Special execution of a debtor’s primary residence; Court confirms position in Standard Bank of South Africa Ltd v Hendricks and Another

Mortgage bonds are those loans secured by the major financial institutions in assisting one to purchase property. The purchaser then has the obligation to ensure repayment of the bond on each and every month thereof. Failure to do so will regard in the securing bank applying for foreclosure.

It was explained in the Standard Bank of South Africa Ltd v Hendricks and Another and Related Cases 2019 (2) SA 620 (WCC), [2019 ALL SA (WCC) case it was explained that foreclosure by a financial institution was regarded as the application for the money judgment and an order of special execution against the immovable property which was mortgaged to secure the loan and which is the primary residence of the judgement debtor must be intrinsically connected and must be brought in the same proceeding and not in separate applications.

It is also extremely important to note that the application must be served personally on the debtor unless the court orders otherwise.

The importance of the above is in order to ensure that the debtor has sufficient knowledge of the proceedings as this, in turn, affects his status.

The application for the money judgment may be postponed together with the application for an order of special execution against the property which is the residence of the judgment debtor. This is in order to effect the above rule which indicates that these two applications may not be conducted separately as they are intrinsically linked to one another and therefore engage a debtor’s Section 26 Constitutional right.

Section 26 of the Constitution grants and guarantees the right of access to adequate housing. With the court in Jafta v Schoeman and Others, Van Rooyen and Others 2005 (2) SA 140 (CC) it was held that “relative to homelessness, to have a home one calls one’s own, even under the most basic circumstances, can be a most empowering and dignifying hum experience”.

Section 26 (3) states that no one is to e evited from their home “without an order of court made after considering all relevant circumstances such as:

  1. Whether Rule 46A introduces substantive legal requirements for obtaining an order for the execution of judgments in mortgage contracts,
  2. Whether to grant judgment for the accelerated full outstanding balance and then postpone the application to declare the property secured by the bind specially executable given the impact on the costs and the potential for attachment and execution of movables,
  3. The circumstances to grant money judgment,
  4. Whether the court has the discretion to decline to grant a default money judgment,
  5. Whether the postponement of the application for the money judgment is object able or desirable,
  6. Whether the court has a discretion, when postponing an application for executability, to afford the mortgagor an opportunity to remedy the default,

The full bench on the Standard Bank case required personal service on the debtor of the notice of a motion for a judgment sounding in money and an order of executability, required that more should be said on the attempt to achieve personal service than simply a reference by the Sheriff to the fact that the debtor was not present or could not be found at the premises. Such personal service could include service at the debtor’s workplace or at their home over the weekend.