IN THE HIGH COURT OF SOUTH AFRICA,
FREE STATE DIVISION, BLOEMFONTEIN

Reportable:                              YES/NO
Of Interest to other Judges:   YES/NO
Circulate to Magistrates:         YES/NO	

Case No: 2097/2020 
                                                                            		 
In the matter between:

TUHF LIMITED                                                                  Applicant

and

EMELIA COURT (PTY) LTD                                            First Respondent
RANGASAMY GORDON PILLAY                                   Second Respondent
THE LAKEWOOD (PTY) LIMITED                                  Third Respondent 	
FOUNTAIN VIEW LODGE (PTY) LIMITED                      Fourth Respondent
ELLENBERGER & KAHTS                                               Fifth Respondent 

CORAM:				NAIDOO, J	

HEARD ON:			17 SEPTEMBER 2020                       

DELIVERED ON:	                    19 FEBRUARY 2021

1]	This matter and case number 2098/2020, were heard together. The facts are very similar and the respondents raised similar defences in both matters. The second respondent is the controlling mind of the first respondent in both matters. In order to avoid confusion, however, I will deal with each matter separately. In this application, the applicant seeks an order in the following terms:
	“1.   Payment by the First, Second, Third and Fourth Respondents, jointly and
  severally, the one paying the other to be absolved, of the sum of 
  R5 043 932.17.

2.   Interest on the amount owing to the Applicant calculated at a rate of 3.5%
above the prime rate per year calculated daily and compounded monthly in arrears (sic) from 1 May 2020 to date of final payment, both days inclusive.

3.    An order declaring the following property specially executable:

 3.1  Portion 5 of Erf 1702, Bloemfontein, district Bloemfontein, Province
        of the Free State, held by virtue of Deed of Transfer T12210/2019.

4.   An interim interdict, pending the termination of the Applicant’s entitlement
      to exercise its rights as the Cessionary of the rentals arising from the 
      property as against the First respondent in its capacity as Cedent of those
      rights, whether by transfer of the property or otherwise, in terms of which:

4.1  The Second Respondent, his employees and assignees, be directed
       to refrain from making any form of contact with the tenants or
       occupants of the property, whether physical or otherwise, without
       the Applicant’s prior written consent [in the event of contact other
       than physical contact] and without Applicant having a representative
       present [in the case of physical contact];

4.2  The Second Respondent, his employees and assignees, be directed
       to refrain from interfering with the Fifth Respondent’s management 
       of the properties, including its collection of rentals for and on behalf
        of the Applicant, maintenance of the properties and all other action
        ancillary to the enforcement of the Cession; 	

4.3   The First Respondent be expressly prohibited from collecting any 
        rentals from any of the tenants or occupants of the property for the
        remaining period of which the Cession remains in operation; 
 
4.4   The First Respondent be directed to immediately pay over to the
        Fifth Respondent all rentals collected after the effective date of the 
        Cession.

	 5.  Cost of the Application as against First, Second, Third and Fourth
                 Respondents, on an attorney and client scale, the one paying, the other to
                 be absolved.

	6.   Further and/or alternative relief.”

[2]	The applicant is a registered financial services and credit provider, who specialises in financing the acquisition and rehabilitation of immovable properties.The applicant and first respondent entered into a loan agreement on 26 October 2018, in terms of which the applicant lent and advanced an amount of Four Million Seven Hundred and Twenty Two Thousand Six Hundred Rand (R4 722 600.00) to the first respondent, for the purchase of a property, known as Portion 5 of Erf 1702 Bloemfontein, district Bloemfontein, Free State Province (the property). 

[3]	As security for the loan, the first respondent registered a mortgage bond over the property in favour of the applicant. The first respondent also ceded, assigned and transferred to the applicant all its rights, title and interest in any rentals due in respect of the property. The applicant was authorised to let the property, collect rentals, evict lessees and take all steps necessary to secure the collection of rentals. The second, third and fourth respondents signed suretyship agreements in favour of the applicant, binding themselves as sureties for the due and proper performance by the first respondent of its obligations to the applicant, in terms of and arising from the loan agreement.

[4]	The first respondent failed to pay to the applicant the instalments due in terms of the loan agreement and, by May 2020, fell into arrears in excess of R364 000.00. As a result, the applicant exercised its option to declare all amounts owing to it in terms of the loan agreement, immediately due and payable. The applicant called upon the first respondent, in writing, to cure the breach of the loan agreement, but received no response from the first defendant. A letter of demand was addressed to the first respondent, in February 2020, demanding payment of the full amount due and payable to the applicant. No response was received to this letter, which resulted in the launching of the current application.

 [5]   The respondents admit the loan agreement, the registration of the mortgage bond, the suretyship agreements and that they did not pay the instalments due in terms of the loan agreement. The respondents have raised a number of defences in this matter. The second respondent alleges that he has been in the business of, inter alia, providing accommodation to (mainly) students at tertiary institutions in Bloemfontein. The loan relevant to this matter was used to purchase the property, for the purpose of renting out the flats. The respondents allege that it was intended for student accommodation, and, as such, the National Student Financial Aid Scheme (NSFAS) would pay the rentals in respect of students who were granted financial assistance. The applicant was well aware of this. These payments would usually be made during the period February to April each year, and the first respondent could only pay the instalments due in terms of the loan agreement after receipt of the monies from NSFAS. 

[6]	The respondents assert that the applicant knew that the income generated from the student accommodation was for a period of ten (10) months each year. In spite of this, and knowing that the first respondent would only receive payment after February 2020, the applicant exercised its rights in terms of the loan agreement. In addition the applicant also exercised its rights in terms of the Cession, by appointing the fifth respondent as managing agent to conclude lease agreements with tenants and collect rentals. The first respondent was effectively prevented from earning an income.
This, together with the national lockdown due to the Covid-19 pandemic, made the first respondent’s performance in terms of the contract impossible, and consequently its obligations in terms of the loan agreement were extinguished.
	
[7]	Another defence raised by the respondents is that the applicant registered a second bond over the property in the amount of One Million Three Hundred and Twenty Nine Thousand and Seventy Seven Rand (R1 329 077.00). This amount would be utilised to pay the instalments due by the first respondent, until the first payment

 was received from NSFAS or the Universities. The respondents allege that this amount was never advanced to the first respondent. The respondents’ duty to perform in terms of the contract had, therefore not arisen, as the applicant failed to perform in terms of the contract. It is also the respondents’ version that in view of the defences it raised, the amount claimed by the applicant is wrong.
	
[8]	In reply, the applicant specifically referred to the terms of the loan agreement to dispute the validity of the defences raised by the respondents. It pointed out that the loan agreement makes no provision for instalments to be paid for only ten months of the year, for the period from February to April each year. The applicant contends that Emelia Court was approved for family letting (and not student accommodation, as alleged by the respondents). The applicant also asserts that the loan agreement contains a “non-variation” clause, which specifies that it was the whole agreement between the parties. The terms of the loan agreement were never amended.

[9]  	The applicant contends that the first respondent creates the incorrect impression that it granted the first respondent a further loan and then failed to advance the loan. As I indicated earlier, this matter and case number 2098/2020 were enrolled together for hearing before me. The applicant explains that it entered into a separate loan agreement with the third respondent in terms of which it advanced certain amounts to it. This was in respect of another property, and a mortgage bond was registered over that property 

	as security for the loan. The third respondent fell into arrears in respect of the repayment of the loan and applied for an additional facility to capitalise the arrears and to normalise the account. 

[10]	The applicant increased the initial loan amount and registered a further mortgage bond over the property relevant to that loan agreement, as security for that facility. Immediately thereafter, the third respondent fell into arrears again and a portion of the increased facility was withheld by the applicant. The applicant launched an application under case number 2098/2020 for judgment in respect of the loan agreement entered into with the third respondent. There was no further loan granted to the first respondent in this matter and the increase in the facility amount does not relate to this matter. The registration of a further mortgage as security for the increased facility also does not relate to this matter. Two letters were addressed to the legal representatives of the first to fourth respondents, under case number 2098/2020, explaining the position with regard to the increased facility and the registering of a further mortgage bond. It is therefore difficult to fathom why the first respondent would state that this situation pertains to the current application, when it must be well aware that this is not the case. 

[11]	The first respondent clearly raises certain defences in an attempt create factual disputes and pass them off as bona fide disputes of fact. In accordance with the well-established rule in the case of Plascon Evans, a final order will only be granted in favour of the 

	applicant in motion proceedings, where the facts stated by the respondents, together with their admission of the facts alleged by 
	the applicant justify such final order. [Plascon Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984(3) SA 623 (A)]. The court in Plascon Evans in stating the general rule, referred to the case of Stellenbosch Farmers' Winery Ltd v Stellenvale Winery (Pty) Ltd 1957 (4) SA 234 (C) at 235E - G, where the court stated the rule as follows:
"... where there is a dispute as to the facts a final interdict should only be granted in notice of motion proceedings if the facts as stated by the respondents together with the admitted facts in the applicant's affidavits justify such an order... Where it is clear that facts, though not formally admitted, cannot be denied, they must be regarded as admitted." 
Plascon Evans was followed, re-stated and applied in a number of cases by the Supreme Court of Appeal (SCA), and more recently in Media 24 Books (Pty) Ltd v Oxford University Press Southern Africa (Pty) Ltd 2017 (2) SA 1 (SCA) as well as by the Western Cape High Court in Mouton v Park 2000 Development 11 (Pty) Ltd 2019 (6) SA 105 (WCC).

[12]	Where the dispute of fact is not bona fide or genuine, the court will, therefore be justified in disregarding or ignoring it and may decide the matter on the facts as averred by the applicant. Neither party requested that the matter be referred for the hearing of oral evidence, so the court must confine itself to the evidence as contained in the affidavits before it to determine if the disputes raised by the first respondent are genuine disputes of fact and whether they are bona fide. A perusal of the loan agreement, and particularly the 

	payment terms, indicates that the loan was to be repaid in 180 monthly instalments estimated to be an amount of R61 430.00 each. The estimated date for payment of the first instalment was 10 February 2019. Clause 2.1.24 of the “Common Terms Module” of the loan agreement provides that the facility period “will be reckoned from the date on which the Facility Amount or any part thereof is advanced to the Borrower or on the Borrower’s behalf”. The loan agreement further makes provision in clause 2.1.32 for the instalment payment date to be the 10th day of each calendar month, reckoned from the date on which the Facility Amount is advanced to the borrower. It is common cause that the mortgage bond relevant to this matter was only registered on 5 September 2019. 

[13]	 A perusal of the transaction history of the first respondent’s loan account indicates that the loan facility was only debited to that account on 5 September 2019. This is in accordance with clause 4.2 of the loan agreement, which provides that “The Loan Facility will be made available to the Borrower or on the Borrower’s behalf in terms of clause 6 below after registration of the Mortgage Bond”. (my emphasis). The applicant contends that the first instalment, therefore, became payable on 10 October 2019. The debit orders against the first respondent’s account for 10 October 2019 and 10 November 2019 were returned unpaid. The instalments for December 2019, and January to May 2020 were also unpaid. The Transaction History reflects that several small amounts by way of Electronic Funds Transfer (EFT) into the loan account in February, March, April and May 2020. These were, however not sufficient to meet the payment 

	of the estimated monthly instalment of R 61 430.00. The actual instalment debited was approximately R61 575.00.

[14]	One of the defences raised by the first respondent is that the date for the payment of the first instalment was 10 February 2019. The	bond was registered only on 5 September 2019, and no new date for the commencement of the repayments was agreed upon. Therefore, performance in terms of the agreement was not possible. In my view not only is this untenable, in view of the provisions of the loan agreement, I have set out above, but it is somewhat nonsensical, as the first respondent was well aware of the date of
	 registration of the mortgage bond. It was properly represented when the loan agreement was entered into, and therefore there is no reason not to believe that it was well aware of the terms of the loan agreement. As such, it ought to have known, as a matter of logic, that repayments would commence on the 10th of the following month, in terms of the loan agreement. 

[15]	A further claim of impossibility of performance by the first respondent is that the applicant exercised its rights in terms of the Cession to it by the first respondent of the latter’s rights to rentals accruing from the property. The first respondent alleges that the applicant took over the property, and engaged the fifth respondent to assist in the management of the property. This effectively prevented it from earning an income as the rentals from the property were its only source of income. As a result of the National Lockdown on account of the Corona virus pandemic, the universities were closed and students returned to their homes. The combined effect 

	of the applicant’s occupation of the property and the National Lockdown rendered it impossible for the first respondent to fulfil its contractual obligations to the applicant.
 
[16]	It is perhaps opportune to deal now with the defence of impossibility. With reference to the cases, the court in Transnet Ltd v MV Snow Crystal 2008(4) SA 111 (SCA), at para 28, sets out the general principles applicable to such defence:
	“As a general rule impossibility of performance brought about by vis major or casus fortuitus will excuse performance of a contract. But it will not always do so. In each case it is necessary to 'look to the nature of the contract, the relation of the parties, the circumstances of the case, and the nature of the impossibility invoked by the defendant, to see whether the general rule ought, in the particular circumstances of the case, to be applied'.  The rule will not avail a defendant if the impossibility is self-created; nor will it avail the defendant if the impossibility is due to his or her fault.  Save possibly in circumstances where a plaintiff seeks specific performance, the onus of proving the impossibility will lie upon the defendant.”	
	(vis major = an act of God: casus fortuitous = an accidental occurrence)

[17] 	As a starting point, the onus rests on the first respondent to prove impossibility of performance in terms of the contract. The repayments due in terms of the loan agreement were estimated to commence in February 2019. However, due to the mortgage bond being registered only on 5 September 2019, the repayments were to commence in October 2019. The first respondent’s assertion that no date was agreed upon for the commencement of repayments, 

	after the 10th February 2019 had elapsed, is rejected for the reasons set out above. The loan agreement makes specific provision for the facility to be advanced after the registration of the mortgage bond. It is only thereafter that the repayments would commence. The first respondent’s assertion therefore makes no sense. There is no other rational or acceptable explanation for its failure to pay the instalments for October, November and December 2019. 

[18]	The applicant exercised its rights in terms of the Cession, only with effect	from 1 December 2019, after the first respondent failed to pay the instalments due for October and November 2019. The instalments for January, February and March 2020 were also not paid. It appears that such monies as were paid into the loan account were the amounts recovered by the fifth respondent in respect of rentals from the property. The National Lockdown took effect only from 27 March 2020, and could hardly have been the reason for the first respondent’s failure to adhere to the terms of the loan agreement for the preceding six months. The Lockdown may well have severely affected the first respondent’s ability to collect rentals, but this would have been subsequent to 27 March 2020. The first respondent’s version that the property relevant to this matter was purchased to be used as student accommodation, and that due to the Lockdown, they all returned home, appears not to be entirely correct. The fact that the fifth respondent was able to collect rentals from tenants after the National Lockdown, favours the applicant’s version that the property was intended for family letting.

[19]	In my view, therefore, the respondents failed to discharge the onus on them to show any impossibility of performance. The applicant’s enforcement of the Cession was the result of the first respondent’s 

	failure to adhere to the terms of the loan agreement. Therefore any inability to perform in terms of the loan agreement was due to the fault of the first respondent. The defence of impossibility is, in these circumstances, not available to the first respondent.

[20]	I pause to mention two matters, which were raised in the papers and in the course of arguments. The first respondent took the point, 	in limine, that the Founding Affidavit was not signed by the deponent and therefore, the attestation by the commissioner of oaths that the affidavit was signed before him was incorrect. Consequently there is no Founding Affidavit before court, and the application should be dismissed on that ground. The court ruled that there was substantial compliance with the Regulations governing the administration of an oath or affirmation. The deponent initialled each page of the affidavit, including the page on which the attestation of the commissioner of oaths appears, and a signature line for her full signature
 
[21]	The Commissioner of Oaths certified as follows:
	“I hereby certify that the deponent to this Affidavit has acknowledged that she is familiar with and understands the contents thereof, which was signed and sworn to before me at Johannesburg on this 12th day of June 2020, the regulations contained in Government Gazette R1258 of 21 July 1972 having been complied with.”
	The commissioner stamped the affidavit with a stamp reflecting his details and affixed his signature to the document. I should also point out that the typed certificate reflected the deponent as “he”. In manuscript, the Commissioner added an “s” in front of “he”, so that it reads “she”. One of the requirements of the regulations is that the	deponent shall sign the affidavit in the presence of the commissioner of oaths. I was satisfied that the deponent was in fact before the commissioner of oaths and signed the affidavit in his presence, prompting him to correct the gender of the deponent in the certificate. 

[21]	The only question was whether the deponent’s initials instead of her full signature were sufficient for the purposes of complying with the
	regulations. In my view, the regulations are not peremptory in this regard and give guidance as to how an oath should be administered2and the procedural steps that should be followed. Hence the court retains the discretion to accept an affidavit as being compliant with the regulations or not, depending on the circumstances of the matter and the nature of the non-compliance. I held the view that the deponent’s failure to affix her full signature did not render the affidavit defective. Her initials on all the pages as well as on the same page as the attestation by the commissioner of oaths constituted substantial compliance with the regulations.

[23]	The other matter is that the applicant raised in its Replying Affidavit that the second respondent, who was the deponent to the Answering Affidavit, failed to attach proof that he was authorised to depose to the Answering Affidavit on behalf of the first, third and fourth respondents. Nothing further was done in this regard to attack such authority, nor was anything mentioned about it in the oral address in court. In my view, the filing of the Replying Affidavit, indicates that the applicant was not of a mind to seriously challenge 

	the authority of the second respondent, and I regard the applicant to
	have waived its right to challenge such authority, for example, by engaging the machinery of Uniform Rule 7. I shall not deal any further with this point. 

[24]	I deal now with the relief sought by the applicant for an interim interdict. It is well established in our law that in order for this relief to be granted, the applicant must establish a clear right, he must show harm or injury which has actually occurred or is reasonably	apprehended and that there is no other remedy available to him. In this matter, the applicant alleges that it, represented by the fifth respondent, was hampered in the collection of rentals from tenants in that the fifth respondent experienced difficulties “at some stages” to access the property. They were ostensibly intimidated by certain young men, who they allege are associates of the second respondent. The respondents deny such interference or intimidation, and the second respondent also denies that he knows such people or that they acted on his instructions. 

[25]	On the applicant’s version, the fifth respondent was able to collect rentals from the tenants from February to May 2020. The applicant’s version is that there were no tenants occupying the property during January 2020. It is also the applicant’s version that they  experienced challenges only at some stages. The applicant may have a clear right, but I am not satisfied that the kind of “harm” or injury” they complain of is of such a nature that the respondents have to be interdicted. An interdict is clearly the last resort, when no other remedy is available. The applicant has not shown that no other 

	remedy exists. In any event, the applicant conceded that the first	 respondent is still responsible for the maintenance of the property, and must, as a result, be given access to the property for this purpose. The applicant has not shown that such access to the property will be a challenge to its rights in terms of the Cession. I am of the view, therefore that the prayer for an interim interdict must fail.

[26]	In considering the submissions of both parties regarding the prayer to declare the property specially executable, the court is obliged to consider the provisions of Uniform Rules 46 and 46A. It is correct that the property is registered in the name of a legal entity, and as such the property cannot be regarded as the primary residence of the legal entity. However, there are tenants occupying the property, and the flats they are occupying may well be their primary residence. It would have been useful for information regarding how many tenants are in occupation and the duration of their respective leases to have been furnished to the court.

[27]	In addition, the court does not have a proper valuation of the property before it. Ostensibly an internal valuation of the property was conducted by the applicant, which yielded an amount of Eight Million Three Hundred and Thirteen Thousand Seven Hundred and Fifty Five Rand and Eight Cents (R8 313 755.08). The property was mortgaged in favour of the applicant in an amount R7 083 900.00. No details are available about what amounts, if any, are owed by the first respondent in respect of rates, taxes and utilities. The amount claimed at the time of launching this application is R5 043 932.17. In my view, it would be prudent to set a reserve price for the sale in

	 execution. However the determination of the amount of the reserve price can only be made when the details I have mentioned are furnished to the court.

[28]	With regard to costs, the applicant seeks an order for costs on the scale as between attorney and client. Clause 38.1.3 of the loan agreement provides, inter alia, that the Borrower (first respondent) will pay all charges and expenses of whatever nature, where the Lender (applicant) endeavours to secure fulfilment of any of the obligations in terms of the agreement, on an attorney and own client scale. The applicant, as indicated, seeks costs on the attorney and client scale. The first respondent did not address the court on the issue of costs, other than to seek an order dismissing the application with costs. There was equally no address regarding the applicant’s submissions regarding the scale of the costs to be awarded. Although the award of costs is within the discretion of the court, in the absence of any challenge or submissions from the first respondent, the court takes cognisance of the provisions of the agreement, which was duly signed by an authorised representative of the first respondent, as well as the order sought by the applicant.

[29]   In the circumstances, the following order is made:

29.1	Payment by the first, second, third and fourth respondents, jointly and severally, the one paying the other to be absolved, of the amount of Five Million Forty Three Thousand Nine Hundred and Thirty Two Rand and Seventeen Cents (R5 043 932.17)

29.2	Interest on the amount owing to the applicant calculated at a rate of 3.5% above the prime rate of interest per year, calculated daily and compounded monthly in arrear from 1 May 2020 to date of final payment, both days inclusive

29.3.	Costs of the application are awarded against the first, second, thirdand fourth respondents, the one paying, the others to be absolved, on the scale as between attorney and client.

29.4	The prayer to declare, specially executable, the immovable property described as Portion 5 of Erf 1702, Bloemfontein, district Bloemfontein, Province of the Free State, held by virtue of Deed of Transfer T12210/2019, is postponed pending the filing of an affidavit by the applicant, with supporting documents, indicating the amount of the valuation of the property, the amount owed by the first respondent in respect of rates and taxes and any other amount to be taken into consideration for determining the reserve price to be set.

							   ____________________
						        S. NAIDOO, J

		

On behalf of Applicant:			Adv. CD Pienaar 
Instructed by:				McIntyre Van Der Post
						12 Barnes Street
						 Westdene
						 Bloemfontein
						(REF: AAT279/Elene)

On behalf of 1st to 4th 
Respondents:				Adv. R Coetzee
Instructed by:				Steenkamp & Jansen Inc
						Hydro Office Park
						100 Kellner Street
						Westdene
						Bloemfontein
						(REF: R Coetzee)