IN THE HIGH COURT OF LESOTHO
(COMMERCIAL DIVISION)
HELD AT MASERU CCT/0064/2018
In the matter between
STANDARD LESOTHO BANK LIMITED PLAINTIFF
AND
TLOKOTSI MANTUS MPHALE 1ST DEFENDANT
‘MATHATO CHRISTINAH MPHALE 2ND DEFENDANT
Neutral Citation: Standard Lesotho Bank Limited v Tlokotsi Mphale & Another [2024] LSHC 252 Comm. (11 DECEMBER 2024)
CORAM: MOKHESI J
HEARD: 11 NOVEMBER 2024
DELIVERED: 11 DECEMBER 2024
SUMMARY
CONSTITUTIONAL LAW: Defendants challenging foreclosure and declaration special executability of a mortgaged primary residence on the basis that it constitutes a violation of section 17 of the Constitution of Lesotho 1993 because it seeks to enforce a trifling debt and it ignores their peculiar circumstances- Held, foreclosure and execution in and of itself does not constitute a violation of section 17 of the Constitution in the absence of the allegation that it is coloured by bad faith or abuse of court process- Held further that in the circumstances of the case the mortgaged property should be declared specially executable given that it is evident that the defendants are struggling to pay monthly instalments.
ANNOTATIONS
Books
Badenhorst et al Silberberg and Schoeman’s Law of Property 5th ed.
Legislation
Constitution of Lesotho 1993
Financial Consumer Protection Act, No. 7 of 2022
High Court Litigation Rules 2024
Cases
Lesotho
Adoro v Kou and Others LAC (2000-2004) 514
Attorney General v ‘Mopa LAC (2000-2004)
South Africa
ABSA Bank Ltd v Mokebe 2018 (6) SA 492 (G)
ABSA Bank v Ntsane 2007 (3) SA 554 (T)
Boland Bank Ltd v Pienaar and Another 1988 (3) SA 618 (AD)
Gundwana v Steko Development CC and Others 2011 (3) SA 608 (CC)
Gerber v Stolze and others 1951 (2) SA 166 (T.P.D)
Jaftha v Schoeman and Others 2005 (2) SA 140 (CC)
Standard Bank of South Africa Ltd v Saunderson and Others 2006 (2) SA 264 (SCA)
Canada
R v Oakes (1986) 26 DLR (4th) 200 (SCC)
Journal
Lee Steyn ‘Safe as houses?’ – Balancing a Mortgage’s Security interest with homeowner’s security of tenure.” Law, Democracy & Development Vol. II No.2 (2007) 101)
Reghard Brits “Purging Mortgage Default: Comments on the Right to Reinstate Credit Agreements in terms of the National Credit Act.” Stell LR 2013 (1) 165
JUDGMENT
[1] This matter served before two of my deceased colleagues until it was re-allocated to me on 08 May 2023. It started off with the plaintiff suing out summons on 09 March 2018, against defendants who are married in community of property claiming an accelerated amount still owing under the home loan facility which was extended to them, for failing to honour their monthly instalments repayments obligations under the agreement. In compliance with the conditions of the agreement the defendant had registered the mortgage bond in respect of the defendant’s immovable property known as Plot 14273-351 situate at Sekamaneng, in the Maseru district. Among the reliefs sought is that this property be declared specially executable.
[2] After a prolonged procedural back and forth between the parties, the defendant filed their plea, and in it, raised a special plea couched as follows:
“Special plea
Clause 1 of the deed and its enforcement without consideration of relevant circumstances contravenes Sections 4(1)(M) and 17(1), (4) of the Constitution.
-
The foreclosure by the plaintiff in the circumstances is unjustifiable and disproportionate contravention of Defendants’ entrenched freedom from arbitrary seizure of our property entrenched under Section 4(1)(M) and 17(1) of the Constitution. This precisely because of the potential unconstitutionality of clause 1 of the Deed of Hypothecation which merely on default warrants the foreclosure without the plaintiff taking into account the prevailing circumstances at the time of default and at the time of foreclosure. The private mortgage law (common law) that authorises and gives effect to clause 1 of the Deed is also not necessary in the practical sense in a democratic society such as Lesotho because of its disproportionate nature which creeps into our property rights. Thus, an appropriate balance between the clause and the constitutional imperatives requires the constitutional scrutiny of the clause and the common law by the appropriate invocation of the constitutional jurisdiction, and the judicial development of the common law in terms of Section 156(1) of the Constitution.”
[3] I have deliberately reproduced this special plea verbatim to shed light on the context of this judgment. When on the 14 August 2024 the parties’ legal representatives appeared before me for holding of Pre-trial Conference it was put to counsel that they should consider stating a case in terms of Rule 145 of the High Court Litigation Rules 2024 in view of the fact that the matter is based on common cause facts. Counsel acceded to this proposal and prepared a stated case. Flowing from the stated case, what therefore falls for determination is the constitutionality of the debt collection mechanism which has been triggered by the defendants and depending on the fate of this point whether the reliefs in the summons should succeed. In the stated case the parties state that the issues of law which are in dispute as between themselves are the following:
-
Whether the foreclosure and declaration of executability of the plot in question is arbitrary and disproportionate, and therefore in violation of the Defendants’ property rights under the Constitution.
-
Whether, if so, this court should develop the common law relating to foreclosure.
[4] Common cause facts
The defendants are married in community of property. The plaintiff extended a home loan facility to the defendants on 28 July 2011 in the amount of M315,000.00. As a form of security for the loan, the defendants registered a mortgage bond in respect of their immovable property known as Plot No. 14273-351 situate at Sekamaneng, in the district Maseru. The amount is repayable in 240 months at the monthly instalment of M3,680.04 payable on or before the 30th day of each month. The defendants defaulted in their monthly payments of instalments and as of March 2018 were in arrears in the amount of M37,698.04.
[5] The 1st defendant lost his job and as a result could not contribute the M2,000.00 to the full monthly instalment, leaving only the 2nd defendant paying M1,500.00 monthly instalment. Previously, the defendants fell into arrears in the amounts of M20,000.00 and M26,000.00, respectively, which the plaintiff allowed them to source funds and to settle. At the time of instituting the current proceedings the defendants were again in arrears in the amount of M37,698.04 and the outstanding balance of M312,405.27. When this case was pending hearing, around the year 2020, the defendants paid and cleared the arrears mentioned in the preceding sentence but have again fell below the agreed monthly instalment as the 2nd defendant only affords to pay M2,550.00 monthly. This has resulted in deficit of M1,000.00 per month and the accumulation of new arrears since 2020 to July 2024, in the amount of M29,028.88. The facts in this paragraph were not included in the stated case signed by the parties. They were included by agreement when the matter was heard as, they flow from the defendants’ plea.
[6] The present matter is primarily concerned with the question whether whenever execution is sought against a mortgaged residential property, that infringes upon the freedom from arbitrary seizure of property which is protected under Section 17 of the Constitution of Lesotho 1993. S. 17(4)(a) (iv) provides that the law - in this case the common law - will be constitutionality valid if to the extent that is necessary in a practical sense in a democratic society it provides for interference with this freedom. In short, this case is about the impact of the right of the creditor to execution against residential home of the defaulting debtor in the light of Section 17 of the Constitution, that is whether execution interferes with the freedom against arbitrary seizure of property in every situation. The issues to be determined in this judgment have already been laid out in paragraph [3] of the judgment. It is for that reason that I delve straight into the merits, but before I do that a legal background for purposes of contextualising this judgment is needed. The legal background is the common law principles on foreclosure and declaration of special executability of mortgaged immovable property.
[7] When one is desirous of borrowing money from the financial institution and puts up his/her immovable as a collateral, the drawing up of a bond is as a standard practice. Such a bond is registered in the deeds registry as form of security to the creditor and is binding on the third parties as well. An important term of this agreement is almost always invariably that when the borrower defaults in his payments the creditor will call up this bond and claim not only the only the arrears amount but the arrears plus the full outstanding debt and further claim cancellation of the agreement. This is called debt acceleration. At common law even if the debtor defaults in repaying one instalment the creditor is still entitled to accelerate repayment of the full debt and claim cancellation of the agreement (Badenhorst et al Silberberg and Schoeman’s Law of Property 5th ed. at 367-368).
[8] At common law even a debtor who wants to purge his default and brings its payment up to date, once the creditor has elected to foreclose and to accelerate the full repayment of the debt, foreclosure will not be defeated, it will still proceed ahead. It will however be a different matter where the creditor accepts the late payment (Boland Bank Ltd v Pienaar and Another 1988 (3) SA 618 (AD) at 623D-E). Even if the amount of default is so trifling, the creditor is entitled to foreclose and to accelerate full debt repayment. A clearer example of this situation is a case of ABSA Bank v Ntsane 2007 (3) SA 554 (T) where the creditor sought foreclosure and acceleration of the full debt repayment after the debtors were in arrears in their repayment in the amount of R18.46 (Eighteen Rand Forty-Six Cents) in respect of the remaining debt of R62,042.46 (Sixty Two thousand and Forty-Two Rands, Forty-Six Cents plus interest). To free himself from the clutches of foreclosure, the debtor can make use of its right of redemption, by which it is meant that he must make full payment of the outstanding debt – not only arrears. (Badenhorst et al Silberberg and Schoeman’s Law of Property (above) at 381: see also Reghard Brits “Purging Mortgage Default: Comments on the Right to Reinstate Credit Agreements in terms of the National Credit Act.” Stell LR 2013 (1) 165 at 167).
[9] The harshness of the common law manifest itself in two critical ways: the creditor is entitled to accelerate repayment of the outstanding debt even based on trifling amount of arrears and despite the debtor being willing, consequent to the election to foreclose, to bring the arrears payment to up to date. (see ABSA Bank v Ntsane (above)). As we have seen, even a trifling amount can place the debtor in an unenviable situation if he/she has wants to redeem the mortgage bond when the creditor has elected to foreclose. In that situation he/she has to secure funding for payment of the outstanding debt, and in most if not in all cases it will virtually be impossible for him/her to do so given the large amount that is outstanding. This is because payment of arrears alone does not operate to abort foreclosure once the creditor has elected to pursue such a route. In other words, paying arrears does not have the effect of reinstating the agreement. The learned author Brits “Purging Mortgage Default (above) at p.p. 166-167 puts this position eloquently thus:
“Under common law, the only way to escape the full effects of foreclosure (namely, sale in execution of the mortgaged property) is to make use of the right of redemption. For this right to be invoked the debtor must pay the full outstanding debt, which frees the property from the limited real right of mortgage and redeems the attached property, even after it has been sold in execution (but not after it has been transferred by registration to the auction purchaser). It is not difficult to perceive that the right of redemption does not provide much relief for the debtor who is unable to pay the outstanding judgment debt. Although this option remains available for those who can accumulate the necessary funds, it is little practical use for those who cannot. Only getting the amounts in arrears up to date is not enough to call upon the debtor’s right of redemption, and consequently foreclosure can go ahead…”
[10] The common law position that a trifling amount entitles the creditor to call up the bond has somehow been attenuated - and for the benefit of the consumer - by the promulgation of the Financial Consumer Protection Act, No. 7 of 2022 (“The Act”). Section 21 of this Act provides for the pre-enforcement notice:
“(1) Enforcement proceedings over a credit liability shall commence after a consumer has been –
-
notified of a default; and
-
informed of his rights.
2. A financial service provider shall be required to issue a written notice explaining an amount overdue and how a default can be remedied by a consumer.
3. A financial service provider shall observe a minimum notice period between a pre-enforcement notice and commencement of action, commensurate with a type, commensurate with a type, length and amount of credit as outlined by the Regulator.”
[11] What the introduction of this section has done to the common law is that an amount of trifling as the one in ABSA Bank v Ntsane (above) can hardly form the basis of a decision to foreclose, as I can see no reason why a demand for payment of such a trifling amount of money cannot be met with payment. This is certainly an extreme case but there may be cases where the question whether the amount is trifling will have to be determined by the court based on the circumstances of the case. Whether a debt is trifling is relative to the circumstance of each case (Jaftha v Schoeman and Others 2005 (2) SA 140 (CC) at para. [40]). I come back to this issue in due course. What this section has done is to protect the debtor from the obviously unscrupulous and abusive creditor behaviour where under the common law, upon default – even for a trifling amount which can easily be settled on demand - by the debtor, it would have been entitled to call upon the bond and to claim the accelerated repayment of the full outstanding debt. By placing an obligation on the creditor to put the defaulting debtor on notice that if he does not remedy his default within a certain time, it will go ahead to call up the bond and to claim an accelerated payment of the full outstanding debt, section 21 of the Act enures to the benefit of the debtors by ensuring that they are given a chance remedy their default before foreclosure can be triggered. This is the position of our law currently. If the mortgagor defaults notwithstanding being served with pre-litigation notice the creditor is entitled to foreclose and to claim acceleration of the full debt plus cancelation of the agreement. As a matter of practice, the fact that a debtor was served with a pre-litigation notice must form part of the cause of action and such this notice should be annexed to the originating application or in founding papers in application proceedings, so that the court can be in a position to determine whether, apart from the averment that the notice was served, a reasonable time given to the mortgagor to remedy the default.
[12] Constitutional framework on arbitrary seizure of property
Under Section 4(1) (M) and (2) read with S.17 of the Constitution of Lesotho 1993 everyone is protected against arbitrary seizure of property whether such a seizure is at the hands of a private person or by a person acting in the exercise of a public power. The present case is covered by the provisions of these sections. Section 17(1) of the Constitution protects movable and immovable property and interest over such property from being taken compulsorily or compulsorily acquired except where the acquiring satisfies three conditions. This section places a negative obligation on the public functionaries as well as private individuals from interfering with the freedom from arbitrary seizure of property unless the following conditions are satisfied:
“(a) The taking of possession or acquisition is necessary in the interests of defence, public morality; public health, town and country planning or the development or utilisation of any property in the manner as to promote the public benefit; and
(b) the necessity is such as to afford reasonable justification for the causing of any hardship that may result to any person having an interest in or right over the property; and
(c) provision is made by a law to that taking of possession or acquisition for the prompt payment of full compensation.”
[13] Section 17(4)(a)(iv) provides that nothing done under the authority of any law shall be inconsistent with the negative obligation against interference with freedom from arbitrary seizure of property where such a law in question makes provision that is necessary in a practical sense in a democratic society for the taking of possession or acquisition of any property, interest, or right in the execution of judgment or orders of court in proceedings for the determination of civil rights or obligations.
[14] Respective Parties’ arguments
Mr Mpaka for the plaintiff contends that foreclosure and subsequent execution against immovables is not an arbitrary seizure of property within the context of Section 17 of the Constitution as the mortgagee still has to apply to the court to enforce it and to declare the property specially executable. He argued that the sanctity of contracts demands that the court enforce the contracts freely concluded as this is important for the economy as in the “mortgage context, the assurance that the mortgage can rely on, and realise his real right of security acquired against hypothecated property, is important in promoting the sanctity of contract. The pacta sunt servanda principle provides that once a valid binding contract has been formed, when one breaches the agreement, the other is entitled to hold the former to it and is terms.”
[15] The argument that the mortgagor who has freely concluded the contract by putting up his immovable as a collateral should be enforced, is understandable and a valid one. This argument implies that by voluntarily concluding a mortgage agreement a debtor assumes the risk of losing his home on default of payment, and therefore should not complain about the looming loss of the home when it follows his default in repaying his debt. In these circumstances, therefore, the argument went, execution does not constitute arbitrary seizure of property within the meaning of Section 17 of the Constitution. However, notwithstanding the soundness of this argument it masks something more profoundly untenable and fallacious if it is posited and applied as a rule of thumb. It was rejected in the case of Gundwana v Steko Development CC and Others 2011 (3) SA 608 (CC) at para. [44], where the court observed that the fact that mortgagor willingly hypothecates his property on the understanding that it will be executed upon his default does not cover a situation where the execution is sought in bad faith or constitutes an abuse of court process.
[16] Mr Maqakachane, for the defendants, on the one hand contended that the defendants’ rights in the property were threatened by the foreclosure proceedings instituted by the plaintiff on the basis of the common law especially in this case where the defendants argue that the arrears amount of M37,000.00 was to trifling in view of the fact that they continue to pay part of monthly instalment.
[17] Discussion
Extension of credit by credit providers on the basis of mortgage bond performs an important socio-economic function in helping individuals to acquire or build properties they would otherwise not afford because of the financial implications involved. The transaction is beneficial to both the creditor and the borrower. The creditor expects to make a return on the lending, while the borrower will have a roof over his head thereby ensuring the protection of his dignity. Quite apart from securing credit to develop a dwelling and in the process putting such an immovable as security, the borrower may use an existing house to raise capital by putting it as a collateral through the instrumentality of a mortgage bond. So, as already stated, a mortgage bond plays an important socio-economic role in lives of the citizens. (ABSA Bank Ltd v Mokebe 2018 (6) SA 492 (G) at para. [1]). It is without doubt that once the immovable property has been put up as a security the property rights of the borrower will be curtailed because as long as the debt remains unpaid the creditor has a limited real right to have the property sold in case of default to realise the outstanding debt (Standard Bank of South Africa Ltd v Saunderson and Others 2006 (2) SA 264 (SCA) (15 December 2005)). The debtor cannot alienate the property until the mortgage debt has been paid in full and the bond accordingly cancelled.
[18] Does foreclosure and declaration of special executability of primary homes infringe on the freedom from arbitrary seizure of property?
What is crucial to the present inquiry is whether foreclosure and execution process infringes the freedom from arbitrary seizure of property? It is important to recall, as discussed earlier in the judgment, that foreclosure entitles the creditor to cancel the loan and to claim payment of the remaining debt in full – debt acceleration. The size of the default does not matter. The amount owing may be trifling, but in terms of the common law the creditor is free to foreclose and claim accelerated repayment of the balance of the debt and to seek an order to have the mortgaged property declared specially executable and liable for execution without having to go through the rigours of Rule 164 of the High Court litigation Rules 2024.
[19] It should be stated, however, that the fact that a trifling debt may lead to execution being levied against the property of debtor is not relevant to the question whether the freedom from arbitrary seizure has been infringed by the measure, which in this case, is the calling up of the bond and claiming of special executability of the immovable property. The trifling nature of the debt will only be relevant in so far as the justifiability of the measure is in question (Jaftha v Schoeman and Others, Van Rooyen v Stoltz and Others 2005 (2) SA 140 (CC) at para. [35]). Justifiability is discussed in the ensuing paragraph.
[20] Is the infringement justified?
Whether the infringement is justified is judged based on the test articulated in R v Oakes (1986) 26 DLR (4th) 200 (SCC) at 226-227 adopted in Attorney General v ‘Mopa LAC (2000-2004) 426 at 439. The test entails determining whether the limitation of a right is reasonable and “demonstrably justified in a free and democratic society.” The first facet of this test being the determination of the purpose of the limitation of a right, and the second fact being the proportionality of the means chosen to limit the right. Proportionality has three components, and this has been stated in R v Oakes (above) as follows:
“There are, in my view, three important components of a proportionality test. First, the measures adopted must be carefully designed to achieve the objective in question. They must be arbitrary, unfair or based on irrational considerations. In short, they must be rationally connected to the objective. Secondly, the means, even if rationally connected to the objective in this first sense should impair “as little as possible” the right or freedom in question: R v Big M Drugmart Limited (1985) 18 DLR (4th) 321 at 352. Thirdly there must be a proportionality between the effects of the measure which are responsible for limiting the charter right or freedom, and the objective which has been identified as “of sufficient importance.”
“The onus is the person averring that the right or freedom is justified to prove that averment “clearly and convincingly” (Attorney General v ‘Mopa (above) at 440D).
[21] As already seen mortgage bond serves an indispensable socio-economic purpose. Foreclosure satisfies the first facet of the test: It helps the creditor to call up the bond and to accelerate repayment of the full balance of the debt on the default of the debtor. The declaration of special executability is merely a mechanism for collecting the outstanding debt through the sale of the mortgaged immovable property, and it further helps the creditor to circumvent the process which is provided in the High Court Rules of going first for the movables and when they are not enough to satisfy the judgment debt, to then go for the immovables.
[22] Rule 164 of the High Court Rules assumes a more protective stance for debtors on the issue of execution of immovable property where such is the debtor’s primary home or is leased to a third party. Rule 164 (2)(C) states that the order of special executability of an immovable property in a case where it is a primary home where movables are not sufficient to satisfy a judgment debt, may not be made unless the court will have considered all the relevant circumstances with a view of finding whether there is a less drastic alternative of realising the amount owed without going the route of selling the primary home of the debtor.
[23] It will be observed from its wording of subrule (1) that it does not cater for mortgaged properties. If provides that the Registrar may not issue out a writ against the defendant’s immovable property unless his/her movables are insufficient to satisfy the judgment. In which case, it is only then that an order of special executability against the immovable property may be made. Subrule (2) goes further to state that where the immovable is the primary home against which an order of special executability is sought, the court may not make such an order unless it will have examined all circumstances of the creditor with a view of finding whether there is an alternative to the sale in execution of the primary home, which alternative measure may include attaching the debtor’s alternative immovable property.
[24] Mortgaged property is treated differently. Its execution is governed by a more than a century old practice. It entitled creditor to circumvent the route of first attaching the debtor’s movable property and then his immovable in the event of the former not being sufficient to satisfy the judgment debt (Gerber v Stolze and Others 1951 (2) SA 166 (T.P.D) at 172E-H).
[25] Is foreclosure and declaration immovable primary residence specially executable, proportional?
In my judgment this measure satisfies all the components of proportionality test. The argument that in of itself constitutes an arbitrary seizure of property, is unconvincing. When a debtor hypothecates his immovable property, he consents to the curtailing of his right to property and ownership. His debt “is fused into the title to the property” (Standard Bank of South Africa v Saunderson and Others (above) at para. [18]). Supreme Court of Appeal in this judgment per Cameron and Nugent JJA made an important point that it would be hard to find a case where a court would not grant execution against hypothecated immovable property in the absence of an allegation of abuse of court procedure (at para. [19]). I agree with these sentiments as being applicable in the context of the present case.
[26] It is therefore apparent that a matter would take a different turn when it is contended that the measure which is being sought to recover a debt constitutes an abuse of court procedure or is pursued in bad faith. Gundwana v Steko Development CC and Others 2011 (3) SA 608 (CC) at para. [44]. (See discussion in Lee Steyn ‘Safe as houses?’ – Balancing a Mortgage’s Security interest with homeowner’s security of tenure.” Law, Democracy & Development Vol. II No.2 (2007) 101). It would certainly constitute an abuse of court procedure for the creditor to call up a bond and seek an order declaring the immovable property specially executable for a trifling amount in arrears which could be satisfied by executing against the debtor’s movable property. This would, for example, be a case where in a twenty-year mortgage bond a debtor defaults on the nineteenth year, when before, he had not defaulted and has enough alternative immovable and movable properties to satisfy the debt. It would in my view constitutes an abuse of court of process not to go for such alternatives but the mortgaged property. I am by no means saying this is the only example, but in these circumstances, it might be difficult for the creditor to justify that the measure is compliant with Section 17 of the Constitution as the effect would be to compulsorily possess the debtor’s primary home in circumstances where there was an abuse of court process or bad faith. Whether a debt is trifling should be judged against the circumstances of each case (Jaftha v Schoeman and Others (above) at paras. [40]-[41]).
[27] Some of the factors which the court may consider in determining the proportionality of the measure when it is alleged that it is coloured by the abuse of court process or bad faith were provided in ABSA Bank Ltd v Ntsane and Another 2007 (3) SA 554 (T.P.D) at para. [73]:
“These factors include the value of the bonded property; the past history of payments made by the debtor; the amount outstanding on the bond; any assets other than immovable property the debtor might possess, particularly movable assets capable of easy attachment and sale in execution; any other debts that the bondholder is aware of, …, whether is employed or not, etc.”
[28] Foreclosure and debt recovery in the form of execution is part and parcel of our daily economic life as a democratic country. It is a measure through which debt collection is carried out under the hand and supervision of the court. It is reasonable and ‘demonstrably justified in a free and democratic society’ such as ours.
[29] Reverting to the facts of the present matter, it is the defendants’ case that clause 1 of the Deed of Hypothecation which provides for foreclosure and acceleration of the full debt repayment is unconstitutional for violating the provisions of Section 17 of the Constitution. They argue that it is unconstitutional for being arbitrary and disproportionate as the declaration of executability of their property is sought based on their inability to settle what they consider to be trifling arrears in the amount of M37,000.00 in circumstances where they continued to pay their instalments, and they are in the thirteenth year of the twenty-year bond.
[30] The defendants’ case is not that the measures of debt recovery which the plaintiff has triggered constitutes an abuse of court process or is mala fide. Their complaint is rather that it unconstitutional for not taking into account the prevailing circumstances of the defendants, which I understand to mean that one of the 1st defendant is unemployed, the house is their primary residence and that they are continuing to pay off the debt. I have already ruled that foreclosure in and of itself is does not offend section 17 of the Constitution. For it to offend the Constitution something must colour it, and that is when the measure constitutes an abuse of court process or is pursued in bad faith. I have already ruled that foreclosure and execution based on a trifling debt in and of itself does not infringe section 17 of the Constitution. It will do so if it is coloured by bad faith or abuse of court process. This is not their case, but even if it was, I do not see how in the present matter foreclosure and execution can be said to constitute abuse of court process or is being pursued in bad faith. I deal with this issue in the ensuing paragraph.
[31] When the action was instituted the defendants were in arrears in the amount of M37,000.00 which they paid off sometime in 2020 during the pendency of this case. But this notwithstanding, they are still in arrears because in July 2024 they were in arrears by M29,028.88, and this amount is accumulating. This is because the 1st defendant lost his job resulting in the 2nd defendant being the only one shouldering the responsibility of paying the debt. She only affords a monthly instalment of M2,500.00, less than M1,000.00 of what they are expected to pay in terms of the contract. In August 2024 the balance on the principal amount was at M218, 473.00. It should be mentioned that apart from the 1st defendant being unemployed, the defendants also stay with their elderly mother and children. However, what cannot be denied is that the defendants are struggling to service the debt according to the terms the parties agreed. The monthly instalments the 2nd defendant is paying is way below what should be paid. The history of their default is quite profound and unending as has been stated. In the context of this case the arrears which the defendants are continuously accumulating are not trifling as they would like this court to belief. If they struggle to pay a full monthly instalment of M3,500.00 one, clearly an amount more than M29,000.00 plus interests is quite substantial. In my judgment the measure of debt recovery which the plaintiff has activated does not constitute an abuse of court process nor can I find the plaintiff to be acting in bad faith.
[32] In the result the following order is made:
-
The property that is subject of the mortgage bond is declared to be specially executable.
-
The plaintiff is awarded costs on attorney and client scale as agreed.
-
In the exercise of this court’s inherent power to regulate its own procedures in the interests of the proper administration of justice (Adoro v Kou and Others LAC (2000-2004) 514 at para.[11]), the following practice direction is issued regarding matters involving a mortgage bond over a primary home where an order of special executability is sought in relation to:
-
To set out the cause of action, the originating application should contain an averment that pre-litigation Notice in terms of Section 21 of the Financial Consumer Protection Act 2022 was issued.
-
Pre-litigation notice referred to in the preceding paragraph of this order should be annexed to the originating application.
-
In the originating application, the respondent should be alerted to the provisions of Section 17 of the Constitution which prohibits everyone from interfering with the freedom from arbitrary seizure of property. The respondent should be invited to place information in his answer if he/she claims that an order of special executability of her primary residence will violate his/her freedom from arbitrary seizure of property.
______________________
MOKHESI J
For the Plaintiff: Adv. T. Mpaka
For the Defendants: Adv. T. Maqakachane