An execution order against the primary residence of the debtor should be the last resort, and only when all other avenues to satisfy the arrears have been meaningfully exhausted.
In the matter before the Western Cape High Court, Standard Bank had applied for default judgment and an order to declare an property in Cape Town executable, subject to a reserve price, and to authorise the Registrar of the High Court to issue a Writ in Execution against the immovable property. But crucially, the arrears were hardly three months old.
The mortgage bond was registered in favour of Standard Bank on 13 August 2013. The monthly instalment on the bond was R5 137.68.
The respondents, Graham and Chantel van Nelson, first fell into arrears under the loan agreement on or about July 2023.
They were three months in arrears as of 29 September 2023 in the amount of R16 064.32.
The full balance outstanding in terms of the mortgage loan agreement as at 29 September 2023, was R432 931.04.
According to Standard Bank, the respondents were in breach of the mortgage loan agreement since 29 September 2023.
On 3 October 2023, Standard Bank addressed a letter of default and Notice in Terms of Section 86 the National Credit Act, to the respondents, the debt counsellor and the National Credit Regulator to inform the respondents inter alia that they were in breach of the loan agreement when they failed to make payment of the full monthly instalment due. The arrears were hardly three months old, and the bank proceeded to issue summons on 18 October 2023 seeking a money judgment and an order to execute against the property for satisfaction of the accelerated debt.
Standard Bank mentioned in its affidavit that the respondents were afforded the opportunity to remedy the breach in terms of the mortgage loan agreement and despite being in breach of the agreement since 29 September 2023, but failed to do so. Standard Bank also sais that the total amount owing by the respondents are substantial and that it will be prejudiced if it cannot recover a portion of the amount due to it by executing against the property. It also alleged that given the amount due to it, that it is unlikely that the respondents will be in a position to satisfy any judgment granted, either by way of payment by way of attachment and sale of movable property.
It alleges that there is no reasonable possibility that the respondents’ breach of the loan agreement will be cured within a reasonable period and that the bank therefore has no alternative but to execute against the immovable property. However, Acting Judge TJ Golden dismissed the application by Standard Bank “in the interest of justice”. There were no significant arrears in the present matter. The judge said facts showed that the respondents did not significantly fall into arrears and had no history of arrears other than the immediate 2.8 months arrears upon which the application is predicated.
“It will lead to an iniquitous result should I have granted the application given the negligible arrears of 2.8 months and where the facts suggest that the respondents may have been in a position to settle the arrears,” Judge Golden added.
