Pretoria - The proverbial “when you snooze, you lose,” truism came to play before the court this week.
A decade ago, Absa obtained a judgment against a family which struggled to pay their monthly instalments to sell their property on execution.
But over the past 10 years, the bank didn’t execute the order and the family remained living in the house.
They made payments over the years in the amounts they could afford. But now a decade after the lender first obtained the judgment, it returned to court to obtain an order allowing it to go ahead with the sale and perhaps set a reserve price on the house when it was executed.
But a Gauteng High Court, Johannesburg, judge would have none of it. He questioned why Absa didn’t act on the judgment, take the money that the family could offer over the years, but now wanted to sell the house on execution.
Judge Stuart Wilson suspended the order given 10 years ago and ordered Absa to first speak to the defaulting family to see if there was a chance that they could retain their home.
Eric and Beatrice Gontsana took out a bond with Absa in 2007 for their Orange Farm home.
The principal debt secured by them was R65 000.
The monthly instalments payable in terms of the home loan agreement were said to be R548.03.
By February 2013, the Gontsanas had fallen into arrears of R7 935.85. Absa called up the bond and sought judgment for the full accelerated amount payable, and an order declaring the property specially executable.
In November 2013, the court granted judgment for R60 397.37 plus interest and costs. The judge also made an order declaring the property specially executable.
The judge suspended the order for three months to give the Gontsanas the opportunity to bring payments on their account up to date.
For reasons that are not clear from the court papers, Absa then declined to execute the order for almost a decade. During that time, the Gontsanas paid what they could. By December last year, they had paid just over R55 000 to the lender.
Judge Wilson commented that this was obviously insufficient to discharge the judgment debt plus interest and costs, but it did suggest that the Gontsanas made a serious and sustained effort, over a number of years, to make good on their obligations.
When asked by the judge about the 10-year delay in executing the judgment, counsel for Absa couldn’t provide an answer.
Judge Wilson said Absa’s acceptance of payments from the Gontsanas while still operating their account as if the earlier judgment had never been taken, raised the question of whether the bank’s conduct during that time amounted to a waiver of its right to execute, or an outright abandonment of the judgment.
“Ultimately, however, though the Gontsanas might reasonably have thought that Absa had abandoned Mali AJ’s order, I cannot conclude that such an abandonment is the necessary inference to be drawn from Absa’s conduct. The 10-year delay in acting on the judgment could also be explained by an extraordinary act of leniency.”
The judge said given the Gontsanas’ modest means, and the relatively low value of the loan, Absa’s conduct was consistent with a decision to give the Gontsanas multiple opportunities to make good on the debt, before turning to execution.
“However, if there was leniency, then there was also carelessness. Apart from the garbled records of conversations between Mrs Gontsana and what appears to be Absa’s call centre, I have not been presented with any facts that suggest that Absa ever engaged with the Gontsanas, much less that it did so in a meaningful way,” the judge said.
He said the bank adopted an essentially hands-off approach for nearly 10 years, before applying to this court to finalise the execution process on less than a month’s notice to the Gontsanas.
“If Absa really wanted to assist the Gontsanas, its efforts to do so were ineffectual.”
The judge said whatever its true motive, Absa’s conduct tended to imply that it wished to preserve the option of executing the order all along, and that it sought to exercise that option by bringing this application now.
“Absa advanced a loan to an impecunious family in one of South Africa’s poorest townships. When the Gontsanas failed to repay that loan, Absa took judgment. Having obtained judgment and the right to execute, it then left that judgment to lie fallow for 10 years, all the while accepting payments and no doubt contributing to the impression that it was no longer interested in executing against the Gontsanas’ property.
“After that decade had elapsed, it approached me on the basis that I need only decide what Absa considers to be the technical matter of whether a reserve price should be set.”
The judge said despite being given the opportunity to do so, Absa had not adequately explained what happened in the 10 years during which it declined to execute, why it applied the Gontsanas’ payments to their loan account, and not in reduction of the judgment debt, and why it recently decided to reverse its course and execute against their home after all.
“This conduct is not merely ‘extraneous’ to the pursuit of truth. It is incompatible with that pursuit,” the judge said.
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