- January 27, 2023
- |Civil Law, Practice, And Procedure, Concise Law Reports (CLR)
Nedbank Namibia Limited v Eva Fifteen CC NAHCMD (27 January 2023)
Whereas the respondents were indebted to the applicant in the amount of N$1 499 767 together with interest and costs and a judgement was granted on 17 November 2020, the applicant brought an application in terms of rule 108(1)(b) to declare a certain property chosen by the second respondent as her domicilum citandi et executandi, spcifically executable. The application was initially opposed but the legal representative for the respondent did not appear in court on 18 November 2022 to argue the matter and the court therefore proceeded and listen to the arguments of the legal practitioner on behalf of the applicant.
The second defendant filed a statement on behalf of the first defendant as she indicated that she is the owner of 100% of the membership interest of the first defendant and she is also acquainted with the facts in the present matter. She indicated that the main source of income of the first defendant is the income generated from leasing out the property. She further indicated that her health declined during February 2019, which then had a negative impact on her business. She could not attend to her own affairs or that of the first respondent until the end of 2021 when her health had improved again. During this time, a tenant of hers did not pay his rental fees and she could not institute legal action against him due to her ill health. The rental amount he owes her is in the sum of N$119 564.71. The Covid 19 pandemic further impacted on the business.
The property is being leased as from 1 February 2022 until 31 January 2024 for the amount of N$15 000 per month. She made a settlement proposal to the legal practitioners of the plaintiff to make certain payments to them in an attempt to settle the arrears as well as undertook to pay the rental amount she receives for the property to them. She further made various payments between November 2021 to September 2022.
She further explains that she owns various shares in companies that also struggled during the Covid 19 pandemic however their financial position is expected to improve. She received these court documents only on 14 September 2022. She is willing to make a payment of N$25 000 a month with further lump sum payments from time to time until the debt is fully paid. She further argues that no proper service was effected on the lessee of the property as the documents were just affixed to the main gate of the premises and thus no personal service took place.
RAKOW J considered the facts and the provisions of rule 108(1) and stated that:
‘[8] In Namib Building Society v Du Plessis 1990 NR (HC) 161, it was found that a mortagee as a right can seek recourse against a bonded property. This judgement said the following:
‘There appears to be considerable authority to support the contention that a mortgagee can as of right look to the mortgaged property to satisfy his claim… See G B van Zyl The Theory of the Judicial Practice of South Africa vol 1 3rd ed at 294-5. He writes that in Roman law movables first had to be exhausted before recourse could be had to land. He continues:
“It is the same with us when the plaintiff has no hypothec or pledge. But when property has been specially mortgaged that property must first be sold in execution before any other can be taken and only for the deficiency can other property be taken.”
[9] The locus classicus in these matters is the case of Standard Bank Namibia Limited v Shipila and Others 2018 (3) NR 849 (SC) and specifically deals with the owner’s right to protect his or her primary home against execution. The argument put forward in the current matter is that the owner of the property is a closed corporation and it is common cause that it is not the primary home of the second respondent but that the first respondent is leasing out the property to a third party, who received notification of these proceedings. The Supreme court concluded:
‘In the present instance the appellant (and commercial banks) accepts that there must be judicial oversight where a claim is in respect of the foreclosure of a bond in terms of the provisions of rule 15(3). The first respondent in this matter had been informed personally of the intention of the appellant to apply to court for an order to declare the relevant immovable property specially executable, and had been given the opportunity to make submissions in the court a quo (which she did); the deputy sheriff made a nulla bona return (which was not strictly necessary in respect of a claim for the foreclosure of a registered mortgage bond); the first respondent never settled the debt as promised; the first respondent never made an allegation that the appellant by instituting an action for the recovery of the outstanding amount, abused the court’s process, and neither is there a suggestion that the appellant acted in bad faith.
[70] The court a quo should in these circumstances have declared the said immovable property specially executable in view of the fact that there is no viable alternative or no less drastic measure other than a sale in execution.’
In conclusion,
‘[10] In the present matter, there was no indication as to how the first respondent intends to settle the amount outstanding except for utilizing the rental amount being received every month. Because of the default on the side of the first defendant to repay its debt as agreed in the initial agreement, the plaintiff obtained a default judgement and as such, is entitled to call up the bond and sell the property on execution.’
As a result, the property was declared specially executable.