---

FILING SHEET FOR EASTERN CAPE JUDGMENT

ECJ no : 172

PARTIES:

FIRSTRAND BANK LIMITED APPLICANT/PLAINTIFF

AND

RAPHAEL LENEA FIRST RESPONDENT/DEFENDANT

THEMBEKILE RUTH LENEA SECOND RESPONDENT/DEFENDANT

REFERENCE NUMBERS -

• Registrar: EL 265/07

ECD 565/07

• Magistrate:

• High Court: EAST LONDON CIRCUIT LOCAL DIVISION

HEARD:

DATE DELIVERED: 28/06/ 2007

JUDGE(S): Leach, J

LEGAL REPRESENTATIVES -

Appearances

• for the State/Applicant(s)/Appellant(s):

• for the accused/respondent(s):

Instructing attorneys:

• Applicant(s)/Appellant(s): Changefoot Van Breda

• Respondent(s): Magqabi’s Attorneys

CASE INFORMATION -

• Nature of proceedings : Summary Judgment

• Topic:

Summary

Practice – summary judgment on a mortgage bond – court entitled to grant an order declaring the mortgaged property executable.

IN THE HIGH COURT OF SOUTH AFRICA

(EAST LONDON CIRCUIT LOCAL DIVISION)

	Case No.: EL 265/07 ECD 565/07
	Date delivered:
In the matter between:
FIRSTRAND BANK LIMITED	Applicant / Plaintiff
and
RAPHAEL LENEA	First Respondent / Defendant
THEMBEKILE RUTH LENEA	Second Respondent / Defendant

J U D G M E N T

LEACH, J:

In January 2004, the plaintiff lent and advanced R180,000.00 to the defendants who are married in community of property. Security for this loan was provided by way of mortgage bond registered over the immovable property known as Erf 54013 East London, Local Municipality of Buffalo City, division of East London, Province of the Eastern Cape held by the defendants under Deed of Transfer No. T3696/2004. In terms of the bond, the defendants undertook to repay the amount due by way of monthly instalments and that, should they fail to pay any amount in terms of the bond, the outstanding balance owing to the plaintiff would be payable forthwith and the plaintiff would be entitled to an order declaring the mortgaged property executable.

In May 2007, the plaintiff instituted action against the defendants in which it alleged that an amount of R174,587.18, being the outstanding balance due under the bond, was payable as a result of the defendants having failed to pay the monthly instalments due under the bond. It also claimed payment of interest on that amount as well as an order declaring the mortgaged property executable and costs, including collection commission to which reference had been made in terms of clause 11 of the bond.

After service of the summons, the defendants entered appearance to defend. Pursuant thereto, the plaintiff applied for summary judgment, contending that the defendants had no bona fide defence to the claim and that their notice of intention to defend had been delivered solely for the purposes of delay. The summary judgment proceedings were set down for hearing on 26 June 2007. Late in the afternoon of 25 June 2007, the defendants lodged a notice of opposition to the application for summary judgment. However they did not file an affidavit in opposition as required by Rule 32(3)(b) nor did they appear at the hearing, and there is no reason for summary judgment not to be entered against them.

During the course of the hearing I queried whether an order declaring the hypothecated property executable can be granted in summary judgment proceedings. Counsel for the plaintiff had not considered the point and was unable to refer me to any authority one way or the other, and it was therefore necessary for me to reserve judgment in order to consider the issue.

There is authority both for and against the proposition that an order declaring mortgaged property executable can be issued by way of summary judgment. In Allied Building Society v Malic Construction and Development Co CC 1991(4) SA 432 (T), the court appears to have held that Rule 32(1) does not permit such an order to be granted by way of summary judgment. The reasoning in that case appears to be that Rule 32(1) limits summary judgment proceedings to claims on a liquid document, for a liquidated amount of money, for delivery of specified movable property or for ejectment, together with any claim for interest and costs – and makes no mention of a claim for immovable property to be declared executable.

This judgment has been the subject of trenchant criticism. Thus Harms, in his work Civil Procedure in the Supreme Court, states it to be “clearly wrong” and in Erasmus Superior Court Practice at B1-209 the learned author suggests that the judgment should not be followed. Similarly, in a number of cases, other courts have specifically refused to follow it and have held that such an order may be granted – see Nedperm Bank Ltd v Verbri Projects CC 1993 (3) SA 214 (W) at 219, First National Bank of S.A. Ltd v Ngcobo 1993 (3) SA 419 (D), Nedcor Bank Ltd v Lisinfo 61 Trading (Pty) Ltd 2005 (2) SA 432 (C) at 438 para [21] and Standard Bank of S.A. Ltd v Snyders 2005 (5) SA 610 (C) at 620 [22].

In my view, the authorities to the effect that the summary judgment can be granted for an order declaring hypothecated property to be executable are correct, and that the Allied Building Society v Malic Construction case supra was wrongly decided. There can be no doubt that the claim for payment of the capital sum founded on a liquid document is recoverable and falls within Rule 32(1). An order declaring the mortgaged property executable is relief ancillary to the main claim, and must have been intended to be covered by Rule 32(1). After all, an order declaring the mortgaged property executable can be granted by default should a defendant not enter an appearance to defend, and there would be no reason why such an order should not be granted where a defendant who does enter an appearance to defend in fact has no defence and seeks merely to delay judgment being granted against him. I have therefore concluded that the order sought should be granted in the present case.

In regard to the question of costs, the defendants agreed in Clause 11.1 of the bond to pay all costs, including attorney and client costs and collection commission incurred by the plaintiff should they be sued for the recovery of the amounts due under the bond. In the light of this agreement, I further have no difficulty in granting the costs as between attorney and client as prayed. However, there is no allegation that collection commission has in fact been incurred and, without such an allegation, counsel for the plaintiff correctly did not seek an order in that regard.

There will therefore be summary judgment in the plaintiff’s favour against the defendants as follows:

1. For payment of the amount of R174 587,18;

2. Payment of interest on the aforesaid amount of R174 587,18 calculated at the rate of 12,5% per annum and compounded monthly with effect from 1 April 2007 to date of payment;

3. The immovable property known as Erf 54013 East London, Buffalo City Local Municipality, Division of East London, Province of the Eastern Cape, in extent of 448 square metres, held by Deed of Transfer No. T3696/2004 is declared executable in the hands of the plaintiff.

4. The defendants are to pay the costs of suit taxed as between attorney and client.

_________________________

L.E. LEACH

JUDGE OF THE HIGH COURT

Summary

Practice – summary judgment on a mortgage bond – court entitled to grant an order declaring the mortgaged property executable.

---