Cape Town Community Housing finally meets its match!

Five families in Newfields Village face their verdict for their evictions on the 10/06/2010 (on the day the opening ceremony of the World Cup 2010 will be held).

Background

In 1994 President Nelson Mandela promised to build one million houses and accordingly the City of Cape Town and the National Housing Finance Company (NHFC) tried to make this dream a reality for the poorest of the poor by forming a Section 21 Company called Cape Town Community Housing Company. Eight years ago CTCHC started to build the worst houses in the history of our country with both latent and patent defects. Accordingly, the residents of the nine villages (Newfields Village, Hanover Park Phase 1, 2 and 3, Luyoloville, East Ridge, Woodridge, Manenberg (Tornado Victims) and Phillipi) went on a rental boycott, had marches to the Company, they occupied their administration office, they handed over numerous memorandums of demands and even occupied the administration building in Tijger Valley. The company changed directorship, because of bad management of fances and the pressure from the different communities. All that the community wants is to honour the original understanding and agreements made that they will get a subsidized houses and pay-off the balance over four years with affordable rental.

Because of the struggle for their own homes, unjust administrative action as well as legal action in the form of eviction applications by the Cape Town Community Housing Company.

The Company, because of the bad Installment Purchase Agreement (IPA) have attempted to reformulate the original contract by calling the new contract The Affordability Programme. As a result, all the families have attempted to unknowingly sign this proposed contract with the goal of saving the bad houses, paid by their own subsidies, that they made their homes.

Many families evictions’ are being sort by the Company, but the families have managed to secure the assistance of an attorney as well as an advocate and have through them presented their case in the Wynberg Magistrers Court. We are going back to Wynberg Court together will all the affected communities on the 10th of June 2010.

We will attach our heads of argument to this press release so that everybody in South Africa and the World can see what the struggles have been about for the past eight years.

For more information, please contact:

Gary: 0723925859

Ashraf: 0761861408

Attorney: Mr. S. Parker
Our heads of arguments follow the story:

IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT, CAPE TOWN)

CASE NO: 21177/09

In the matter between:

CAPE TOWN COMMUNITY HOUSING

CO (PTY) LTD Applicant

and

IKERAAM SAMUELS First Respondent

RUWAYDA SAMUELS Second Respondent

SUBMISSIONS ON BEHALF OF THE FIRST AND SECOND RESPONDENTS

1 The Applicant instituted action proceedings for the eviction of the Respondents wherein it claimed that the Respondents were in breach of the instalment purchase agreement (“IPA”) in terms of which they purchased a house from the Applicant. The Applicant contends that the Respondents had failed to make payment of the required instalments pursuant to the instalment purchase agreement and hence pursuant to the provisions of clause 17 of the Agreement:

1.1 were entitled to cancel the agreement;

1.2 repossess the property … ;

2 In the action proceedings the Plaintiff also sought payment of the sum of R35 583,04 and ejectment of the Respondents.

Record: pp. 4-5 of the bundle

3 The Applicant filed an application for summary judgment which was withdrawn from the Court roll. Receipt of the summons was signed by the Respondents on 5 October 2009.

Record: p. 44 of the bundle

4 On 15 October 2009 the Applicant brought an application for summary judgment to be heard on 23 November 2009.

Record: p. 46 of the bundle

5 In support of the application for summary judgment, Werner Jurgens (hereinafter “Jurgens”), the financial manager, filed an affidavit stating that the Respondents had no bona fide defence.

Record: p. 47 – 48 of the bundle

6 Applicant’s ex parte notice pursuant to section 4(2) & (4)(5) of the PIE Act 19 of 1998 was issued out of this Honourable Court on 30 October 2009.

Record: p. 49 – 51 of the bundle

7 The application in terms of section 4(2) & 4(5) of Act 19 of 1998 although dated 27 October 2009, was served on the Applicant on 26 October 2009.

Record: pp. 53 – 55

Four grounds for the eviction are listed.

Record: 54

They are summoned to appear on 23 November 2009.

8 The Respondents filed answering opposing affidavits, opposing the summary judgment application. The opposing affidavits in the summary judgment should be read and incorporated in the opposing affidavit in opposition to the PIE application.

Record: p. 62

9 On 14 December 2009 the application for summary judgment was withdrawn.

Record: p. 70 of the bundle

10 The Applicant in a bizarre and unusual step implemented its own procedure by filing its replying affidavit to the affidavit filed in opposition to the summary judgment procedure.

Record: p. 72 of the bundle

11 Applications in terms of the Magistrate Court Rules are governed by Rule 55. Applicants have not followed the conventional procedure of filing a founding affidavit grinding out its case to be met by an answering affidavit to which the Applicant could replicate by filing a replying affidavit.

12 Pursuant to the provisions of Rule 55(2):

“An application need not be supported by affidavit but in the event of any dispute arising after the facts, the Court may –

(a) receive evidence either viva voce or by affidavit and try the issues in dispute in summary manner; or

(b) either the issue shall be tried by way of action, … that applicant shall be plaintiff and the respondent be defendant … “.

13 It is essential that the issues in the founding papers be defined.

See: Haupt t/a Soft Copy v Brewers Marketing Intelligence (Pty) Ltd 2006 (4) SA 458 (SCA) at 469 A.

14 In application proceedings, the affidavits take the place not only of the pleadings in an action, but also of the essential evidence which would be led at a trial. (My emphasis.)

See: Transnet Limited v Rubenstein 2006 (1) SA 591 (SCA) at 600 G.

In motion proceedings the Applicant may “be granted (relief) if those facts averred in the Applicant’s affidavits which had been admitted by the Respondent, together with the facts alleged by the Respondent, justify such an order”.

Plascon-Evans Paints v Van Riebeeck Paints 1984 (3) 623 H-I:

“It is correct that, where in proceedings on notice of motion disputes of fact have arise on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant’s affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order.”

15 The rule is that the allegations upon which the Applicant relies must appear in his affidavit, as he will not generally be allowed to supplement the affidavit by adducing supporting facts in the replying affidavit.

See: National Council of Societies for the Prevention of Cruelty to Animals v Open Shore 2008 (5) SA 339 SCA at 349 A – B

16 The Applicant has set out its entire case in its replying affidavit. In this regard, see Minister of Environmental Affairs & Tourism v Bato Star Fishing (Pty) Ltd; Minister of Environmental Affairs & Tourism v Phambile Fisheries (Pty) Ltd 2003 (6) 407 SCA 439 G-H, Schutz JA says as follows at p. 55-11

“There is one other matter that I am compelled to mention – replying affidavits. In the treat majority of cases the replying affidavit should be by far the shortest. But in practice it is very often by far the longest – and the most valueless. It was so in these reviews. The Respondent, who were the applicants below, filed replying affidavits of inordinate length. Being forced to wade through their almost endless repetition when the pleading of the case is all but over brings about irritation, not persuasion. It is time that the courts declare war on unnecessarily prolix replying affidavits and upon those who inflate them.”

17 In Van Zyl v Government of Republic of South Africa 2008 (3) SA 294 SCA at 307 G – H; Harms AJP, after quoting Schutz JA articulates as follows:

“A reply in this form is an abuse of the Court process and instead of wasting judicial time in analysing it sentence by sentence and paragraph by paragraph such affidavits should not only give rise to adverse costs orders but should be struck out as a whole … mero moto … “.

18 It is submitted that the entire application is flawed and not in accordance with the procedure of the Court and be dismissed on this ground alone.

19 The Applicant did not bring a formal application as contended for in paragraph (3) of the Applicant’s heads. It brought a formal application pursuant to the PIE Act to be heard on the day of the summary judgment.

Record: p. 53

20 It merely indicates a “NOTICE OF APPLICATION FOR EVICTION” from the Applicant’s property.

21 It does not constitute a formal application with a supporting affidavit which would constitute a proper application.

22 The Applicant concedes in paragraph 5 of its principal submissions that the Respondents had filed an answering affidavit in opposition to the summary judgment wherein they state their defences.

23 Having regard to the test as laid down in the Plascon-Evans case, it is submitted that the application be dismissed alternatively that the matter be tried by way of action and evidence be led on the following issues:

23.1 whether the houses at the time when the Respondents took possession were suitable for human habitation;

23.2 whether the cause of action as relied upon by the Applicant is governed by section 4 or 6 of the PIE Act.

DEFENCES RAISED IN THE SUMMARY JUDGMENT AFFIDAVIT:

24 The Respondents entered into the IPA in terms of which they purchased land which ought to have been constructed in accordance with the building plan, that the building plans had to comply with the National Building Regulation Standards (“NBRS”) and that they entered into the IPA on the basis of the Applicant’s representation and that it would at all times comply with the law.

Record: p. 63 of the bundle, paras 2.1, 2.2, 2.3 and 2.4

25 The Respondents contend in summary that:

25.1 The construction of the houses had to comply with NBRS Act, 103 of 1977;

25.2 That the houses contained patent and latent defects and dangerous to be habitable;

25.3 The National Home Builders Registration Council (“NHBRC”) had conducted an audit of the houses and found its construction methods wanting;

25.4 Because of the extreme poor construction of the house, their stopped their monthly payments;

25.5 As soon as the remedial work had been completed they would then resume their payments;

25.6 They remain committed to pay for the house provided by the Applicant but that it delivers a house that complies with plans approved by the local authority which in turns comply with National Building Regulation Standards and is fit for occupation.

Record: p. 64 of the bundle, para 2.7

EXCEPTIO NON ADIMPLETI CONTRACTUS:

26 The Applicant contends that the exceptio non adimpleti contractus does not avail the Respondents in this matter as they had remedies available pursuant to the IPA agreement.

27 The IPA agreement was signed was signed on 21 December 2000.

Record: p. 6 of the bundle

28 The Applicant contends that the Respondents should have invoked clause 7.2 of the IPA agreement instead of withholding the payment.

29 The crucial question in this matter is whether the Applicant had performed prior to being entitled to even have received any payment in this matter during the years 2000, 2001, 2002, 2003, 2004.

30 The Respondents signed an addendum to IPA agreement in 2004, date and month unknown.

31 It is submitted that the exceptio non adimpleti contractus on the Applicant’s own version must avail the Respondents in this matter. The reasons are as follows:

31.1 Jurgens in his replying affidavit at paragraph 9.1 (record: p. 78 of the bundle) contends as follows:

“As far as the issue of defect is concerned, I point out that the Respondents provide absolutely no details of alleged defects in their house … . I certainly deny that the house, or any of the others, was ever unfit for habitation. They don’t explain how they then managed to live in the house, if it was unfit for habitation.”

31.2 The aforesaid averment is materially contradicted when he contends in paragraph 9.7 – that the “first round of remedial work had cost the Applicant R10 million and an additional R19 million was spent in dealing with all defects. Approximately 2500 were involved, all of which were built by the Applicant at that stage.”

Record: p. 80, para 9.7 – 9.8 of the bundle

31.3 He relies on the NHBRC completion certificate, annexure “WJ9? in contending that all necessary remedial work had been completed.

Record: p. 80, para 9.8 of the bundle

31.4 Despite the aforesaid averments, Jurgens on p. 81, para 10.4 of the bundle contends as follows:

“I deny, again that the Respondents’ house was unfit for habitation.”

31.5 If Respondents’ house was fit for occupation in the year 2000 when the IPA was concluded, why then was a request for the certificate of occupancy only made on 7 March 2005?.

Record: p. 101, annexure “WJ7? of the bundle.

31.6 The certificate of occupancy was allegedly granted, date and time unknown.

Record: p. 102, annexure “WJ8? of the bundle.

Oral evidence is required on this crucial issue.

31.7 What is however clear, is that the NHBRC certificate is completed on 24 March 2009 which states that “… work had been inspected and found the completed work to comply with the rectification specifications”.

Record: p. 103 of the bundle

31.8 It is important to note that the Applicant concedes that the remedial work had been done based on the NHBRC certificate.

Record: p. 80, para 9.8

31.9 Why would the Applicant enter into further addendum IPA agreement to renegotiate the capital and the interest in 2004?

Record: p. 108, annexure “WJ11?

31.10 It is submitted that the Respondents have a valid defence on the Applicant’s own version. See section 4(8) of Act 19 of 1998

Record: p. 80, para 9.7 and 9.8 of the bundle

Record: p. 102, 103, of the bundle

32 When the Defendant denies that the Plaintiff has made performance, the onus of proof is on the Plaintiff.

See: Edward A Shaw & Company (Pty) Ltd v Electronic Diamond Processing (Pty) Ltd 1971 (1) SA 581 (C);

LAWSA, p. 247, Vol 5 part 1, First Re-Issue

33 It is submitted that the contentions raised in Applicant’s principal submissions under paragraphs 12.1 and 12.2 and further sub-paragraphs wherein they rely on clause 7.2 does not avail the Respondents at all in this matter.

34 The voetstoots clause invoked by the Applicant is academic as the Applicant admits non-performance by requesting the certificate of occupancy in only 2005 which was granted in 2009.

35 The contract concluded in 2000 with the greatest of respect, contemplated and demanded reciprocity of performance on the part of the Applicant. It is clear on the Applicant’s papers, that it failed miserably to perform.

36 Applicant’s contention that Respondents had not given any information with regard to the patent and latent defects, with the greatest of respect, is a desperate attempt to deflect the Court’s attention from the Applicant’s own non-performance.

DID THE APPLICANT FALL FOUL OF SECTION 11 READ TOGETHER WITH SECTION 103 OF THE NATIONAL CREDIT ACT 34 OF 2005?:

37 Section 101 provides as follows:

“101(1) A credit agreement must not require payment by the consumer of any money or other consideration, except-

(a) the principal debt, being the amount referred in terms of agreement, plus the value of any item contemplated in section 102. “

See in this regard also section 102, 103, 104 and 105.

38 It is submitted that this matter be referred to the National Credit Regulator to enquire whether there are any contraventions of the Act.

39 It is submitted that there are, based on the following considerations.

39.1 The agreement was entered into on 21 December 2000.

Record: p. 6 of the bundle

40 Jurgens admits at para 4

40.1 ” … The Applicant then enters into an Instalment Purchase Agreement IPA (“IPA”) with the purchaser for the amount loaned, namely R18 662,00. The Applicant obviously does not need to recover the municipal subvention or the institutional subsidy, but it does have to repay the loan to the financial institution, with interest. In effect, the purchaser is therefore repaying the capital amount at an interest rate based on a set number of points above what the Applicant’s financing costs are. This is calculated to essentially cover Applicant’s operational expenses. The only profit the Applicant makes is on the interest which it charges, which is re-invested in the developments. No dividends are paid to shareholders. “

40.2 The Applicant contends further – under paragraph 13.5:

“My understanding of the in duplum rule is that the total outstanding balance should never be more than double the initial selling price/opening balance. If regard is had to the payment schedule “WJ10?, the opening balance of R32 666,79 represents the selling price, and it will be noted that at no stage did the outstanding balance come anywhere close to the amounting to double that figure.”

41 Jurgens with respect is misleading this Honourable Court. The selling price was never R32 666,79. The selling price was at all times R18 451,20.

Record: p. 108 of the bundle : the addendum to IPA

Record: p. 112 of the bundle with regard to re-calculation of the loan

42 The total interest from 24 May 2004 until 31 January 2010 amounts to R28 815,60.

Record: p. 104 of the bundle, annexure “WJ10?

IS THE APPLICANT ENTITLED TO AN EVICTION ORDER?:

43 It is submitted that if section 4 is to be applied, as contended for by the Applicant, (see in this regard the notices pursuant to Act 19 of 1998 – then the Defendant has shown a valid defence on the Applicant’s own version and that the application for eviction be dismissed.)

44 Furthermore pursuant to section 9 of 1998 this Court will have to take into account all relevant factors including the period the unlawful occupier had resided on the land in question. All relevant factors must refer to the defective performance delivered by the Applicant in this regard.

45 It is submitted that the Respondents have clearly established a defence pursuant to the provisions of section 4(8) of the Act.

46 Respondents contend that section 6 is apropos to these proceedings as Jurgens himself confesses that the Applicant was formed in 1998 with a view to providing affordable housing

“… provided in terms of the initiative of the National, Provincial and Local Government out of the State Subsidies. The National, Provincial and Local Government therefore was participating in this very practice scheme launched by the Applicant.”

Record: p. 75 – 76 of the bundle

47 The Applicant’s counsel conceded that the City of Cape Town was a 50% shareholder in the Applicant’s business when the project was launched. A corroboratory document will be handed to Court to this effect which reflects that the City of Cape Town and the National Housing Finance Corporation each hold a 50% sharing in the Cape Town Community Housing Company (Pty) Ltd.

48 Jurgens does not in his replying affidavit state that the City of Cape Town is no longer a member of this initiative.

49 It is therefore of the utmost importance that the matter be referred for oral evidence in this regard to test whether section 4 or 6 is applicable.

MEDIATION:

50 Should this Court not dismiss the application or refer the matter for oral evidence, then this matter should be referred to mediation pursuant to section 7 of Act 19 of 1998. In this regard the Court is referred to the decision of Port Elizabeth Municipality v Various Occupiers 2005 (1) SA 217. In the aforesaid case Sachs on p. 241 E-F articulates as follows:

“One of the relevant circumstances in deciding whether an eviction order would be just and equitable would be whether mediation has been tried.”

He refers to a judgment by Goldstone J referring to S v Govender 1986 (3) SA 969 T at 971 where Goldstone J says that the power to make an ejectment order would seriously affect the lives of person or persons to be evicted. Further argument will be advanced in this regard.

51 It is submitted that in the event of the Court finding that section 6 finds application, then this Court’s attention is drawn to:

51.1 section 6, sub-paragraphs (1)(a) and (b); and

51.2 section 6(1)(3)(a) and (b).

52 It is submitted that an order in the following terms be granted:

52.1 that the application for eviction be dismissed;

52.2 that Cape Town Municipality pursuant to the provisions of section 7 appoint suitable experts to facilitate a meeting of all interested parties in order to attempt to mediate and settle the dispute with regard to the further occupation of the Respondents;

52.3 that the Respondents pending the outcome of such a meeting forthwith pay the initial amount of instalment as set out in the agreement dated 12 December 2000;

52.4 that the Credit Regulator pursuant to provision 15 investigate a complaint to be lodged by the Respondents concerning alleged contraventions of the National Credit Act 34 of 2005.

_____________________

MOHAMED SALIE

CHAMBERS

30 April 2010

LIST OF AUTHORITIES

1. Haupt t/a Soft Copy v Brewers Marketing Intelligence (Pty) Ltd 2006 (4) SA 458 (SCA)

2. Transnet Limited v Rubenstein 2006 (1) SA 591 (SCA)

3. National Council of Societies for the Prevention of Cruelty to Animals v Open Shore 2008 (5) SA 339 SCA

4. Minister of Environmental Affairs & Tourism v Bato Star Fishing (Pty) Ltd; Minister of Environmental Affairs & Tourism v Phambile Fisheries (Pty) Ltd 2003 (6) 407 SCA

5. Van Zyl v Government of Republic of South Africa 2008 (3) SA 294 SCA;

6. Edward A Shaw & Company (Pty) Ltd v Electronic Diamond Processing (Pty) Ltd 1971 (1) SA

7. LAWSA, p. 247, Vol 5 part 1, First Re-Issue

8. Port Elizabeth Municipality v Various Occupiers 2005 (1) SA

9. Plascon-Evans Paints v Van Riebeeck Paints 1984 (3)