the inspection on 5 September 2014 and stated in her affidavit that Attorney Carruthers produced transparencies of the documents and compared them to the originals and also photographed each page.  Attorney Carruthers further told the defendant that she suspected that the documents were fraudulent because the transparencies were out of alignment with the originals.  The allegations were exacerbated by Attorney Carruthers’ letter, written after the candidate attorney had reported that the loan agreements she had inspected were originals, in which she continued to allege that the documents inspected differed from the copies annexed to the summons, and differed from each other, and described the discovery as “alarming and concerning”. 

[18]	Allegations of this sort cannot lightly be made and must be capable of substantiation.  As an officer of the court, Attorney Carruthers should be careful not to make such serious allegations on behalf of her clients, both in correspondence and affidavits.  In the present matter, Attorney Parker had given a colleague his assurance that the documents were the originals, and even offered them again for inspection in the presence of the Registrar.  To go beyond those assurances and still allege that the documents were manufactured, on the flimsiest of grounds, is reckless and insulting conduct on the part of a litigant and his or her attorney in such circumstances should exercise restraint in carrying out instructions in pursuance of such conduct, particularly when it is an attempt to escape liability in terms of admittedly signed agreements.

PLAINTIFF BARRED FROM PROCEEDING IN TERMS OF S 111 (2) (b) AND S 130 (1) OF THE NATIONAL CREDIT ACT 34 OF 2005 (THE NCA)
[19]	In the opposing affidavit this defence was somewhat intertwined with the securitisation defence, but I shall deal with it separately.  The defendant stated that on 17 January 2014 he sent a letter to the National Credit Regulator (the NCR).  He attached a copy thereof, which was an e-mail.  In the e-mail he asked the following: how the legal standing of his loan would be affected if it had been securitised; what the official position of the NCR was with regard to the effect of securitisation on the South African economy; would a debt counsellor be affected by securitisation; how could he (the defendant) trace the securitisation of his loan; prior to or during the operation of the NCA did the banks apply for an exception to use securitisation as an alternative source of funding; and when a loan is sold on to a third party in securitisation, must that third party be registered in terms of the NCA and if not why not.  According to the defendant this referral to the NCR was still pending.  In view of the provisions of s 111 (2) (b) and s 130 (1) of the NCA, the plaintiff was therefore barred from proceeding.

[20]	S 111 of the NCA provides:
“111  Disputed entries in accounts
(1) A consumer may dispute all or part of any particular credit or debit entered under a credit agreement, by delivering a written notice to the credit provider.
(2) A credit provider who receives a notice of dispute in terms of subsection (1)-
   (a)   must give the consumer a written notice either-
     (i)   explaining the entry in reasonable detail; or
     (ii)  confirming that the statement was in error either in whole or in part, and setting out the revised entry; and
  (b)   must not begin enforcement proceedings on the basis of a default 	   arising from the disputed entry-
 (i)   until the credit provider has complied with paragraph (a); or
 (ii)   at any time that the matter is under alternative dispute resolution procedures, or before the Tribunal in terms of section 115.”

It is clear that the various questions asked of the NCR did not concern disputed entries in accounts, nor did the defendant allege that he had delivered a written notice to the plaintiff regarding a disputed entry.  This was therefore not a good defence in law.

[21]	S 130 (1) of the NCA provides inter alia that a credit provider may only approach the court to enforce a credit agreement if at least 10 days have elapsed since the delivery of the notice in terms of s 129 (1) of the NCA and the consumer has not responded to the notice or has responded by rejecting the credit provider’s proposals.  S 129 (1) of the NCA provides that the credit provider may draw a default under a credit agreement to the notice of the consumer and propose that the consumer refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with jurisdiction, with the intent that the parties resolve any dispute under the agreement or develop or agree on a plan to bring the payments under the agreement up to date.  I can see no link between the defendant’s query to the NCR and these sections of the NCA and accordingly the reliance on s 130 (1) is misplaced and not a good defence in law.

 SECURITISATION

	[22]	The defendant stated that he believed that the plaintiff did not have locus standi in the action because it had ceded the debt to an unknown third party or sold it by way of securitisation.  If this was the case then it was an issue which needed to be ventilated at trial.  Amongst the documents requested in the notice to produce were the original loan agreements and any ancillary contracts and/or cessions related thereto, inclusive of any endorsements thereon, and the plaintiff’s “securitisation ledger”.  It was stated in the notice in reply that the plaintiff was unable to produce any ancillary contracts and/or cessions as the agreements had not been securitised.

[23]	Following this reply the defendant applied for documentation from the United States of America which he stated would “conclusively  show” that the plaintiff had securitised the debt to a third party unknown to him.  He did so as a result of his interpretation of the Chief Registrar’s Circular No 11 of 2014, issued by the office of the Chief Registrar of Deeds, which deals with cession of bonds for securitisation purposes.  His interpretation was that the circular provides that original mortgage bonds remain unendorsed when ceded for securitisation purposes.  The original bonds were handed in at the hearing of this application and there is no endorsement contained in them that indicates that the debts secured have been securitised.  The plaintiff relied on this lack of endorsement as an indication that no cession had taken place, referring what was said by Eksteen J in Thompson v Investec Bank Ltd [2014] ZAECPEHC 45 (an application for rescission of judgment where a defence of securitisation and lack of locus standi was sought to be raised) at para [18]: 
“Where the securities involved consist of mortgage bonds, as is the case in the present matter, then, in accordance with the provisions of section 16 of the Deeds Registries Act No. 47 of 1937, as read with the provisions of section 3(1)(f) of the said Act and with section 54 thereof, the transfer of the rights in and to the mortgage bond must be registered by the Registrar of Deeds, who endorses this transfer on the original mortgage bond.”

[24]	I deal with the relevant paragraphs of the circular.  Paragraph 3 sets out the process to be followed in order to obtain copies of mortgage bonds for securitisation purposes from the Registrar of Deeds.  Prior to lodgement of cession documents, conveyancers must apply to the Registrar for copies of the bonds concerned.  The copies are issued and endorsed by the Registrar with the words “certified a true copy of the registry duplicate and issued for securitisation purposes.”  Paragraph 4 of the circular deals with the documents which must be lodged with the Registrar for registration of the cession, one of which is an affidavit by the bondholder that the cession of the bond is required for securitisation purposes and that the client’s copy of the bond is inaccessible.  Paragraph 5 provides that after registration of the cession a caveat is noted in the deeds registry to the effect that the bond has been ceded and that no act of registration shall be permissible in respect of the mortgage bond or mortgaged property, until the client’s copy of the mortgage bond has been endorsed in respect of the cession.  The Registrar must also ensure that after registration the copy of the bond issued for securitisation purposes is destroyed before delivery. 

[25]	It does appear from the circular (since withdrawn in terms of Chief Registrar’s Circular No 14 of 2014) that during its period of operation cession documents lodged with the Registrar did not have to include the original bond document if the original was inaccessible, and that there is only a caveat or safeguard with regard to endorsement of the original bond document in the event of a further act of registration being sought.  However endorsement is not dispensed with.  Reliance on this circular does not in my view assist the defendant.  He is not in a position to know about accessibility or otherwise of the bond documents nor is he able to say that, if securitisation occurred, it was during the operation of the circular.  The lack of an endorsement on the documents does not support a defence of securitisation.

[26]	Annexed to the opposing affidavit was a report from an entity known as Certified Forensic Loan Auditors, LLC, of Los Angeles, California.  It was titled “Property Securitization Analysis Report” prepared for the defendant, in respect of the property Erf 4082 Grahamstown.  It was initially accompanied by an unsigned confirmatory “affidavit of fact” by one Michael Carrigan.  Counsel for the plaintiff, Ms Watt, pointed out in argument that the report was hearsay.  During the course of her argument Attorney Carruthers produced a copy of Carrigan’s affidavit, now signed and attested.  The report was dealt with in argument by both Ms Watt and Attorney Carruthers and I shall consider its contents.

[27]	The defendant expressed the view in his affidavit that the report conclusively showed that the plaintiff had securitised the debt to a third party.  The contents of the report appear to have obtained by Carrigan from his research of the “Bloomberg online data base”.  In his affidavit he stated:
“On December 4 2014, I researched the Bloomberg online Database at the request of Michael Border whose property address is Erf 4082, Grahamstown, Makana, Albany, Eastern Cape, S. Africa.”

The report consists of a number of pages, one of which is in Chinese, and some of which are profiles of some of the plaintiff’s high-ranking staff.  It deals only with the first loan of R645 000.00 secured by the first mortgage bond and describes the agreement as a promissory note and a security interest in the form of a mortgage.  Under the heading “Securitization (the note)” is stated:
“The note may have been sold, transferred, assigned and securitized into the Standard Bank of South Africa/Taipei CBO, series 2006-1 with a closing date of February 14, 2007”.

Other statements in the report include: 
“However examiner did locate a prospective Remic Trust within the Securities Exchange Commission website that matches the characteristics for the possibility of securitizing this loan.”; 

“other possibilities for this loan include placement within the Standard Bank of South Africa Limited portfolio of loans held in inventory or for sale, and perhaps used as collateral to increase secured borrowings prior to failure.”;
“The Standard Bank of South Africa Limited was a ‘correspondent lender’ that originated mortgage loans.  These loans, in turn, may have been sold and transferred into a ‘federally-approved securitization trust’ named the Standard Bank of South Africa/Tapei CBO, Series 2006-1.”; 

“The note and Deed have taken two distinctly different paths.  The note may have been securitized into the Standard Bank of South Africa/Taipei CBO, Series 2006-1.”;

“The loan was originally made to the Standard Bank of South Africa Limited and may have been sold and transferred to Standard Bank of South Africa/Taipei CBO, Series 2006-1.  There is no record of Assignments to either the Sponsor or Depositor as required by the Pooling and Servicing Agreement.”;

“In the event that the loan was sold, pooled and turned into a security, such event would indicate that the alleged holder can no longer claim that it is a real party of interest, as the original lender has been paid in full.”;

“The findings of this report indicate that the promissory note may have been converted into a stock as a permanent fixture.”;

“There is no evidence on record to indicate that the mortgage was ever transferred concurrently with the purported legal transfer of the note, such that the mortgage and note has (sic) been irrevocably separated, thus making a nullity out of the purported security in a property, as claimed.”;

“Careful review and examination reveals that this may have been a securitized loan.” 

[28]	Carrigan concluded as follows in his affidavit: 
“Based on the information I was provided, Michael Border signed a promissory note in favour of the Standard Bank of South Africa Limited on June 22, 2006.

Loan level detail was not identified in any publically reporting trust.  A trust meeting the qualifications for securitization is identified as the Standard Bank of South Africa/Taipei CBO, Series 2006-1 with the Master Servicer to be determined; the Sponsor/Seller the Standard Bank of South Africa/Taipei and any depositor to be determined.

The basis of the identification of loan in Standard Bank of South Africa/Taipei CBO, series 2006-1 was made from the following factors/information that exactly correspond with Michael Border’s loan documents provided:  loan number: 338759; original amount:  R645 000.00; origination date:  June 22, 2006; location of property:  Africa; property type:  TBD; occupancy:  owner occupied; type loan:  future advance clause type loan with maximum obligation.”

[29]   Leaving aside Carrigan’s report, the opposing affidavit disclosed no facts which showed that the debt had been securitized.  The defendant merely believed that it had and his belief amounted to no more than speculation.  In my view, the passages from Carrigan’s report which I have quoted, also go no further than speculation.  The use of the words “possibility” and “possibilities” and the frequent use of the word “may” do not amount to factual averments of securitisation.  Moreover the report is a result of research on someone else’s data-base.  Carrigan has apparently no direct knowledge of the information he gleaned from the data-base.  The report also only deals with the first loan and erf 4082, Grahamstown.  It does not mention the second loan or erven 4084 and 4078.  The concluding paragraphs of Carrigan’s affidavit do not amount to factual assertions that securitisation took place.  I am therefore of the view that no facts are set out by either the defendant or Carrigan which support a defence of securitisation and lack of locus standi.

PROMISSORY NOTES

[30]	The defendant stated that on 27 May 2014, prior to the institution of the action, he tendered payment to the plaintiff of the full arrears due at that time, R262 638.83, by way of a promissory note sent to the plaintiff by registered post.  The note was collected at the post office by someone on behalf of the plaintiff.  The defendant was not contacted by anyone thereafter and he concluded that it had been accepted in settlement of the matter, and therefore there was no merit in the action.  A second promissory note was tendered to the sheriff who served the summons.  Although somewhat confusingly expressed, it appears from the affidavit that the sheriff was also given a copy of the first note, and that this note was placed in the court file by the plaintiff’s attorneys, but later could not be found in the file.  The second promissory note was for an amount of R1 291 456.98 payable in monthly instalments of R500.00.  A copy is in the court file, attached to the sheriff’s return.  The amount reflected in the summons, so the defendant stated, fails to reflect the tender of the first promissory note and the amount claimed is therefore in dispute.  Further the plaintiff has a duty to hand the note to the unknown third party to whom the loan agreement has been ceded.  Failure to do so would be a fraudulent negotiation of the promissory notes and the plaintiff would be unjustifiably enriched by receiving payment twice.  

[31]	I am unable to find a defence in these averments.  A poor copy of the first promissory note reflects that the defendant promised to pay the amount of R262 638.83 in monthly instalments of R500.00 (or possibly R200.00, it is difficult to make out the amount or when payment was to commence).  A promise to pay does not extinguish the debt.  A promissory note is defined in s 87 (1) of the Bills of Exchange Act 34 of 1964 as follows:
“(1) A promissory note is an unconditional promise in writing made by one person to another, signed by the maker, and engaging to pay on demand or at a fixed or determinable future time, a sum certain in money, to a specified person or his order, or to bearer.”
  
[32]	The defendant made no averment that he had commenced payment, which is significant bearing in mind his conclusion that the note had been accepted in settlement of the matter.  If the plaintiff did not respond to the note it did not mean that it had compromised the claim, or agreed to vary the terms of the loan agreements, or allowed the defendant some indulgence, if that is what the defendant intended to mean.  The note did not state that it was in settlement of the arrears.  If no payment was made in terms of the note, the amount claimed in the action need not have reflect the amount promised.  As was submitted on behalf of the plaintiff, the note was in conflict with clauses in the loan agreements which provided that variations of the agreement had to be in writing and signed by both parties.  Fraudulent negotiation of the notes is tied up with the defence of securitisation which I have already dealt with.  The furnishing of the promissory note in the circumstances is not a defence which is good in law. 

CONCLUSION

[33]	It follows from the above that I am not satisfied that the opposing affidavit discloses a bona fide defence as envisaged in the rule 32 (3) (b) and the application for summary judgment should succeed. 

ORDER

[34]	Summary judgment in favour of the plaintiff is granted as follows:
	[34.1]	Payment of the sum of R1 554 095.81
	[34.2]	Interest thereon at the rate of 9.00% per annum from 14 May 2014 to 	date of payment.
	[34.3]	It is declared that the defendant’s property described as 
	Erf 4084 Grahamstown, in Makana Municipality, Division of Albany, 	Province of Eastern Cape;
	In extent 418 (four hundred and eighteen) square metres
	Remainder Erf 4082 Grahamastown, in Makana Municipality, Division of 	Albany, Province of Eastern Cape
	In extent 291 (two hundred and ninety one) square metres;
	Erf 4078 Grahamstown, in Makana Municipality, Division of Albany, 	Province of Eastern Cape
	In extent 22 (twenty two) square metres
	All held by Deed of Transfer No. T000044423/2006 
is specially executable.
	[34.4]	Costs of suit on the attorney and client scale.

______________
J M ROBERSON
JUDGE OF THE HIGH COURT

Appearances:

For the Applicant: Adv K Watt instructed by Greyvensteins Attorneys, c/o Wheeldon, Rushmere & Cole, Grahamstown.

For the Respondent: Ms B Carruthers, Carruthers Attorneys, c/o Neville Borman & Botha, Grahamstown