in the constitutional court of south africadownloads.newera.org.za/newera/1 notice of motion.pdfin...
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[1]
NOTICE OF MOTION
(to Registrar and Respondent’s)
IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
Case No. …………………
In the matter between:
MICHAL JULIUS TELLINGER
Applicant
~and~
THE STANDARD BANK OF SOUTH AFRICA LIMITED 1st Respondent THE SOUTH AFRICAN RESERVE BANK 2nd Respondent THE MINISTER OF FINANCE 3rd Respondent
Take notice that MICHAL JULIUS TELLINGER (hereinafter called The Applicant) intends to
make application to this Court for an order;-
PART A
(a) Declaring sections of the Bank Act, Act 94 of 1990 and subsequent rules so promulgated in
terms of the empowering act to be inconsistent with the Constitution, 1996 in so far as the
practices of commercial banks, that inter alia include securitisation, seignorage, fractional
reserve system and/ or artificial money creation and/ or principles relating thereto, either by
[2]
simulation or alike are in conflict with Human Rights, bonus mores, public policy, financial
hardship, arbetry deprivation of homes in terms of section 25 and prejudice caused in such
financial dealings.
(b) Declaring sections of the South African Reserve Bank Act, Act 90 of 1989 and subsequent
rules so promulgated in terms of the empowering act to be inconsistent with the
Constitution, 1996 in so far as the practices of the Central Bank, that inter alia include
securitisation, seignorage, fractional reserve system and/ or artificial money creation and/ or
principals relating thereto, either by simulation or alike are in conflict with Human Rights,
bonus mores, public policy, financial hardship, indirect causation of arbetry deprivation of
homes in terms of section 25 and prejudice caused in such financial dealings.
(c) That such Government Policies, Economical Policies and/ or related policies and/ or
legislation related thereto, inclusive of rules to be inconsistent with the Constitution, 1996 in
so far as the practices of the Central Bank, that inter alia include securitisation, seignorage,
fractional reserve system and/ or artificial money creation and/ or principals relating thereto,
either by simulation or alike are in conflict with Human Rights, bonus mores, public policy,
financial hardship, indirect causation of arbetry deprivation of homes in terms of section 25
and prejudice caused in such financial dealings.
(d) That, if found, by this Honourable Court that neither statue, rule or policy specifically
authorise the use of inter alia securitisation, seignorage, fractional reserve system and/ or
artificial money creation and/ or principals relating thereto, either by simulation or alike, the
3rd Respondent institute such action deemed necessary and appropriate to stop the 1st and 2nd
Respondent immediately from conducting such business and where appropriate declare by
certification all monies so loaned to be inconsistence with the Constitution.
[3]
(e) If the Honourable Court finds such inconsistencies as per paragraph (a), (b) and/ or (c) the
Applicant’s prayers are as follows;
i. An amount equal to R15’000.000.00 (fifteen million) be paid to the Applicant for
general, specific and reputational damages;
ii. The 1st and 2nd Respondent to pay the cost of these proceedings, jointly and severally,
the one to pay the other to be set free;
iii. The Honourable Court to determine the extent and application of amendments, if any,
or introduction of a bill, as the Honourable Court finds just and equitable;
iv. Further and/ or alternative relieve.
PART B
(f) Setting aside the whole of the Judgment and order of the South Gauteng High Court,
Johannesburg under case number 13340/2011 [the Court below] that was heard by
Honourable Judge M. M. Mabesele and replacing same with such order deemed just and
equitable; or in the alternative,
(g) The aforesaid Judgment, after the determination of the merits of this case, be referred back
to the Court below for trial; or in the alternative,
(h) The aforesaid Judgment, after determination of the merits of this case, be referred back to
the Court below, allowing the 1st Respondent and Applicant to amend their filings so to
bring same in line to the directions of the this Honourable Courts; or in the alternative,
(i) That were this Honourable Court finds in terms of PART A the legislation, rules and
policies herein to be inconsistent with the Constitution, find that the 1st Respondent’s notice
[4]
of motion in the Court below be dismissed with cost, or such appropriate order the
Honourable Court finds just and equitable under the circumstances.
(j) That failing the aforementioned prayers, the Applicant be allowed to petition the Supreme
Court of Appeal with the leave of the Honourable Court, cost being reserved unto the
finding of the Court aforesaid.
(k) Further, that the 1st Respondent pay the cost of these proceeding’s; in the alternative,
(l) The 1st Respondent together with the 2nd Respondent and 3rd Respondent pay the cost of
these proceedings should the 2nd Respondent or 3rd Respondent oppose these proceedings;
(m) An order the Honourable Court finds just and equitable;
(n) Further and/ or alternative relieve.
and that the accompanying affidavit of MICHAL JULIUS TELLINGER will be used in support
thereof.
Take notice further that the applicant has appointed BLAKES ATTORNEYS, 2ND OFFICE, 74
OXFORD ROAD, CORNER 8TH SAXONWOLD, JOHANNESBURG as the address at
which he will accept notice and service of all process in these proceedings.
Take notice further that if you intend opposing this application you are required;-
(a) to notify applicant's attorney in writing on or before 27 MAY 2010; and
(b) within 15 DAYS after you have so given notice of your intention to oppose the application
to file your answering affidavit, if any; and further that you are required to appoint in such
[5]
notification an address at which you will accept notice and service of all documents in
these proceedings.
If no such notice of intention to oppose is given, the applicant will request the Registrar to place
the matter before the Chief Justice to be dealt with in terms of Rule 11(4).
DATE AT MIDRAND, THIS 19th DAY OF APRIL 2012
MICHAL JULIUS TELLINGER Applicant
C/o BLAKES ATTORNEYS 2nd Office
74 Oxford Road, Corner 8th Avenue Saxonwold
JOHANNESBURG Telephone: (011) 468 3225
Fax: (011) 486 3602 Email: [email protected]
Reference: MJT/2012/787
SERVICE PER SHERIFF
TO: (1) THE STANDARD BANK OF SOUTH AFRICA LIMITED 1st Respondent 9th Floor Standard Bank Centre 5 Simmonds Street JOHANNESBURG Telephone: (011) 636 9111 Fax: (011) 636 4207
[6]
TO: (2) THE SOUTH AFRICAN RESERVE BANK 2nd Respondent 370 Church Street PRETORIA 0001 Telephone: (011) 240 0700 Fax: (011) 240 0735
TO: (3) THE MINISTER OF FINANCE
3rd Respondent C/o THE STATE ATTORNEY, JOHANNESBURG 10th Floor North State Building 95 Market Street JOHANNESBURG Telephone: (011) 330 7600 Fax: (011) 337 7180
AND TO:
THE REGISTRAR Constitutional Court: Constitution Hill Braamfontein JOHANNESBURG
[1]
NOTICE OF MOTION
(to Registrar and Respondent’s)
IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
Case No. …………………
In the matter between:
MICHAL JULIUS TELLINGER Applicant
~and~
THE STANDARD BANK OF SOUTH AFRICA LIMITED 1st Respondent THE SOUTH AFRICAN RESERVE BANK 2nd Respondent THE MINISTER OF FINANCE 3rd Respondent
TABLE OF CONTENTS
No. Subject Page Par
1 Notice of Motion … 1 – 6 -
2 Table of Contents (this document) … 7 – 5 -
3 Table of Statutes … 1 – 8 -
4 Founding Affidavit of Michal Julius Tellinger 1 – 100 -
4.1 The Parties 1 – 3 2 – 5
[2]
4.2 Nature of Application … 5 - -- 4 - --
4.3 Contention for Direct Access … 5 – 14 5 - 11
4.4 Overview of Proceedings (The Court a Que) … 14 – 16 12 - --
4.5 Chronology of Relevant Events … 16 – 34 13 - --
4.6 Overview of Dispute … 34 – 56 14 - 36
4.7 Points Raised in the Court A Quo … 57 - -- 37 - --
4.8 Introduction to Business of the Bank … 57 – 66 38 - 45
4.9 Bank Credit … 66 – 67 46 - --
4.10 Securitisation … 68 – 74 47 - 64
4.11 Seignorage … 75 – 79 65 - 69
4.12 Fractional Reserve System … 79 – 82 70 - 71
4.13 Prejudice caused to me … 82 – 84 72 - 73
4.14 Artificial Money Creation … 84 – 89 74 - 87
4.15 Inference of Fiduciary … 89 – 82 88 - 94
4.16 Conclusion … 92 – 94 95 – 102
4.17 Prejudice … 94 – 94 103-108
4.18 Legislative Bill Introduced … 95 – 95 109 - --
4.19 Errors in Legal Reasoning … 95 – 96 110-111
4.20 Conclusion and Remedies … 96 – 96 112-115
4.21 Leave to Appeal … 96 – 97 116 - --
4.22 Declaration of Unconstitutionality … 97 – 98 117-121
4.23 Review of the 1st Respondent's Decision … 98 – 98 122-123
4.24 Cost … 98 – 99 124-126
4.25 Conclusion … 99 – 100 127-128
4.26 Signature … 100 -
[3]
5 Annexure to the Founding Affidavit:
5.1 Written Reasons Rule 49(1)(C) “MT A1” 1 – 3 -
5.2 Application for Certified Copies of Court File “MT A1” 3 – 4 -
6. Main Annexures to the Founding Affidavit:
6.1 Court File (Copy) "MT 1” 1 – 384 -
6.2 Application for Leave to Appeal "MT 2” 385 – 392 -
6.3 Notes of Leave to Appeal "MT 3” 393 – 460 -
6.4 1st Respondent Advertisement (Photo) "MT 4” 461 - -- -
6.5 Securitisation EG Van Den Berg "MT 5” 462 – 471 -
6.6 Securitisation Rick Watson "MT 6” 472 – 486 -
6.7 Basel II - Deloitte "MT 7” 487 – 506 -
6.7 Bayport Pricing Supplement "MT 8” 507 – 513 -
6.8 Bayport Asset Backed Note Program "MT 9” 514 – 676 -
6.9 Bayport Annual Financials 2010 "MT 10” 677 – 714 -
6.10 SA Home Loans Advertisement "MT 11” 715 – 717 -
6.11 Seignorage and Monetary Policy "MT 12” 718 – 725 -
6.12 Fractional Reserve Banking "MT 13” 726 – 739 -
6.13 When Central Banks Fail "MT 14” 740 – 742 -
6.14 The Weimar Hyperinflation "MT 15” 743 – 751 -
6.15 Currency Substitution UoP "MT 16” 752 – 772 -
6.16 Gear Policy – SA Government "MT 17” 773 – 838 -
6.17 Statistical release "MT 18” 839 – 847 -
6.18 In Re Ferrel L Agard "MT 19” 848 – 884 -
6.19 The Case of Icelandic "MT 20” 885 – 886 -
6.20 The Case of Wells Fargo Bank "MT 21” 887 – 895 -
[4]
6.21 Financial Markets Bill "MT 22” 896 - 975 -
DATE AT MIDRAND, THIS 19th DAY OF APRIL 2012
MICHAL JULIUS TELLINGER Applicant
C/o BLAKES ATTORNEYS 2nd Office
74 Oxford Road, Corner 8th Avenue Saxonwold
JOHANNESBURG Telephone: (011) 468 3225
Fax: (011) 486 3602 Email: [email protected]
Reference: MJT/2012/787
SERVICE PER SHERIFF
TO: (1) THE STANDARD BANK OF SOUTH AFRICA LIMITED 1st Respondent 9th Floor Standard Bank Centre 5 Simmonds Street JOHANNESBURG Telephone: (011) 636 9111 Fax: (011) 636 4207
TO: (2) THE SOUTH AFRICAN RESERVE BANK
2nd Respondent 370 Church Street PRETORIA 0001 Telephone: (011) 240 0700 Fax: (011) 240 0735
[5]
TO: (3) THE MINISTER OF FINANCE
3rd Respondent C/o THE STATE ATTORNEY, JOHANNESBURG 10th Floor North State Building 95 Market Street JOHANNESBURG Telephone: (011) 330 7600 Fax: (011) 337 7180
AND TO:
THE REGISTRAR Constitutional Court: Constitution Hill Braamfontein JOHANNESBURG
[1]
NOTICE OF MOTION
(to Registrar and Respondent’s)
IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
Case No. …………………
In the matter between:
MICHAL JULIUS TELLINGER Applicant
~and~
THE STANDARD BANK OF SOUTH AFRICA LIMITED 1st Respondent THE SOUTH AFRICAN RESERVE BANK 2nd Respondent THE MINISTER OF FINANCE 3rd Respondent
TABLE OF STATUES/ AUTHORITIES
No. Subject Page Par
Statues’
1. Banking Institutions Act 25 of 1946;
2. Banking Institutions, Mutual Building Societies And Building Societies Amendment Act 13
of 1989;
3. Banks Act 94 of 1990;
4. Bill of Exchange Act 34 of 1964;
[2]
5. Collective Investment Schemes Control Act 45 of 2002;
6. Companies Act 61 of 1973;
7. Competition Act 89 of 1998;
8. Constitution of: The Republic of South Africa, 108 of 1996;
9. Consumer Protection Act 68 of 2008;
10. Co-operative Banks Act 40 of 2007;
11. Currency and Banking Act, 1920 (act No. 31 of 1920);
12. Currency and Exchanges Act 9 of 1933;
13. Financial Advisory and Intermediary Services Act 37 of 2002;
14. Financial Institutions (protection Of Funds) Act 28 of 2001;
15. Financial Institutions Amendment Act 99 of 1967;
16. Financial Intelligence Centre Act 38 of 2001;
17. Financial Services Board Act 97 of 1990;
18. Financial Services Laws General Amendment Act 22 of 2008;
19. Financial Services Ombud Schemes Act 37 of 2004;
20. Inspection of Financial Institutions Act 80 of 1998;
21. Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002;
22. Mutual Banks Act 124 of 1993;
23. National Credit Act 34 of 2005;
24. Notarial Bonds (natal) Act, 1932, Amendment Act 57 of 1937;
25. Prescribed Rate of Interest Act 55 of 1975;
26. President's Minute No. 329 and Proclamation;
27. Prevention of Counterfeiting Of Currency Act 16 of 1965;
28. Proclamation - South African Reserve Bank Amendment Act, 2010 (Act No. 4 of 2010) –
Government Gazette No. 33551
29. Savings Bank Societies Borrowing Powers Act 6 of 1932
[3]
30. Securities Services Act 36 of 2004
31. South African Reserve Bank Act 90 of 1989
32. South African Reserve Bank Act, 1989 (Act No. 90 of 1989)
33. South African Reserve Bank Amendment Act, 2010 (Act No. 4 of 2010)
34. South African Reserve Bank Regulations 2010
35. South African Reserve Bank, Banking Institutions, Mutual Building Societies and Building
Societies Amendment Act 96 of 1988
36. Suretyship Amendment Act 57 of 1971
37. Terms of reference of the panel as established in terms of Section 4 of the South African
Reserve Bank Act, 1989
38. Trade Metrology Act 77 Of 1973
Authorities: South African
Swanepoel v Nameng (43/2009) [2009] ZASCA 101; 2010 (3) SA 124 (SCA) ; [2010] 1 All SA
345 (SCA) (18 September 2009)
Graham NO and others v Trackstar Trading 363 (Pty) Ltd (1361/02) [2002] ZAECHC 20; [2003]
1 All SA 181 (SE) (8 August 2002)
Shoprite Checkers Ltd t/a Megasave v Khan and another (ECJ 2004/007) [2004] ZAECHC 19 (8
July 2004)
Geue and Another v Van Der Lith and Another (625/02) [2003] ZASCA 118; [2003] 4 All SA 553
(SCA) (20 November 2003)
Command Protection Services Gauteng (Pty) Ltd t/a Maxi Security v South African Post Office
Limited (16945/2004) [2009] ZAGPPHC 134 (30 October 2009)
De Villiers NO and Another v BOE Bank Limited (477/2002) [2003] ZASCA 101; [2004] 2 All
SA 457 (SCA) (26 September 2003)
[4]
McPherson v Khanyise Capital (Pty) Ltd and Others (24309/08 ) [2009] ZAGPHC 57 (27
February 2009)
Mussolo (Pty) Ltd v Luterek and Another (460/05) [2006] ZAWCHC 48 (27 October 2006)
Bonpure (Pty) Limited and Another v Parry and Others (10978/05) [2006] ZAWCHC 19 (17 May
2006)
Diggers Development (Pty) Ltd v City of Matlosana and Another (47201/09) [2010] ZAGPPHC
15 (9 March 2010)
Molyneux v Wicks and Others (496/2007) [2007] ZAECHC 66 (31 August 2007)
ZALC - Project 47: Unreasonable Stipulations in Contracts and the Rectification of Contracts -
CHAPTER 2: Evaluation
ZALC - Project 47: Unreasonable Stipulations in Contracts and the Rectification of Contracts -
CHAPTER 2: Evaluation
G Liviero & Son Buiilding (Pty) Ltd v Ifa Fair-Zim Motel & Resort (Pty) Ltd, Ifa Fair-Zim Motel
& Resort (Pty) Ltd v G Liviero & Son Buiilding (Pty) Ltd and Another (7802/09, 7803/09,
7434/09) [2010] ZAKZPHC 44 (27 August 2010)
Public Procurement and Asset Disposal Board and Another v Researched Solutions Integrated
(Pty) Limited and Others (Civil Appeal No. CACLB 56 of 205) [2006] BWCA 2 (27 January
2006)
Director of Public Prosecutions v Daisy Loo (Pty) Ltd and Others (CLCLB-067-08) [2009]
BWCA 21 (28 January 2009)
Securefin Limited and Another v KPMG Chartered Accountants SA (29314/2002) [2007]
ZAGPHC 130 (19 July 2007)
Standard Bank of South Africa Limited v University of the North and Others (23391/2003) [2005]
ZAGPHC 351 (30 November 2005)
Sealed Africa (Pty) Ltd v Kelly and Another (3957/04) [2005] ZAGPHC 69 (6 July 2005)
[5]
Nedbank Limited v Gani, Nedbank Limited v Gani (28028/2005, 28601/2005) [2006] ZAGPHC
151 (31 January 2006)
Bethlehem Technologies London Limited v Deysel (33815/05) [2006] ZAGPHC 127 (2 October
2006)
Nedbank Limited v Geldenhuys and Another (13509/2005) [2005] ZAGPHC 286 (27 July 2005)
Allison v Absa Bank Limited (22361/03) [2007] ZAGPHC 133 (26 July 2007)
Mpofu v South African Broadcasting Corp Limited (SABC) and Others (2008/18386) [2008]
ZAGPHC 413 (16 September 2008)
Tafira and Others v Ngozwane and Others (12960/06) [2006] ZAGPHC 136 (12 December 2006)
Concor Holdings (Pty) Ltd v Minister of Water Affairs and Forestry and Another (Judgment on
Exception) (16947/2001) [2006] ZAGPHC 138 (6 January 2006)
Van Zyl and Others v Government of the Republic of South Africa and Others (20320/02) [2005]
ZAGPHC 70 (20 July 2005)
Trustees of the time being of the Biowatch Trust v Registrar Genetic Resources and Others (Open
Democracy Advice Centre as Amicus Curiae) (A831/2005) [2008] ZAGPHC 135 (13 May 2008)
Al-Kharafi & Sons and Another v Pema and Others NNO (2008/12359) [2008] ZAGPHC 273 (27
August 2008)
Commissioner for the South African Revenue Service v King and Others (10240/2003) [2005]
ZAGPHC 229 (29 April 2005)
Nedbank Ltd v Master of the High Court (Witwatersrand Local Division) and Others (5619/08)
[2008] ZAGPHC 216 (18 July 2008)
Equity Aviation Services (Pty) Limited v South African Post Office Limited (17239A/2007)
[2008] ZAGPHC 4 (8 January 2008)
Dispersion Technology (SA) (Pty) Ltd t/a Pelo Healthcare v State Tender Board and Another
(15182/2004 ) [2007] ZAGPHC 175 (4 September 2007)
[6]
MMA Security Services CC t/a Broubart Security and Another v Private Security Industry
Regulatory Authority and Others (35393/2003) [2009] ZAGPHC 9 (27 January 2009)
Muckleneuk/Lukasrand Property Owners and Residents Association v MEC Department of
Agriculture Conservation and Environment Gauteng Provincial Government and Others (Review
Application 28192/04), Muckleneuk/Lukasrand Property Owners and Residents Association v
HOD Department of Agriculture Conservation and Environment Gauteng Provincial Government
and Others (Urgent Application 12137/06) (28192/04 , 12137/06) [2006] ZAGPHC 86 (30 August
2006)
Hlophe v Constitutional Court of South Africa and Others (08/22932) [2008] ZAGPHC 289 (25
September 2008)
Lurco Trading 189 (Pty) Ltd v Local Municipalitiy of Madibeng (55329/2007) [2008] ZAGPHC
211 (4 July 2008)
Concor Holdings (Pty) Ltd v Minister of Water Affairs and Forestry and Another (Judgment on
Exception) (16947/2001) [2006] ZAGPHC 138 (6 January 2006)
Van Zyl and Others v Government of the Republic of South Africa and Others (20320/02) [2005]
ZAGPHC 70 (20 July 2005)
Securefin Limited and Another v KPMG Chartered Accountants SA (29314/2002) [2007]
ZAGPHC 130 (19 July 2007)
Anvil Financial Services (Pty) Ltd and Another v Netstar (Pty) Ltd (2006/8054) [2006] ZAGPHC
121 (31 October 2006)
Statusfin Financial Services (Pty) Limited v Vos and Others (21404/05 ) [2007] ZAGPHC 195 (11
September 2007)
Bastian Financial Services (Pty) Ltd v General Hendrik Schoeman Primary School (A1170/05)
[2006] ZAGPHC 124 (11 September 2006)
[7]
Platinum Asset Management (Pty) Ltd v Financial Services Board and Others , Anglo Rand
Capital House (Pty) Ltd and Others v Financial Services Board and Others (2004/3081 ,
2004/6260) [2005] ZAGPHC 126 (5 December 2005)
Glenrand Mib Financial Services (Pty) Ltd and Others v Van Den Heever NO and Others
(4445/07) [2007] ZAGPHC 392 (23 November 2007)
Director of Public Prosecutions v King (CC257/2005) [2008] ZAGPHC 118 (24 April 2008)
S v Mgabhi (161/07) [2008] ZAGPHC 470 (1 December 2008)
Authorities: United States of America
Wells Fargo Bank, N.A. v Farmer 2008 NY Slip Op 51133(u) [19 Misc 3d 114(a)] – Annexure
“MT 21”, pg. 887
The case of Icelandic (Unreported) – Annexure “MT 20”, pg. 885
Ferrel L. Agard – Case No. 810-77338-reg – Annexure “MT 19”, pg. 848
DATE AT JOHANNESBURG, THIS 19th DAY OF APRIL 2012
MICHAL JULIUS TELLINGER Applicant
C/o BLAKES ATTORNEYS 2nd Office
74 Oxford Road, Corner 8th Avenue Saxonwold
JOHANNESBURG Telephone: (011) 468 3225
Fax: (011) 486 3602 Email: [email protected]
Reference: MJT/2012/787
[8]
SERVICE PER SHERIFF
TO: (1) THE STANDARD BANK OF SOUTH AFRICA LIMITED 1st Respondent 9th Floor Standard Bank Centre 5 Simmonds Street JOHANNESBURG Telephone: (011) 636 9111 Fax: (011) 636 4207
TO: (2) THE SOUTH AFRICAN RESERVE BANK
2nd Respondent 370 Church Street PRETORIA 0001 Telephone: (011) 240 0700 Fax: (011) 240 0735
TO: (3) THE MINISTER OF FINANCE
3rd Respondent C/o THE STATE ATTORNEY, JOHANNESBURG 10th Floor North State Building 95 Market Street JOHANNESBURG Telephone: (011) 330 7600 Fax: (011) 337 7180
AND TO:
THE REGISTRAR Constitutional Court: Constitution Hill Braamfontein JOHANNESBURG
[1]
NOTICE OF MOTION (to Registrar and Respondent’s)
IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA
Case No:.…………………
In the matter between:
MICHAL JULIUS TELLINGER
Applicant
~and~
THE STANDARD BANK OF SOUTH AFRICALIMITED 1st Respondent THE SOUTH AFRICAN RESERVE BANK 2nd Respondent THE MINISTER OF FINANCE 3rd Respondent
FOUNDING AFFIDAVIT
I, the undersigned
MICHAL JULIUS TELLINGER
do hereby make oath and say that:
[2]
THE PARTIES:
1. I am an adult male with South African Identification number 600513 5020 08 2, residing
at, 17 Crescent Ave, Waterval Boven, Mpumalanga, South Africa.
1.1 I am the Applicant in this application for leave to appeal directly to this Court in
terms of Rule 18 of this Court’s Rules, read with Section 167(6)(b)an (7) of the
Constitution.
1.2 I bring this application in my individual and personal capacity for the reasons so
set-out hereinafter.
1.3 The facts herein contained are, save where the contrary appears from the context,
within my personal knowledge, to the best of my belief both true and correct, and I
can and do swear positively thereto.
1.4 Where I make legal submissions, I do so, on the basis of research, my profession
and experience and knowledge, as well as on the basis of legal advice I have
received which I verily believe to be correct.
1.5 In substance the same I have averred in the Court below.
1.6 I have acted in my personal capacity throughout Courts below and intenddoing so
with the leave of the Honourable Court.
[3]
1.7 I will also be assisted by Mr Raymondt Dicks, a legal advisor, whom has assist me
in drafting this application and whom has co-researched the content under which
relief is sought.
2. The 1st Respondent is THE STANDARD BANK OF SOUTH AFRICA LIMITED, with
registration number 1962/000738/06, a limited liability company duly registered and
incorporated in accordance with the company laws (Companies Act No.61 of 1973) of the
Republic of South Africa and an authorised financial service provider and registered credit
provider in terms of the National Credit Act' 34 of 2005 with registration number
NCRCP15 and a banking company, a bank as defined in section 1 of the Bank Act, 1990
(Act 94 of 1990) with principal place of business situated at 9th Floor, 5 SIMMONDS
STREET, MARSHALLTOWN, JOHANNESBURG 2000.
2.1 The 1st Respondent is sited herein as relief is sought against it for the reasons so set-
out hereinafter.
2.2 The 2nd Respondent is the SOUTH AFRICAN RESERVE BANK, established by
Section 9 of the Currency and Banking Act, 1920 (Act No 31 of 1920) and is
governed by the South African Reserve Bank Act, 1989 (Act No 90 of 1989), as
amended and Section 223 to 225 of the Constitution of the Republic of South
Africa, 1996; the South African Reserve Bank Act, 1991, and the regulations
[4]
framed in terms of this Act, provide the enabling framework for the Reserve Bank's
operations and acts as the ‘Central Bank’ of the Republic of South Africa, with
principal place of business situated at 370 Church Street, PRETORIA 0001.
2.3 The 2nd Respondent is sited herein as it, inter alia, is a body whom is concerned
with the formulation, implementation of monetary policy, whom is entrusted with
ensuring that the banking and financial system as a whole is sound and whom
assists the South African Government, inclusive of other members of the economic
community, in the formulation and implementation of macro-economic policy; and
2.4 Further the 2nd Respondent advises and oversees monetary policy, in specific, but
not restricted therein, the Basel I, II and III reports; and
2.5 Further the 2ndRespondent conducts sub-functions of authority over the 1st
Respondent, in this regard, the Registrar of Banks, as contemplated in section 4 of
the Bank Act, 94 of 1990.
3. The 3rd Respondent is the Republic of South Africa, herein represented by the MINISTER
OF FINANCE, acting in his official capacity, with principal place of business situated at
40 Church Square, Old Reserve Bank Building, 2nd Floor, PRETORIA, Care of The State
Attorney, Johannesburg 10th Floor North State Building 95 Market Street Johannesburg.
[5]
3.1 The 3rd Respondent is sited herein as it functions as an Organ of State, with the
power and responsibility which, inter alia, include state entities that aim to advance
economic growth and development, and to strengthen South Africa’s democracy;
and
3.2 Further, the 3rd Respondent has oversight authority, as far as these proceedings are
concerned, over the South African Revenue Service and the Financial Services
Board; and
3.3 Furthermore the 3rd Respondent has authority over the 2nd and 1st Respondent
respectively with regard to the implementation of rules, regulations, public policy,
policy and governance.
NATURE OF APPLICATION:
4. This is an application for direct access to the Honourable Constitutional Court in terms of
Rule 11(1)(a) read together with Section 167(4)(a) of the Constitution of South Africa.
CONTENTION FOR DIRECT ACCESS:
5. The Honourable Judge M. M. Mabesele, sitting as a court of appeal in the South Gauteng
High Court, Johannesburg under case number 13340/2011[the Court below] that was heard
[6]
and dismissed by the aforesaid Honourable Judge without reasons. Despite request during
the proceedings and by written request, the said Honourable Judge remains imperceptible.
The Court file to these proceeding has been annex hereto as “MT 1”.
5.1 The aforesaid appeal is in substance the same as I presented to the Court below.
Annex “MT 2”, pages 385 to 392 read together with annex “MT 3” pages 393 to
460 hereto.
5.2 I therefore bring this application without the approval or support of the Court
below.
5.3 This application is founded on the infringement of a right which section 38(a) of the
Constitution vests in a person acting in their own interest.
6. I bring this application on account of;
6.1 Having leave to appeal being denied in the Court below, I am left with no other
avenue in which, by right, I can see the review of the Judgment;
6.2 The matter is a;
[7]
6.2.1 Constitutional dispute between Organs of State established by the
Constitution, performing functions under section 70(1)(b) and section
44(1)(ii) of the Constitution respectively,
6.2.1.1 of paramount public interest; and
6.2.1.2 pivotal in defining one of the most important features of our
social-economical democracy; and
6.2.1.3 intrinsically and probably exclusively of a constitutional nature;
and
6.2.1.4 precedent-setting for a large number of related financial
operations/transactions and disclosure procedures, not-
withstanding collection procedures by the South African
Revenue Service; and
6.2.1.5 precedent-setting for a large number of related matters; and
6.2.1.6 the outcome of this case will define what could be the most
salient feature of our parliamentary legislative, monetary and
financial democracy; and
[8]
6.2.1.7 there are issues or disputes of material facts as indicated in the
Court below; and
6.2.1.8 the prospect of the Supreme Court of Appeals granting leave to
appeal is uncertain; and
6.2.1.9 it would not appear that deliberations in this Honourable Court
necessitate or could benefit from the Supreme Court of Appeals
hearing it first; and
6.2.1.10 the Judgment of the Court below rendered by Judge M. M.
Mabesele, in Case No. 13340/2011[the “Judgment”] being
erroneous, without proper consideration, consultation and
without reasons for finding.
7. I intend petitioning the Supreme Court of Appeals for leave to appeal so as to preserve my
only other available avenue for redress, should this Honourable Court not accept my
petition.
8. This matter concerns;
8.1 The constitutionality of certain rules of the National Policy and National
Legislation, inter alia, The Bank Act (94 of 1990), The South African Reserve
[9]
Bank Act (90 of 1989), Deposit-taking Institutions Amendment Act (81 of 1991),
Bills of Exchange Act (34 of 1964), Consumer Protection Act (68 of 2008), Co-
operative Banks Act (40 of 2007), Currency and Exchanges Act (9 of 1933),
Financial Advisory and Intermediary Services Act (37 of 2002), Financial Services
Board Act (97 of 1990), Financial Services Laws General Amendment Act (22 of
2008), Financial Services Ombud Schemes Act (37 of 2004), Inspection Of
Financial Institutions Act (80 of 1998), National Credit Act (34 of 2005), Notarial
Bonds (Natal) Act, 1932, Amendment Act (57 of 1937), Prescribed Rate of Interest
Act (55 of 1975), Securities Services Act (36 of 2004) the aforementioned act’s
regulations and other related legislation which are excluded herein.
8.2 How long must an affected party endure the adverse application of an
unconstitutional law or the threat thereof, before that party may challenge the
constitutionality of that law, and
8.3 Cost orders in respect of good faith defence litigation in constitutional matters; and
8.4 Moreover, the appeal relates to the failure by the Court below to exercise its
discretion properly, in that the Court below failed to recognise;
8.4.1 a lawful defence,
[10]
8.4.2 its Constitutional impactions,
8.4.3 the implications of contra bonus mores,
8.4.4 identify the short comings of the 1st Respondent’s submissions to my
defence,
8.4.5 applying and developing the common law,
8.4.6 andthe Court below erred in other aspects which are relevant and material
to the reasoning to reach the conclusions set out in the Judgment.
8.5 The Judgment of Acting Judge Bava of the Court below is annex herein as “MT 1”
pages 2 to 12 in the bundle.
8.6 After having heard oral argument, Judge M. M. Mabesele dismissed my application
for leave to appeal with cost. Despite request for written reasons for finding at the
end of the hearing, the learned Judge M. M. Mabesele indicated that there are
procedures to follow, thus refusing the application aforesaid.
8.6.1 Written application was brought on 14March 2012, and to date hereof no
such reasons of finding had been forthcoming. See annex “MT A1” pages 1
and 2 hereto.
[11]
9. The substantive reliefs that I seek from this Honourable Court in the application of leave to
appeal against the Judgment are the following;
9.1 A declaration that the order of the learned Judge M. M. Mabesele, dismissing my
leave to appeal in the Court below, is inconsistent with the Constitution and invalid;
and
9.1.1 Should the Honourable Courtissue such declaration, the 1st Respondent shall
be allowed to amend its pleadings and I be allowed to file a replying
affidavit so to allow the matter to proceed on trial in the Court below.
9.2 a Declaration that, in the alternative to paragraph 9.1.1 above, that where this
Honourable Court does not issue such declaration aforesaid, the matter be allowed
to proceed on trial in the Court below.
9.3 An order that the 3rd and 2nd Respondent are to;-
9.3.1 Introduce such amendments, deemed just and equitable, to the Bank Act,
(94 of 1990) and the South African Reserve Bank Act (90 of 1989)that will
prevent a bank from exploiting the economic principles of ‘seignorage’,
‘securitisation’ and the ‘fractional reserve system’, and provide such
safeguards and penalties appropriate to discourage further exploitation; and
[12]
9.3.2.1 Cause the implementation of such measures that will allow
interested parties to use and apply the PAJA to gain access to
such records held by a bank or third party whom holds
possession of such information; and
9.3.2.2 That a bank causes such amendments to their loan application
documents and procedures so to disclose any special future or
possible benefit gained to such Securitisation scheme or
alternative method of funding;
9.3.2.3 OR as the Honourable Court finds just and equitable given the
circumstance of its finding; and
9.3.2.4 In the alternative to cause the 2nd Respondent, in consultation
with the 3rd Respondent and other interested parties, to
introduce in the National Assembly such Act presented to it in
the course of these proceedings;
9.4 The actions of the 1st Respondent (banks) be declared unconstitutional, null and
void and, to introduce such procedures and safeguards that will ensure that these
practices are prevented or in the alternative controlled; and
[13]
9.5 That the 1st Respondent corrects my account to reflect the correct, ‘adjusted debt
amount’ in accordance with what this Honourable Court finds to be unjust-
enrichment; and
9.6 An order that the 1st Respondent pays the cost of this application and the cost of my
application in the Court below; and/ or
9.7 Such other or alternative remedy which the interest of justice may require or
justify.
10. As set out below, it is in the interest of justice that this Honourable Court be the Court
which hears and decides the merits of this case, once it reaches its conclusion that it was
erroneously decided by the Court below.
11. In this affidavit, I intend dealing with the following:
11.1 Overview of proceedings in the Court a quo;
11.2.1 Chronology of Relevant Events;
11.2.2 Overview of disputes;
11.2.3 Points raised in the Court a quo.
11.2 Introduction to business of the bank.
11.3 Bank Credit.
11.4 Securitisation.
11.5 Seignorage.
11.6 Fractional Reserve System.
[14]
11.7 Prejudice Caused to Me.
11.8 Artificial Money Creation.
11.9 Inference: Fiduciary
11.10 Conclusion
11.11 Prejudice
11.12 Legislative Bill introduced
11.13 Errors in legal reasoning
11.14 Conclusion and Remedies
11.15 Leave to Appeal
11.16 Declaration of Unconstitutionality
11.17 Review of the 1st Respondent's Decision
11.18 Costs.
11.19 Conclusions
OVERVIEW OF PROCEEDINGS (THE COURT A QUO):
12. I obtained a home loan agreement from the 1st Respondent on or about the 26th of February
2007 in the amount of R828015.00.
12.1 A continuing covering mortgage bond was registered over the property on or about
the 16th of November 2007.
[15]
12.2 During November 2010 to March 2011,I sought from the 1st Respondent a
settlement amount together with a certificate of balance1 and contracts relating to
the home loan agreement, the continuing covering mortgage bond, the power of
attorney assigned by me (see annex “MT 1”, page 23) to the 1st Respondent to
effect the registration of the bond and continuing covering mortgage bond, together
with affirmation or certification that the 1st Respondent is indeed the holder of the
continuing covering mortgage bond, together with such proof that it had not sold-
on its security and that the 1st Respondent had indeed used ‘money’ to effect the
loan.
12.3 Despite the demands aforesaid, the 1st Respondent failed to address/ answer any
one of the requests.
12.4 The 1st Respondent instituted motion proceedings against me in the South Gauteng
High Court, Johannesburg under case number 13340/2011seeking an order in the
following terms (Annexure “MT 1” pages 39 to 111 thereof);-
12.4.1 Payment of the sum of R980 111.30;
1When the possessor of goods or services writes out a certificate of credit stating someone has credit for a certain amount of his goods or services, it means that that someone has a claim for that amount of those goods or services; that is, those goods or services will be given to the bearer of that certificate in the manner stated on that document. The certificate of credit is the physical evidence to prove that the possessor of the goods or services owes (is in debt to) the bearer for a certain amount of goods and/or services.
[16]
12.4.2 Interest on the above amount at the legal rate of 15.5% per annum a
tempore morae, alternatively interest at the rate of 9% per annum from 2
February 2011 to date of payment
12.5 Cost of suit on an attorney and own client scale;
12.6 Declaring that the property as 926 Somerset Extension 18, Midrand, approximately
450 square metres in extent, be (declared) executable.
12.7 I entered a defence to these proceedings, which was subsequently outright
dismissed by the Honourable Justices of the court, including an application for
appeal.
12.8 The defence entered by me now forms part of these proceedings and are pivotal to
these proceedings.
CHRONOLOGY OF RELEVANT EVENTS
13. In early 2007, I wanted to buy a certain property in Midrand. I signed the offer to purchase
with the estate agent as is the norm, and waited for feedback from Standard Bank the 1st
Respondent herein, who was the appointed bank by the particular agent. Soon after I was
granted, what is commonly referred to as a “Home Loan” by banks. Since this was an “off-
plan” property that was being built, it took several more months, until the end of 2007, for
I was presented with the obligatory mortgage bond to sign.
[17]
13.1 I started to pay the home loan, which gradually increased to its full amount, until I
finally took transfer of the property and rented it out. That was not what I had
originally intended to do however. Intended selling the property for a small profit
but the delivery took much longer than originally promised, by which time the
property market had crashed and I could not even get close to the original price for
it.
13.2 I continued to pay the home loan, until around October 2010, at which point I
believed that I would be coming into some money that would allow me to settle the
full bond. In light of this, in November 2010, I requested certain documents from
the bank, like an official statement; and a settlement amount or Certificate of
Balance (Page 85 to 110 of annexure “MT 1”). The communication contained in
the annexures of the 1st Respondent notice of motion is incomplete as it does not
contain communications I had sent to the bank prior to these proceedings.
13.3 The aforementioned was not presented by the 1st Respondent until legal
proceedings commenced. Instead, after several email requests and two notarised
affidavits were served on the bank requesting the documents and clarification of
their actions, I was notified in an email that the bank would not produce the
documents, but instead, that the case had been handed over to their lawyers. See
page 83 of annex “MT 1” hereto.
[18]
13.3.1 I would like to point-out that paragraph 1 of the 1st Respondent letter does
not mention the institution of legal proceedings but rather “to proceed with
judgment against you” and further “… property will be sold in execution
by the Sheriff.” I also would like to point out paragraph (i) to (v) under
“Pros” and points (i) to (v) under “Cons”.
13.3.2 It would seem the 1st Respondent was ipso facto convinced that any other
right a person might have in law was void, thus their judgment was
immanent, per say, futile to defend.
13.4 I found this highly irregular and unacceptable behaviour, since I was in
communication with the bank offering to settle the full bond, requesting the
necessary documentation to do so. I was being prevented from doing so by the
bank, who instead of simply providing the documents, chose to stop
communicating with me and sued me.
13.4.1 The action by the 1stRespondent was premature in issuing motion
procedures against me. Thus, the 1st Respondent elected to rather extend
cost and interest in these proceedings rather than answer simple questions
asked of it.
[19]
13.4.2 The proceedings premature as they were, was further ignored in the Courts
below so much so the council for the 1st Respondent alluded in its
argument in Court that I was selectively trying to waste the Court’s time
and get out of debt.
13.4.3 The premises of my writings prior to the proceedings of the 1st Respondent
were not taken into consideration or even given its value that I simply
needed answers from the 1st Respondent so to make an informed decision
to settle my bond.
13.5 It was at this stage that I also began to discover deeply troubling information
suggesting that banks create money out of “thin air”,(See annex “MT 12” page
718 to 725) with clever and deceptive bookkeeping tactics (See annex Basel II
report and comment by Deloitte at annex “MT 7”, pages 487 to 506), by simple
debit and credit entries, and enriching themselves, or profiteering, by using the
signatures of their clients on the original “promissory notes,” which are sold on the
international stock/bond markets – a process that is closely guarded by the banks,
and commonly known as securitisation.
13.6 I began to do extensive research and started to question certain aspects of the
banking industry (See annex “MT 5” and “MT 6” hereto) and how they go about
[20]
their business. At this stage I was joined in my research by at least three other
highly intelligent and capable individuals, who had similar experiences with their
bank, and were finding the same evidence, including similar response by the banks
to disclose this information.
13.7 Receiving this abrupt approach by the 1st Respondent, I became suspicious about
some basic economic principles that simply did not make any sense to my scientific
mind. The more I delved into this matter, the more sinister it seemed. Like most
trusting people, I did not really give any of this much thought. I just could not
imagine that the bank may possibly be doing something so scheming and
convoluted. I assumed that the strictest laws and codes of conduct governed the
workings of a bank that would prevent such deceptive actions and profiteering.
13.8 The simple question I posed to the 1st Respondent could not be answered by any
one of the 1st Respondent’s employees or even senior staff members. As such, my
concerns can be summarised as follows;-
13.8.1 How is it possible that banks have this seemingly bottomless pit of
money, (see annex “MT 12” and “MT 13” hereto) that they are able to
dip into at any time, to produce seemingly infinite amounts of money, to
millions of South Africans?
[21]
13.8.2 How is it possible that they could boldly advertise “75 Billion Rand in
Home Loans” See annex “MT 4” hereto; and sponsor a variety of
cultural activities and sporting events on television, costing hundreds of
millions of Rands?
13.8.3 Where does all that money come from – surely it cannot all come from
deposits of their customers? This was concerning, as the risk involved
would effectively mean that money is valued at a fraction we thought it
to be. See “MT 13”, “MT 14” and “MT 15”.
13.8.4 Considering the above, the 1st Respondent’s financials, which are readily
available from their Internet web-site, do not disclose what the 1st
Respondent purports to have loaned to the home loan industry, i.e. 75
Billion Rand.
13.9 As hard as I tried to approach this paradoxical problem from every logical
perspective, it just did not add up. After more research, and to my dismay, I found
that my original research information about the concealed activity of the bank was
mostly accurate and that it is well hidden from their good-hearted and trusting, yet
ignorant clients.
[22]
13.9.1 Given the above, I cannot recall that this information was disclosed to
mention application, or that I have signed any document relating to such
disclosure with the 1st Respondent; and
13.9.1.1 Had I done so, the 1st Respondent failed to bring such
information to my attention, including the Court below.
13.9.2 The home loan contract neither mentions the 1st Respondent’s practice of
how it goes about lending money, but rather it alludes that it, the 1st
Respondent, loaned sound, liquid money to me.
13.10 The information and research that I am referring to deals with aspects of law and
internal banking activities that are kept out of the public domain by the bank – both
consciously and maliciously (see annex “MT 17” hereto). Furthermore, the bank is
being protected by law (Bank Act and annex “MT 7” hereto), not to have to
disclose critical aspects of their internal activity, even when confronted by people
like me in a court of law. I find this so called ‘secrecy’ of the bank to be completely
unacceptable and unconstitutional in an open and free society, striving to uphold
and develop common law principles. This aspect was clearly observed in the Court
below, as the facts were foreign and unknown to the court thus, senior counsel
representing the 1st Respondent made a mockery of me in Court, so much so that it
[23]
is recorded that senior counsel referred to me as being part of a ‘cult.’ The attorneys
openly joked about it and the 1st Respondent, in their replying affidavit, referenced
my defence to be ‘nonsensical’, ‘irrelevant’, ‘unintelligible’ and ‘imaginary’.
These propositions were carried into the proceedings in the Court below and in
selective media publications.
13.11 I realised that the most disturbing part of this, is that the entire legal system
seems to be completely stacked in favour of the banks, isolated from considering
my contention and defence, despite valid references to law, case law and articles on
the subject matter. See annex “MT 19” and “MT 21” hereto.
13.12 And as the weeks went by and I tried to get simple documents and answers from the
bank, I realised that ordinary citizens seem to have no recourse against the might of
the bank, when they feel their rights have been violated. The legal costs of
confronting the banks in the current legal system are far beyond most people’s
capacity. I got the impression that the legal counsel was either already on the banks
roll or was unwilling to assist as their potential earnings from acting on behalf of
the bank could be prejudiced.
13.12.1 A primary example of this is that the home loan agreement, which was
brought up by senior counsel during the hearing, included a clause that,
[24]
unbeknown or understood by me, attempted to enforce the automatic
payment of the bank’s legal costs whether or not I won or lost the case. I
find such a clause unlawful and unfair in all its applications and see it as
malicious entrapment without disclosure by the 1st Respondent. See
annex “MT 1” letter of demand, home loan agreement and covering bond
as security.
13.13 After not having any success from two notarised affidavits that were delivered to
the bank during December 2010 and again in January 2011, where I requested
information and documents, and after receiving a summons from the bank in March
2011, I decided to represent myself and use my case as an example to expose what
many have interpreted as malicious, devious and even fraudulent activity by the
bank.
13.13.1 I have to point out here that before and after the 1st Respondent engaged
in writing to me I had corresponded with them on an on-going continued
basis, whiles this continued, the 1st Respondent elected to proceed with a
motion application against me.
13.14 To my horror I found out that the courts and the law was not exactly fair to a
layperson, dismissing factual information and other evidence because it was not
[25]
presented according to court rules, of which a layperson has very little experience,
or knowledge. To a layperson like me, it seems that the courts and judges simply
dismiss arguments because they assume that I could not possibly have a solid case,
even when I placed the evidence right in front of them.
13.15 The conclusive thought in these premises was simply that I had gained some
benefit(a house) and to that effect I must pay, irrespective of what happens or had
happened behind closed doors and irrespective of what impact it has on the
‘payback’ or ‘irregular’ manner under which the lending occurred. A crisp question
in this regard would be, if the bank obtained money under activities described
below, would I still be liable to pay interest? If the answer is to the positive, then
the presumption or message to the public would be that to defraud someone is
wrong but to gain from the proceeds are justified which would equate that crime
does pay!
13.16 It became very clear to me that that the law is applied very differently to the bank
as opposed to ordinary citizens. This remains a deeply troubling aspect and the
main reason why I bring this application to the Constitutional Court.
13.17 It also became evident that the lawyers for the 1st Respondent, their advocates and
even the Judges themselves have very little knowledge of the deeply convoluted
[26]
and secret activities of the bank. Whether they are party to selective and preferential
information, or are simply uniformed by the 1st Respondent, is not known.
Furthermore, the Judges of the Court below were not prepared at any occasion to
test these arguments by allowing the matter to go to trial, so that evidence could be
presented, tested and an informed decision made.
13.18 The Court below had failed to recognise that there exists, proportionally so, a
defence that raises a new (modern) approach, consistent with developing the
common law, English law of Contract and conflicting legislation. In this regard I
refer the Honourable Court to annexures “MT 8”, “MT 9”, “MT 10” and “MT 11”.
13.19 In my last two hearings, the learned Judge simply accepted the 1st Respondent’s
argument as gospel truth, irrespective of the many contradictions and breaches of
acts which I highlighted. It was as if the 1st Respondent was always true and
correct. What I said, however, must be some fabrication by an ignorant layperson
with some kind of an agenda against the bank. See page 169 of “MT 1” in contrast
the 1st Respondent’s arguments in the Court below and the Judgment of Acting
Judge Bava.
13.20 I state that there was no intention now, or before, to run-away from an obligation to
pay for something gained – this was and is not the issue at hand. The matter of fact
[27]
is that payment of compound interest on something that effectively never existed in
a tangible monetary format from the inception of the home loan agreement, does
not justify the extortionate interest charged and demands to be paid in liquid
money. I refer the Honourable Courts attention to paragraph 13.4.1 above.
13.20.1 I direct the Honourable Court’s attention to annexure “MT 1” page 16,
paragraph 5 under the heading “lack of defence”. The 1stRespondent’s
contention remains that I have paid, then deny the loan agreement. This
is not my contention or defence per-say. In this regard I refer the
Honourable Court to the subheading “errors in legal reasoning”
hereunder.
13.21 I state for the record that I entered these proceedings voluntarily, not because I was
unable to pay the monthly bond instalments, or because I was trying to wangle my
way out of a debt, nor because I am crazy – but because I believe in integrity and
honesty and because I believe that an injustice needs exposure and correction.
13.22 After studying the Bills of Exchange, and realising the word “money” is just a word
used by a bank in the public sector, but does not actually form part of the bank’s
real business, I went to great deal of trouble to obtain two copies of an official
statement from the bank in the Sandton Branch, signed and endorsed by the
[28]
assistant bank manager. Since this document falls under the definition of section 2
of the Bills of Exchange Act, I used my right to apply the aforesaid action
demonstrate to the 1st Respondent what I had implied that the 1st Respondent is
dealing in, i.e. negotiable instruments. The Mortgage Bond Agreement clearly
stipulates that the 1st Respondent accepts payments in the form of Bills of Exchange
and Promissory Notes. In this regard annexure “MT 5”, “MT 6” and the ‘Bayport’
annexure “MT 8” to “MT 10” are relevant.
13.23 On the 10th of February 2011, I meticulously followed the stipulations of section
19 and 25 of the Bills of Exchange Act, endorsed it with my signature by
acceptance for value and submitted it to the bank as payment in full and final
settlement. Such a transaction is described by the Act, as “irrevocable and complete
upon delivery.” [See Malan on Bill of Exchange, Cheques and Promissory Notes:
Fourth Edition, 2002 pages 250 at paragraph 158 Presentation for acceptance.]
13.24 The reason why I underwent the aforementioned process was to illustrate the
following:
13.24.1 If there exists no empowering act to prescribe or regulate the issue of
bills and notes, as will be shown herein, the nothing prohibits me to
follow suite and do as the 1st Respondent does on a daily basis, that is
[29]
generate ‘money’ from ‘thin air’ and claiming liquidity in return thereof.
The position is between the Bank Act, the South African Reserve Bank
Act and Policies governing these principals.
13.24.2 Further, if the 1st Respondent rejects the bill of exchange, the counter
would be obvious; the 1stRespondent’snegotiable instruments would also
be of no value. In this regard the Honourable Court’s attention is drawn
to the principles of securitisation, seignorage, fractional reserve system
and the artificial money creation.
13.26 In the opposite, the argument will be, when dealing in bills of exchange, the 1st
Respondent is conducting its business on the premises of having liquidity one to
one or equal to the value of the bill. As will be shown herein, the 1st Respondent’s
assets or liquidity, as per its financials, do not add up as it simply enters debit and
credits to establish/create ‘money’.
13.27 My aforementioned illustrations were bluntly ignored, erroneously displaced or
alternatively made out to be irrelevant; reasoning being that what the 1st
Respondent does with my security, or whatever it does to borrow money, is of no
concern to me. Therefore, they argue that I had no business in the Court below.
[30]
13.28 I see this as a blatant violation of my rights by the Court, that seems to dispense the
law selectively and partially in favour of the 1st Respondent.
13.30 The proceedings before the Court below were presented with ample documents,
writings and explanations. Particular reference in this regard is made to my
application for leave to appeal. During these proceedings I presented the Court with
a 58 page presentation, consisting of meticulous arguments, reference to law and
case law. Despite this, the Court below took no less than one minute to make its
Judgment. The Court below, after being presented with such representation, never
asked a single question whatsoever. Senior Counsel for the 1st Respondent took no
more than twenty minutes to counter my arguments, of which ten minutes was
spent by said Counsel elaborating on the “nonsensical” contention of my
presentation, but yet confirming that the 1st Respondent does process ‘credit’ and
‘debit’ entries to generate money out of thin air. The substance of the counter
argument was clear and simple: “so what, it’s none of the Applicant’s business
what the bank does behind the scenes.”
13.31 I urged the Court that I did not want anything extraordinary, but simply wished the
Court to recognise the severe complexity of the matter. This was not a simple case
that could be concluded in a motion court and I asked to be granted my
constitutional right to a fair trial. I repeated several times that only in a trial we
[31]
could call upon expert witnesses to be cross-examined, and to verify allegations
that the bank has acted in bad faith, with malicious intent, and that their contracts
are cunningly structured to entrap unwitting customers. Using these negotiable
instruments, which are disguised as mere “agreements”, the banks profiteer from
their customers while, in fact, they have no locus standi; and they are in breach of a
long list laws, Acts, policies and codes of conduct.
13.32 The relevant points posed by me, which were ignored by the Court below, are as
follows:
13.32.1 The 1stRespondent’s employee, Mr Joop Dekker whom disposed of i) a
founding affidavit and later ii) an answering affidavit on behalf of his
employer, was found to be without proper authority by the learned Judge
Bava of the Court below. Thus the 1st Respondent was ordered in a
Judgment to obtain supportive documents/ affidavit to confirm that Mr
Dekker had the appropriate authority to dispose of the said affidavits.
Thus, it was required that minutes of meetings and a certification of
appointment, signed by the Directors of the 1st Respondent, be presented
to confirm the appointment and authority of Mr Dekker. No such
documents were presented, other than an affidavit by the 1st Respondent’s
attorney stating that Mr Dekker had such authority. Unless the said
[32]
attorney is also a Director of the 1st Respondent, the affidavit cannot hold
or be construed to be authority for Mr Dekker to act on behalf of his
employer, the 1st Respondent. This point was erroneously ignored in the
Court below.
13.32.2 The bank blatantly lied in court and misrepresented the facts about a
number of points:
13.32.2.1 that I was given a ‘Certificate of Balance’ when I requested
it;
13.32.2.2 that the 1st Respondent presented at least five different
affidavits by people other than Joop Dekker. The only other
affidavit presented was a one-pager by Mr Aslam Moosajee,
attorney to the 1st Respondent;
13.32.2.3 I presented a detailed description of how securitisation
works and how the bank sells its rights and therefore loses
all rights to the property by selling the ‘note’;
13.32.2.4 the home loan contracts of the 1stRespondent do not indicate
or mention that the 1st Respondent loans to the Applicant
‘money’; e.g. “We, the Standard Bank of South Africa
[33]
Limited do hereby loan to the Applicant an amount of Rx".
The wording is a clever masquerade avoiding the use or
mention of actual “liquid money”; and instead makes
reference to, “an amount of; “the sum of”; “a credit of”; but
never actually calls it money per say.
13.32.2.5 Senior Counsel for the1st Respondent admitted in Court that
they accept payment in the form of bills of exchange and
promissory notes as stipulated in the covering bond.
13.32.2.6 The admittance of the 1st Respondent that they do not have
vaults of physical money, indicative that the 1st Respondent
had acquired what it loaned through other means, thus
giving preference to my avertments in these proceedings;
13.32.2.7 The 1st Respondent admitted that they do deal in
securitisation, supporting my avertments that it not the
business of the bank to deal in securitisation with its own
securities/ loans.
13.32.2.8 The Judge of the Court below failed to apply his mind to the
matter. More so, due to the nature and application of the
[34]
defence raised by me, despite there being reasonable
prospect that the 1st Respondent was not as forthcoming as
required in practice, avertments by the 1st Respondent
giving advance to my contention and the impairment by the
Court below to test my contention in an opposed setting, I
was severely prejudiced and damaged by the judgement.
OVERVIEW OF DISPUTES:
14. Prior, during and after the Court procedures below, I experienced a great deal of bias,
prejudice, humiliation and unease. These were not reassuring, especially considering that
matters like these attract such high cost that its almost imposable to acquire counsel and
attorneys to act on one’s behalf. This point is extended where consideration is given that
the plaintiff, in the majority of cases, had already suffered financial hardship; to have his or
her matter heard and argued adds to this financial burden. In short, I have experienced the
following;
14.1 Being ignored by the presiding Judge to such extent that the matter was almost
concluded, e.g. postponement of the matter with both trial date and costs that were
preferential to the 1st Applicant. Had I not verbally interjected, the matter would
have continued as if I was a persona non grata.
[35]
14.2 I was present in Court, while both Judge and Counsel discussed the merits and
nature of the case. I was in totality ignored, as if my presence was not welcome in
the Court.
14.3 When postponement dates were discussed, I was not given the opportunity, nor
asked if I was in agreement to such dates. It was concluded without a glance in my
direction.
14.4 The most humiliating experience of all was during the brief appearance in the
Motion Court before Judge Berochovitz. The presiding Judge mocked my clothing
by commenting that I looked like a “mechanic from Mpumalanga.” This comment
was received by the copious counsel present in court as the best joke that the day
could harvest.
14.5 My presence before the Courts below contained end-to-end obstacles of prejudice,
demeaning comment and blatant disregard of my rights to voice a defence.
14.6 I was left with an immediate impression that my defence would not receive
appropriate consideration, almost as if I was precluded from the very start of the
proceedings.
[36]
14.6.1 It became apparent, and regrettably so, that this forum was avoided by
laypersons, for the reasons aforesaid, where money prevents them from
pursuing justice; and by the intimidating nature and conduct of the Court
and its representatives.
14.6.2 Having considered my fullest right to represent myself in these
proceedings; not to cause or bring about additional financial burden upon
myself, and notwithstanding that there has been so much reluctance from
attorneys and counsel to assist me due to the nature of my defence, I was
content to enforce my rights of self-appearance, relying on the
constitutional principal of audi alteram partem.
15. Regrettably, the fanciful principals of such rights where short lived, as it would seem that
Judges were only entertaining my presence because they were duty bound. It seems to me
that the result was a pre-determined outcome. One that was clearly oblivious and
insensitive to the international and local financial crises, not questioning aspects of my
defence so to gain clarity, insight or investigate further the probability of a valid defence.
15.1 An aspect I had observed in the Court below was that much attention was given to
Counsel, especially senior counsel, as was the case in my matter. I bow to the fact
that such calibre has much knowledge of proceedings in court and the law, and to
[37]
the fact that senior counsel was chosen to represent the bank in such a simple
motion hearing. This however does not suggest that the presiding Judge should be
guided by counsel, nor take lead from counsel, where this was most certainly the
case during my hearings. It is the function of a Judge to act as umpire, to consider
all the facts so presented, and investigate or research further if there are imbalances,
more so if the subject matter is foreign, technical or a subject matter unfamiliar as
was the case here.
15.2 In the matter of Inzinger v Hofmeyr and Others2 para 4 “An exception that a
pleading is vague and embarrassing strikes at the formulation of the cause
of action and its legal validity. It is not directed at a particular paragraph
within a cause of action but at the cause of action as a whole, which must
be demonstrated to be vague and embarrassing.” Consistently, [a
vagueness amounting to embarrassment and embarrassment in turn
resulting in prejudice must be shown.]
15.2.1 The question however arises to whom the prejudice leans; thus an
evaluation is required to determine the facts. It follows that a
Constitutional right, in this regard section 25 of the Constitution,
2Inzinger v Hofmeyr and Others (7575/2010) [2010] ZAGPJHC 104 (4 November 2010) ~ The Principles Relating To Exceptions. Also see Jowell v Bramwell-Jones and others 1998 [1] SA 836 W at 905E-H ~ “I must first ask whether the exception goes to the heart of the claim and, if so, whether it is vague and embarrassing to the extent that the defendant does not know the claim he has to meet…”
[38]
finds proper foundation as per First National Bank of SA Limited
t/a Wesbank v Commissioner for the South African Revenue
Services and Another; First National Bank of SA Limited t/a
Wesbank v Minister of Finance3para 32.
15.2.2 The Court below had not given proper thought to paragraph 15.1
aforementioned. Had it done so, it would have come to the
realisation that a plea, however vague or embarrassing, waivers on
prejudice. Should the subject matter be property, the prejudice
weighs heavier where such property could be deprived.
15.2.3 Consideration therefore should have been more focused on an
enquiry to the merits of my defence as opposed to its outright
dismissal without due consideration.
15.2.3 I placed sufficient evidence before the Court below, so as to shift
the probability to that of a proper defence. Therefore, I have
dispensed properly and correctly with the required facta probanda.
3First National Bank of SA Limited t/a Wesbank v Commissioner for the South African Revenue Services and Another; First National Bank of SA Limited t/a Wesbank v Minister of Finance (CCT19/01) [2002] ZACC 5; 2002 (4) SA 768; 2002 (7) BCLR 702 (16 May 2002)
[39]
15.3 From the records of the Court below, it would become apparent that the 1st
Respondent had not properly set aside the allegations made against it. It held
that the loan agreement and continuing mortgage bond acted as a proverbial
shield against my defence.
15.3.1 The 1st Respondent had caused the registration a Covering Bond,
which included an ‘Acknowledgement of Debt’. In accordance
with the findings of Thienhaus v Metje and Ziegler Ltd4, the court
pointed out that, in practice, mortgage bonds serve three purposes,
viz, [a] to create a security interest, [b] to record the details of the
obligation secured, and to [c] create a contractual debt.
Williamson’ JA explained (at 31):~ “clearly a mortgage bond can
be utilised both as an instrument of hypothecation and as a record
of the terms and conditions of the obligation in respect of which the
hypothecation is to create a security; in addition it is a matter of
common and usual custom in the drafting of bonds to incorporate
therein an unqualified admission of liability by the mortgagor. The
reason therefore is, however, certainly not that such an
acknowledgment is required for the validity of the bond as a means
4Thienhaus v Metje and Ziegler Ltd, 1965 (3) SA 25 (A).
[40]
of creating a real right by hypothecation in favour of the creditor.
The origin and the prime purpose of the custom is the facilitation of
the obtaining of a quick and easy remedy, such as provisional
sentence, against the mortgagor in case of his default”;[isn’t this
case in favour of the banks?]
15.3.2 In conjunction, section 90 of the National Credit Act5, prohibits
any contract to contain an ‘acknowledgement of debt’;- Section
90(1) read with (2)(a)(i), (ii) (b)(i) and (c)(i);
15.3.3 Furthermore the inclusion of an ‘acknowledgement of debt’ in the
mortgage bonds, signed and authorised by an agent of the 1st
Respondent, on behalf the ‘power of attorney’ defeats the ends of
justice and is a direct contravention of the Consumer Affairs
(Unfair Business Practice) Act, 1988 and the Consumer Protection
Act6;
15.3.3.1 Submission is also made that reliance by the 1st
Respondent on its home loan agreement is, in
5National Credit Act (34 of 2005) 6Consumer Protection Act (68 of 2008)
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contrast, unjust, irregular and without merit.
Substantial submissions where made from the
inception of the proceedings in the Court below that
the 1st Respondent had acted irregularly, which
actions were in-consistent with Contract Law and
business ethics.
15.3.3.2 Having regard to the above, I submit that the United
States of America Statute, “Truth in Lending Act7”
gives consumers the right to cancel certain credit
transactions that involve a lien on a consumer's
principal dwelling, regulates certain credit card
practices, and provides a means for fair and timely
resolution of credit billing disputes. With the
exception of certain high-cost mortgage loans, TILA
7The Truth in Lending Act (TILA) of 1968 is United States federal law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing are calculated and disclosed. The Truth in Lending Act was originally Title I of the Consumer Credit Protection Act, Pub.L. 90-321, 82 Stat. 146, enacted June 29, 1968. The regulations implementing the statute, which are known as "Regulation Z", are codified at 12 CFR Part 226. Most of the specific requirements imposed by TILA are found in Regulation Z, so a reference to the requirements of The TILA usually refers to the requirements contained in Regulation Z, as well as the statute itself. From TILA's inception, the authority to implement the statute by issuing regulations was given to the Federal Reserve Board. However, on July 21, 2011, TILA's general rule making authority was transferred to the Consumer Financial Protection Bureau, which was established on that date pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act which was enacted in July 2010. The Federal Reserve will retain some limited rule making authority under TILA for loans made by certain motor vehicle dealers, and for certain other provisions. References: Dlabay, Les R.; Burrow, James L.; Brad, Brad (2009). Intro to Business. Mason, Ohio: South-Western Cengage Learning. p. 469.ISBN 9780538445610. Reverse Mortgages, Retrieved December 20, 2011. Truth in Lending Handbook, Office of Comptroller of the Currency, Administrator of National Banks, December 2006.Truth in Lending Act Legislative History Law Librarian's Society of D.C.
[42]
does not regulate the charges that may be imposed
for consumer credit. Rather, it requires uniform or
standardized disclosure of costs and charges so that
consumers can shop around. It also imposes
limitations on home equity plans that are subject to
the requirements of Sec. 226.5b and certain higher-
cost mortgages that are subject to the requirements of
Sec. 226.32. The regulation prohibits certain acts or
practices in connection with credit secured by a
consumer's principal dwelling.
15.3.3.3 Having regard to the above, the Court below had
condoned the 1st Respondent’s actions, despite such
actions being contra bona mores, prejudicial (see
paragraph 15.2 above) and removes all common law
defences I could raise. This is evident in the
proceedings before this application.
16. The Uniform Rules of Court, rule 32(2) make provision for “…, together with an affidavit
made by himself or by any other person who can swear positively to the facts verifying the
cause of action and the amount, if any, claimed and stating that in his opinion there is no
[43]
bona fide defence to the action” and that;” ~ “… notice of intention to defend has been
delivered solely for the purpose of delay.” and further “… If the claim is founded on a
liquid document a copy of the document shall be annexed to such affidavit …”
16.1 In the matter of FirstRand Bank Ltd v Beyer8 after an analysis of Rule 32(2) of the
Uniform Rules of Court clearly shows that the court, before it can grant summary
judgment, must, from the facts set out in the verifying affidavit itself, be able to
make a factual finding that [a] the person who deposed to the affidavit was able to
swear positively to the facts alleged in the summons and annexures thereto and [b]
be able to verify the cause of action and [c] the amount claimed, if any, and be able
to [d] form the opinion that there was no bona fide defence available to the
defendant, and that the [e] notice of intention to defend was given solely for the
purpose of delay.
16.2 Juristic entities, like that of the 1stRespondent, whom authorise employees to
dispense and swear to the correctness of avertments in an affidavit are to state how
it obtained such authority. It follows that such authority must also be annexed to
such affidavit. In this instance the Respondent had failed, neglected and/ or refused
8FirstRand Bank Ltd v Beyer 2011 (1) SA 196 (GNP).
[44]
to address this requirement despite a ruling by the learned Judge Bava that it need
to comply with this requirement;
16.2.1 The 1st Respondent had as stated herein, presented supporting affidavits,
which I submit, are unsupportive as to the requirements to prove or
disprove such appointments and authority. The Court below had failed to
thoroughly examine this point and had, per-say, accepted the 1st
Respondent’s contention as per Advocate Shem Symon, that it had filed
such supporting affidavits.
16.2.2 Ideny that the facts referred to in 1stRespondent’s particulars of claim
[annex “MT 1” page 16”] are within the personal knowledge of Mr Joop
Dekker. Emphasis is made that under these premises, Mr Dekker does
not and cannot have knowledge, nor could he comment on i) the
avertments made in my pleadings, or ii)the nature of my defence. The
Court below had erred to give proper consideration to this fact. Had it
investigated or given proper thought to the representation, it would have
come to a different finding.
17. The standard terms and conditions of the 1stRespondent declares the renouncement of all
benefits from the exceptions, which might or could have been pleaded in so far as it places
[45]
a bar to any claim/ defence that I could have under the loan agreement/ mortgage bond.
These presences are in contravention of Section 90 of the National Credit Act, 2005,
Section 90(1) read with (2)(a)(i), (ii) (b)(i) and (c)(i). I was therefore barred from raising
and entering a plea to this exception, although I haves how n proper grounds of
profiteering. The Court below had erred by not taking cognisance thereof.
18. I submit, given the principles of Securitisation, Seignorage, the Fractional Reserve System
and other processes that derive from bank processes, including loan contracts, are legally
and civilly prejudice, harmful, and amount to unjust enrichment that causes financial
hardship which in turn causes the arbitrary deprivation of ownership, or continued
ownership of land and housing.
19. If, for reasons of operating in law and rules of civil procedure I have failed to follow
proper service or notice, or to have given my defence proper, I submit that a failure to do
so should have been met by an enquiry conducted by the Court below so to determine the
precise contention. I make the latter point as my defence is not common, it is technically
difficult and would seem to go against the common practice of raising a defence. For this
reason alone, an outright dismissal was not warranted by the Court below irrespective of its
misgivings or presentation.
[46]
19.1 I submit further that the High Court has an obligation in terms of the Constitution
to develop the common law, not to be blindsided by new principles and, where
appropriate, it is required to adjudicate proper on matters by having sufficient
knowledge of the matter it is to preside over. The Court below could not have taken
proper knowledge or enquiry of the 58 page presentation made to it by me, which
included reference to law, case law and avertments of profiteering, contraventions
of law and errors contained in the 1st Respondent’s submissions. Instead, the court
presented its Judgment directly and in no less than one minute after the matter was
heard.
20. The Court below heard arguments made by the 1st Respondent’s counsel, that I belong to
some kind of “cult” that holds some kind of grudge against the bank and all of banking as a
whole. It was also alleged that other matters, where similar defences where raised, but not
adjudicated on, thus res judicata, were of the same “cult”. These avertments have no place
before a Court, were unsubstantiated and irrelevant. Such avertments were designed and
uttered to deceive the Court that my defence was “nonsensical”, “irrelevant” and
“fanciful”. We cannot know whether the Court below had taken cognisance of these
avertments, or whether it placed evidential weight to these avertments, because the learned
Judge did not provide a written Judgment with reasoning. Within these confines I believe
that the learned Judge was persuaded by these avertments.
[47]
20.1 I learned that counsel for the 1st Respondent gained his reputation as a specialist in
banking law. If this is factual, it is submitted that counsel erred in his duty to the
Court below. Counsel should have been very knowledgeable of securitisation,
seigniorage and the fractional reserve system; therefore his election to mount a
defence of “nonsensical”, “irrelevant” and “fanciful” was in conflict with the
prescribed code of conduct. Counsel would thus have assisted the 1st Respondent in
deceiving Court below.
20.1.1 In this regard I refer the Court’s attention to the appropriate paragraphs
of the 1st Respondent’s replying affidavit:
20.1.1.1 Ad paragraph 18, “tirade of unintelligible allegations”;
20.1.1.2 Ad paragraph 7, “nonsensical and fanciful”;
20.1.1.3 Ad paragraph 8, “theoretical defences” and [lack of] “factual
foundation”;
20.1.1.4 Ad paragraph 10, “fanciful and dishonest” and “bizarre and
outrageous contentions”.
21. The 1st Respondent tried to turn me in to an ignorant, mindless individual trying
desperately to wangle his way out of debt. I submit that my defence and these proceedings
[48]
contain no such motivation. The defence is based on sound principles of law, supported by
common law principles, legislation, public policy and more so a principle that the actions
of the 1st Respondent are against the moral fibres of a democratic society where rights are
protected by guarantee in the pre-amble to the Constitution.
22. It is humbly submitted that, where rights are circumvented, prejudiced and profiteered on,
it does become my business, and the business of the Court below. Such violation of rights
cannot be ignored or played off as “fanciful” cult-type mala fides merely because the
defence is not pleaded correctly, represented by expensive lawyers using intimidating
tactics, or the lack of correct attire. A representation/ defence is valued for its impact/ value
or weight it might have on the proceedings; in this case a summary judgment.
23. One cannot lend that which one does not possess. If one does, but acquired it through
another process e.g. securitisation, seigniorage or the fractional reserve system, the action
is therefore simulated, and the lender becomes an “intermediary” or “broker”. Such
relationship embodies the moral, ethical and fiduciary right of disclosure.
24. If one cedes, gives as security, or sells the contractual rights to another, as this case
implies, the 1st Respondent cannot be the “Applicant” in a motion proceeding. It would
lack the appropriate locus standi. In the alternative if the 1st Respondent had disposed of its
security and had been given the authority to act on such legal action by such third party,
[49]
the 1st Respondent did not include such authority in its founding affidavit. In such event it
is contested that the 1st Respondent would, in any event, be entitled to be a party to the
proceedings. As per the definition of “business of the bank” in the Bank Act, the 1st
Respondent would be precluded from acting as such. Notwithstanding this fact, the 1st
Respondent would still be acting as ‘intermediary” in these proceedings.
25. I submit that the learned Judge Mabesele erred in finding that my submissions in
paragraphs 1 and 2 had nothing to do with the loan agreement, as it has everything to do
with the home loan agreement. I make this submission based on the following facts; If it is
alleged that a company acted irregularly in liquidation proceedings, the alleger can apply
for the “corporate veil to be pierced”. In these premises, I pleaded irregularity and, in
addition, unjust enrichment (profiteering) and contravention of the Bank Act. Reasonable
doubt was raised, having these facts investigated or researched by the learned Judge; it
would have become very apparent that both these paragraphs had everything to do with the
loan agreement because its very notation or existence was to deceive me.
26. A further finding by the learned Judge Mabesele that what the bank does with its
documents should not be the concern of the respondent” is as follows: I humbly submit
that it has everything to do with the matter, in particular where I mounted evidence that the
1st Respondent had securitised the debt. It therefore lacked the appropriate right (locus
standi) to bring these proceedings. I would like to point-out to the Honourable Court that I
[50]
had pleaded the aforementioned, and the 1st Respondent through its answering affidavit,
failed to properly answer this averment.
27. During the application for leave to appeal, the 1st Respondent, represented by Advocate
Shem Symon, persisted to ridicule and belittle my representation and mentioned that the 1st
Respondent does in fact conduct its business by virtue of entering “debit” and “credit”
entries. He further conceded that the bank does deal in securitisations, and further that
these dealings have nothing to do with me, it is of no concern, and is irrelevant. He further
stated that what was important was the fact that his client, the 1st Respondent is the victim
here and was prejudiced by these proceedings.
27.1 I have stated before why these proceedings are contested, thus I will not reiterate,
other than to point-out that the 1st Respondent openly admitted that it does deal in
“debit” and “credit” entries [see Fractional Reserve System herein],and in
securitisation. Neither of these points were elaborated on, nor extended by the 1st
Respondent’s counsel. The learned Judge did not ask any qualifying questions to
the averment of the 1st Respondent in this regard. By the 1st Respondent’s own
admission, it had confirmed by my notion in defence, a point that the learned Judge
either ignored, failed to take into consideration or was oblivious to. Given this fact,
the learned Judge should have considered the grounds of my application against the
facts, having regard to the avertments of the 1st Respondent.
[51]
28. In conclusion, I submit that when the learned Judge announced his findings, he did so by
pulling a paper from his table and commenced reading from it. The impression was clearly
that the Judgment was already written or pre-prepared prior to the matter being finally
argued by the parties. This impression was also noted by several other people in court,
including Mr Sing from the Human Rights Commission, whom was observing the hearing.
28.1 It is improbable that full consideration to all the facts contained in my
representation could have been considered by the learned Judge; it is also
inconceivable that, given the circumstances, a proper finding could have been made
where the matter is one of a pivotal economic and technical nature.
29. I did not ask in any one of these proceedings to have the case dismissed against the 1st
Respondent. I simply requested, given the merits of the defence, for the matter to go to trial
so it could be considered on evidence and statement of witnesses. A trial being denied,
under these presents, offends the underlining principle of the audi alteram partem rule so
incorporated in the Constitution.
30. I submit hereinafter a summary of contraventions made by 1st Respondent:
30.1 Failure to disclose documents which the 1st Respondent is obliged to do in terms of
the National Credit Act read with the 1st Respondent’s PAJA declaration;
[52]
30.2 Prejudice caused by the actions of the Court below by belittling me, ousting my
arguments and rejecting my evidence in Court without examination;
30.2 Failure by the 1st Respondent to produce evidence as to the appointment and
authorisation of Joop Dekker causing prejudice by the reliance on anill-founded
affidavit;
30.2.1 The Court below, by ignoring this fundamental requirement, caused me
prejudice to present proper evidence: in that the Court below relied on
evidence that bridges hearsay.
30.3 The Court below caused me prejudice by not applying its mind to the facts so
dispensed with; had proper legal investigation or enquiry been done in conjunction
with the development of common law (contract law), the facts would not of been as
alien as the 1st Respondent made it out to be;
30.4 The Court below failed to give effect to the protection granted to debtors in terms
of section 90 of the National Credit Act; which specifically disallows contractual
terms and obligations/ conditions that cause financial prejudice and arbitrary
displacement of property;
[53]
30.5 The 1st Respondent, in dealing in improper financial schemes, had indeed induced
financial displacement and prejudice by purporting that it had provided tangible
value in liquid money in exchange for repayment of tangible liquid money, with the
added burden of excessive interest. The 1st Respondent had at all material times
been fully aware, or could have been aware, or should have been aware, that it does
not have, or own such tangible liquid money, under which its claim is brought;
30.5.1 That the 1st Respondent entered into an agreement with me, where it, at
all material times had known, or should have known that it was entering
into an illiquid agreement, fully knowledgeable of the profiteering/
fraudulent consequences and subsequent financial prejudice it would
place on me; and
30.5.2 That the 1st Respondent had knowledge or could have foreseen that their
power of attorney could and would be used to sign the document
“continuing mortgage bond,” which imposes severe underlying financial
and civil prejudice; and
30.5.3 That the 1st Respondent had knowledge or could have foreseen that their
power of attorney could and would be used in the process of
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securitisation or security to fund and/ or stand as security for creating
their own loan; and
30.5.4 That the 1st Respondent had knowledge or could have foreseen that their
power of attorney would be used, in due course to fund my home loan;
and
30.5.5 That the 1st Respondent acted as “intermediary” or “broker” as the case
might be, therefore disallowing any actions I could have taken against
them in terms of these premises, thus causing me financial prejudice; and
30.5.6 That the 1st Respondent had knowledge or could have foreseen that their
power of attorney/ or loan agreement will be used in the secret
application of financing through the likes of securitisation and/ or
fractional reserve system and/ or seigniorage. Such funding would
generate income that could have benefited my financial position, but was
not disclosed and was deliberately withheld from me, thus causing me
financial prejudice; and
30.5.7 That the 1st Respondent had knowledge or could have foreseen that their
power of attorney/ home loan agreement will be used in generating
[55]
funding or funds without my knowledge, permission or explicit consent;
and
30.5.8 That the 1st Respondent had knowledge or could have foreseen that their
power of attorney would be used to generate a loan with benefits of self-
enrichment (undue enrichment) had failed and/ or neglected to disclose
this fact, therefore causing me financial prejudice.
31. The 1st Respondent misrepresented itself, on the premise of the loan agreement, that it is
the holder (in liquid form of money) and is both willing and able to ‘lend’, where at all
material times it was aware or should have been aware that this averment is untrue,
misrepresented or faculty false;
31.1 In addition to the aforementioned, the 1st Respondent placed audio visual and print
media advertisements into the market where it purports to be the lender of money
and giver of mortgage loans, where the contrary is true. This false impression led
me to believe that I was, in fact, coerced into taking my business to 1st Respondent
as it was one of only a limited few that has such ability.
32. The 1st Respondent misrepresented itself before the Court below when it elected to plea in
its answering affidavit, that it does not understand my defence. It was fully aware or should
have been aware, that the proper authoritive person should have acted on the 1st
[56]
Respondent behalf. Such person should rightfully have known and disclosed that it was
acting in such securitisation transactions and/ or fund/ financial principles as per annexure
“MT 5” and “MT 6”. The 1st Respondent therefore had caused undue, unnecessary court
procedures causing financial prejudice and the withholding of proper adjudication.
33. Given the facts aforesaid the 1st Respondent had acted in such manner and in such context
that it is in breach of its fiduciary responsibility toward me.
34. Having regard to the principles of Seignorage and the Fractional Reserve System, the 1st
Respondent is in breach of the in duplum rule, as its interest is based on illiquid accounting
entries that are not backed by any liquid, sounding in money, in its so-called loan to me.
35. Considering the aforementioned, the 1st Respondent caused me irrevocable prejudice as I
completed my yearly account based on liquid money for presentation to the South African
Revenue Service based on the loan agreement. The facts now indicate that same was never
liquid.
36. The principles of cession and other undue financial trading of my security caused me
prejudice as I do not know who the holder of my bond is, or the whereabouts of the
security. Questions arise such as: is such entity sound in business or liquid to the extent
that my property might be under risk of liquidation or other contractual obligation?
[57]
POINTS RAISED IN THE COURT A QUO:
37. I have raised the following points as per annex “MT 2” page 385 to 392 read with “MT 3”
pages 393 to 460;
INTRODUCTION TO BUSINESS OF THE BANK
38. The Bank Act, Act 94 of 1990 specifically excludes the bank from engaging in
securitisation where it is the holder of such security or has a vested interest in such
security. The latter averment was emphasised by notice in the Government Gazette [No.
30628, Volume 511, January 2008] which amends the Bank Act by changing the “business
of a bank” ~ [Section 1, “definition”] to exclude securitisation from the “business of the
bank”.
38.1 Furthermore a Bank is precluded from using its client’s ‘deposits’ for loans and are
furthermore restricted in how it utilises its “allocated capital and reserve funds” and
other funds in terms of sections 70(2), 70(2A) and 70(2B). These prescriptions
follow through and are further defined in the South African Reserve Bank Act, Act
90 of 1989.
38.2 Commercial banks, invest their money with the South African Reserve Bank and
the interest received on such investments is called ‘seigniorage’.
[58]
38.3 Ordinarily seigniorage is an interest-free loan (historically of gold) to the issuer of
the coin or paper money. When the currency is worn out, the issuer buys it back at
face value, thereby balancing exactly the revenue received when it was put into
circulation, without any additional amount for the interest value of what the issuer
received.
38.4 The solvency constraint of the South African Reserve Bank only requires that the
present discounted value of its net ‘non-monetary liabilities’ (separate from its
monetary liabilities accrued through seigniorage attempts) be zero or negative in
the long run. Its monetary liabilities are liabilities only in name, as they are
irredeemable: the holder of base money cannot insist at any time on the redemption
of a given amount of base money into anything else other than the same amount of
itself (base money); unless, of course, the holder of said base money is another
Reserve Bank/ Federal Reserve Bank reclaiming the value of its original interest-
free loan.
38.5 Currently over half the revenue of Zimbabwe is in seigniorage. Zimbabwe has
experienced hyperinflation, with the annual rate at about 24,000% in July 2008,
indicating that prices would double every 46 days.
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38.6 Currently notes and coins represent 5 to 6%in the market place, the remaining 94 to
95% are generated by banks, who loan against their share capital and reserves
which the banks invest in property, short term assets and so on.
38.7 Until 1980 the South African Reserve Bank would issue directives as to the amount
of reserves relative to the duration of the loan, the volume of credit advanced and
the maximum growth rate at which credit extension could increase.
38.8 Within the framework of co-operation between the South African Reserve Bank
and Commercial Banks, a bank can loan what it has put into circulation, without
providing any additional amount for the interest value of what the issuer received.
38.9 Thus, a loan from the South African Reserve bank to a bank is interest free, less the
cost of the manufacturing (print) of the note. This equates to a 95% interest free
loan.
38.10 From the aforementioned two particular legal questions are raised:-
38.10.1 The bank, in this instance the 1st Respondent, was not the institution that
loaned in the first instant as it had presented itself to me, via press
media and its home loan agreement. In other words, the 1st Respondent
only obtained the required funding once I had completed and signed the
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necessary contracts. Therefore, by non-disclosure in the contract, the 1st
Respondent failed the very basic requirement in contract law; that is, its
true stance was that of an intermediary and not the physical lender of
money. It therefore can also be said that there could have never been a
true ‘consensus’ between the parties or “meeting of the minds.”
38.10.2 In conjunction to the aforementioned, the 1st Respondent did not have
the necessary ‘capacity’ to act in the first instance, as it only became the
holder of ‘money’ after the fact (conclusion of agreement).
38.10.2.1 I could not have had ‘consensus’ as the 1st Respondent,
fully knowledgeable of its lack of money, did not disclose
these facts. What the 1st Respondent had in mind and what I
had at mind were two very separate and very distinct ideals.
38.10.2.2 The 1st Respondent lacked the ‘capacity’ to act, due to the
fact it only became the holder of what was borrowed after
the conclusion of the contract; It, the 1st Respondent,
therefore was never in possession of what was presented as
‘being’ in their possession prior to the contract being
concluded. In other words, the transaction was subjected to
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them obtaining the funds from another, the South African
Reserve Bank.
38.10.2.3 For the 1stRespondent to have the appropriate and correct
status, the contract should have clearly stated that it is
acting as “intermediary” or “broker”, subject to the
Respondent obtaining a loan from the South African
Reserve Bank. This fact is not disclosed in the
1stRespondent’s contract.
38.10.2.4 In addition, the 1st Respondent does not disclose this fact, or
any third party association, anywhere, period.
38.11 The 1st Respondent in this regard will argue, as they have done before, that the
relationship between themselves and that of the 2nd Respondent is one conjured in
terms of legislation. Thus the 1st Respondent, like other banks, are exclusively and
uniquely authorised to utilise the future “advancement” of loans at a fraction of the
apparent cost of money, i.e. almost free. Their argument, with due respect, has
nothing to do with the fact that the 1st Respondent still acts as ‘intermediary’ or
‘broker’, irrespective of their special legislative relationship. As such, they cannot
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escape their common law and fiduciary duty to provide full disclosure of all
material facts.
38.12 It is the 1stRespondent whom is required in law, inter alia, the National Credit
Act(34 of 2005), Consumer Protection Act(68 of 2008), the latter all deriving its
legislative inauguration from the South African Constitution, 1996, to disclose all
material facts to a consumer so to enable a consumer to make an informed decision.
38.12.1 The requirements to disclose, which contention was in particular raised
in the Court below, was relevant and important as the lack of disclosure
raises questions as to the true intent of the 1stRespondent.Myalludement
is that the 1st Respondent is not disclosing these facts for the following
reasons;
38.12.1.1 Its gain in interest, comprising of almost 90% profit; and
38.12.1.2 The 1stRespondent, not being compelled by legislation to
disclose such transactions.
38.13 The facts stated above remain intact, irrespective if the 1stRespondent had utilised
its credit with the 2nd Respondent or “other” security to obtain the loan, as it had
masked their truthful role as intermediary or broker.
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38.13.1 The 1st Respondent, acting in any other principal other than that which
is allowed in the Bank Act, contravenes the outlining prescription of the
“business of the bank”; if it acts as intermediary, it needs to conform
with such legislation and other governing subordinate rules and policies
as would apply to these industries.
38.13.1.1 Having regard to the proposition above, the 1st Respondent,
in acting as intermediary or broker, circumvents the
requirements set out in legislation for such industries;
therefore it flies under the radar.
39. When the 1stRespondent obtained a ‘loan’ from the 2nd Respondent, it received same as
South African Reserve bank “bonds” which closely resemble ‘promissory notes’. No liquid
money passes from one bank to another, but rather a debit and credit entry takes place in
the accounting records of each institution. The latter entries are then followed through to
the eventual borrower, attracting escalating costs and interest along the way. In this regard
the Honourable Court’s attention is drawn to annexure “MT 16” read with “MT 6”, “MT
7” and “MT 12” and “MT 13”.
39.1 Due to the 1stRespondent’s use of electronic methods, it has become highly
proficient at debiting and crediting accounts with nothing more than “nothing.”
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39.1.1 To illustrate the point above, where “liquid money/ cash money” is
required, the 1stRespondent would simply place such funds into the
possession of the drawer from reserved funds. However, in all other
transactions (such as the advancement of credit)it will simply pass a
‘credit’ or ‘debit’ as required, or pass it along to the recipient’s bank
account. This is achieved by the very same technology we have become
so accustomed to. This is so if consideration is given to the Financial
Markets Bill, annex “MT 22” hereto.
40. The 1st Respondent will raise the argument, as it has done in the Court below, that these
processes suffer no prejudice to the lender; I submit that the contrary is true due to
mathematic calculations utilised in this process. The following serves as an example;
40.1 If Bank A’s total exposure is one billion and it requires additional ‘capital’ to
extend and uphold its business for the next year, Bank A will ‘borrow’ from the
South African Reserve Bank ‘bonds’ or ‘credit notes’ at close to 5% of its face
value or less. It will then enter these “bonds” into the accounts of their clients
whom have borrowed from Bank A. These clients are now obliged to affect ‘liquid
money’ as repayment, first towards interest then to capital.
40.2 The requirement for ‘liquid money’ repayments by the clients is to;
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40.1.1 Replenish the 1stRespondent’s reserves; and
40.1.2 To receive a credit from the 2nd Respondent on the return of these notes.
41. The principles followed by the 1st Respondent and 2nd Respondent jointly eradicate sound
business principals and ethics as the 1st Respondent profiteers horizontally and vertically.
Horizontally, it gains from the interest it earns and vertically, it gains from returning liquid
money to the 2nd Respondent. Thus, it could be said that the banks earn 100% profit on
loans it makes, with no particular risk. See annexure “MT 13” read with “MT 14” and
“MT 16”, also the principals contained in the GEAR policy, annex “MT 17” hereto.
41.1 This places an unreasonable financial prejudice onto the borrower, so much so, that
the legislature has asymmetrically authorised the Banks, like the 1stRespondent, to
print proverbial money at leisure at my expense and factual financial prejudice to
me. See “MT 12” hereto.
41.1.1 The 1st Respondent pounced onto me, demanding its fulfilment of contract,
arbitrarily so, considering the facts aforementioned.
42. The 1st and 2nd Respondent have exclusive access to this money making capability, which
diminishes true competiveness in the market. Although each bank is structured differently,
the mathematics remain the same, which equals no more than 1% difference in borrowings.
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The legislative prescription does not allow for healthy competition; to the contrary it
causes a manifestation of corporate collaboration that monopolises the banks.
43. Given the facts aforementioned, consideration must be given that the 1stRespondent’s
claim would, in effect, be incorrect. Its claim in liquid money has no basis, as the
fundamental aspect is that they did not lend liquid money. It was no more than a simulated
promissory note, entered as a debit/ credit entry.
44. The 1st Respondent’s certificate of balance is based on liquid money that clearly could not
be the foundation of its claim which is fictional and untenable, lacking the very strict
definition of liquidity on demand.
45. It follows that the claim of the Respondent would be in contravention of the In Duplum
Rule, so much so, that the interest charged would in fact be null and voidable as [a] the
liquid money never received entry into the books of the Respondent, and in the alternative
[b] interest charged on the capital is based on an illiquid transaction.
BANK CREDIT
46. It is common cause, but not general public knowledge, that banks conclude ‘bank credit’
with their clients as illustrated here. A client borrowed R10, 000 from a bank. The bank in
return opened for that client a checking account for R10, 000, gave him a checkbook, and
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told the client that he can now write out checks for an amount up to R10, 000. The bank,
for its part, wrote in its books a deposit of R10, 000 and a liability of R10, 000. When a
loan is made in this manner, the bank has created R10, 000 worth of new bank credit “out
of thin air.” The bank did not give out any of its own money, nor out of its reserves, or any
of its depositors’ money. But the bank credit money (checks that the client/ borrower
would write out) would buy goods and services in the same manner as real/ liquid9 money
that someone had earned. See annexure “MT 11”, “MT 7” and “MT 21”.
46.1 If the collateral/security pledged for that loan contained items that the client/
borrower was about to sell, then that bank credit money would not be inflationary10,
because goods were available to be claimed by it. However, if the collateral
security were items such as the client’s vehicle or house, which the client did not
intend to sell, then that bank credit money could be inflationary.
46.2 The bank credit money was not earned by anyone. It was not earned by the bank
and it was not earned by any of the depositors, it was just a bookkeeping entry.
9Cash such as coins, notesthat are tangible.
10In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.
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46.3 When the loan is paid back by the client, the bank credit money will no longer
exist. The bank’s books will show a decrease of deposits and liabilities of R10 000
each. It also will show a profit of the amount of interest it received for the loan of
its bank credit, or for its bookkeeping transactions.
46.4 It is projected that as much as 90% of all the buying and selling in South Africa is
done with interest-bearing bank credit.
46.5 Within these premises it is important to note that the word money is frequently
applied to anything that is used as a medium of exchange. In the past, many items
have served as media of exchange, such as gold, silver, cattle, grain, salt, notes, and
checks, certificates of credit, postage stamps and so forth.
46.6 In South Africa, the power to mint coins and notes has been passed on to the South
African Reserve Bank in terms section 10(1)(a)(i) - (v) of the South African
Reserve Bank Act (90 of 1989).
SECURITISATION:
Annexure “MT 5”, “MT 6”, “MT 7”, “MT 8” to “MT 10” and “MT 11”
47. Securitisation is the financial practice of pooling various types of contractual debt such as
residential mortgages, commercial mortgages, auto loans or credit card debt obligations
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and selling said consolidated debt as bonds, pass-through securities, or collateralised
mortgage obligation [CMOs], to various investors. The principal and interest on the debt,
underlying the security, is paid back to the various investors regularly.
48. Securities backed by mortgage receivables are called mortgage-backed securities (MBS),
while those backed by other types of receivables are asset-backed securities (ABS).
49. As stated supra, paragraph 13 hereof, it is not the ‘business of the bank’ to engage in or
deal in securitisation of its own contractor assets. The Respondent is prohibited from such
activities.
50. The 1stRespondent has confirmed this notation in many submissions. See annex “MT 1”
and “MT 3” hereto. Paragraph 1 of this publication reads as follows: “SA Home Loans
(“SAHL”) is not a bank and does not accept deposits from the public. As such, in order to
be able to fund the home loans which are given out to clients, SAHL (South African Home
Loans) has set up a securitisation funding platform.” and at paragraph 3 “The capital
markets are where long term funding (greater than one year in duration) can be obtained
and it is, as such, the place where many lenders, banks included, would obtain long term
funding for their longer term assets (such as home loans).”It should be pointed out that the
1st Respondent is the majority shareholder of SA Homeloans.
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51. To achieve the aforementioned, the process would in most instances be one where a
suitably large portfolio of assets is "pooled" and transferred to a "special purpose vehicle"
or "SPV." The SPV (the issuer), is a tax-exempt company or trust formed for the specific
purpose of funding the assets. Once the assets are transferred to the issuer, there is
normally no recourse to the originator. The issuer is "bankruptcy remote," meaning that if
the originator goes into bankruptcy, the assets of the issuer will not be distributed to the
creditors of the originator. In order to achieve this, the governing documents of the issuer
restrict its activities to only those necessary to complete the issuance of securities.
52. Accounting standards govern when such a transfer is a sale, a financing, a partial sale, or a
part-sale and part-financing. In a sale, the originator is allowed to remove the transferred
assets from its balance sheet: in a financing, the assets are considered to remain the
property of the originator. Under South African accounting standards, the originator
achieves a sale by being at arm's length from the issuer, in which case the issuer is
classified as a "qualifying special purpose entity" or "qSPE".
53. For a bank, like the 1st Respondent it will be required to bundle the security (a bond
registered over the title deed) with other agreements and assign the rights and title over to
the particular securitisation broker or company. See annexure aforesaid. Within these
premises, one will note that the 1st Respondent (bank) loses its rights and title to the
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security which results in the 1st Respondent’s lack of locus standi in the proceedings in the
Court below.
54. The originator (the 1st Respondent) initially owns the assets engaged in the deal. This is
typically a company looking to raise capital, restructure debt or otherwise adjust its
finances. Under traditional corporate finance concepts, such a company would have three
options to raise new capital: a loan, bond issue, or issuance of stock. However, stock
offerings dilute the ownership and control of the company, while loan or bond financing is
often prohibitively expensive due to the credit rating of the company and the associated
rise in interest rates.
55. If for any reason the 1st Respondent claims that it has the proper locus standi, it had, in any
event failed to do so proper in their surmising proceedings;
56. Once again, the 1st Respondent finds itself in a precarious position, as it once again was not
the original ‘moneylender’, but rather an “intermediary” with the added negative legal
standing of lacking locus standi;
57. The 1st Respondent now also benefits from the transaction of securitisation two folded: ~
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57.1 The 1st Respondent gains furthers loan capacity as it has rid its debt and its
exposure to entertain more loans to the public without my knowing participation;
and
57.2 Commissions or interest are earned by the 1st Respondent of securitisation
transactions; in other words, over and above earning in receivables from me it now
earns income from securitisation as can be seen annexure “MT 5” to “MT 7”
hereto. Securitisation makes it possible to record an earnings bounce without any
real addition to the firm. When a securitisation takes place, there often is a "true
sale" that takes place between the Originator (the parent company) and the SPE.
This sale has to be for the market value of the underlying assets for the "true sale"
to stick and thus this sale is reflected on the parent company's balance sheet, which
will boost earnings for that quarter by the amount of the sale. While not illegal in
any respect, this does distort the true earnings of the parent company.
58. I had signed a limitless power of attorney authorising the 1st Respondent to dispense with,
inter alia, registration of a bond onto the title deed of the property, thus, the deed will form
part of security held by 1st Respondent against the loan. However, the registration of the
bond together with the power of attorney is utilised by the 1st Respondent to gain funding
from processes mentioned above and below. The 1st Respondent therefore does not (and
the power of attorney stipulates as much) require any further authority from me. The result
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being that I am in toto removed from any transaction the 1st Respondent concludes with
securities given by me.
59. I contend that the power of attorney was given explicitly for the exclusive use to register a
bond, and nothing more, therefore the use of the power of attorney in any other
formulations are without consent, authority and such use is in conflict with the National
Credit Act and law in general use, e.g. law of contract.
60. If such signature had been used, or in the alternative assigned to any other process of
securitisation or in its third alternative to gain funds or loans relating to securitisation, or in
its fourth alternative gain any benefit or in its fifth alternative placed an obligation on me,
the 1st Respondent had done so without explicit permission from me and the 1stRespondent
is in violation of the fiduciary relationship as between me and 1stRespondent (as banker)
and in terms of the Bank Act.
61. Had the 1st Respondent gained from any securitisation, aforementioned, I am entitled to
share in such profits, notwithstanding the fact that such profits would effectively lessen my
liability to the 1st Respondent.
62. The process of securitisation caused prejudice towards me as, unknown to me, another
becomes the holder of its security (bond) and therefore the risk arises that such security can
be called-up under any judicial process like liquidation or administrative orders;
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62.1 The opposite of the above, any income derived from securitisation is deliberately
withheld from me, or will never be brought to my attention as acknowledgement of
such securitisation process has been withheld from me by the 1stRespondent, so
much so, that the 1st Respondent is not even prohibited from making such entries
into the accounting books of the 1stRespondent.
63. The process of securitisation deprives me of knowledge as to who the true creditor is. As
such, its financial exposure, inter alia, could include the 1stRespondent acting as
intermediary and/ or collecting agent for a third party whom could, once again, earn
collection commission when acting as intermediary/ collecting agent.
63. Lastly, when the 1stRespondent entertains processes like securitisation, why is it held so
secretively; the subject matter being protected most vigorously by the 1st Respondent. The
only conclusion is that there is collusion between the parties that can only equate to
profiteering. If, which I contend it is not permitted in terms of how the 1stRespondent deals
therein, securitisation is allowed, why is it not disclosed or public knowledge?
64. Thus application for summary judgment must fail and the 1stRespondent must amend its
application proper; In this regard the Honourable Judge failed to realise that the defence so
offered by me is technically difficult, obscured by generality, implied contract law
remedies and the bone of contention is that what is contained in defence is further
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frustrated by the 1stRespondent’s unwillingness to go beyond its contract of loan, holding
same as a proverbial shield from the seriousness of the allegations made by me.
SEIGNORAGE:
See annexures “MT 12” hereto.
65. This subject matter co-exists with the foregoing paragraphs and the, “Business of the
Bank”, supra, discussed separately due to its fundamentals being difficult to comprehend
and/ or appreciated.
66. Seignorage can be defined as one of the following as it relates to these proceedings;-
66.1 Historically, if a person has one ounce of gold, he trades it for a ‘government-
issued gold certificate’ (providing for redemption in one ounce of gold), keeps that
certificate for a year, and then redeems it in gold. That person ends up with exactly
one ounce of gold again. No seigniorage occurs. [A historical view of the aforesaid
is available and as such will be made available is so needed.]
66.2 Instead of issuing gold certificates, a government converts gold into currency at the
market rate by printing paper notes. A person exchanges one ounce of gold for its
value in currency. They keep the currency for one year, and then exchange it all for
an amount of gold at the new market value. This second exchange may yield more
or less than one ounce of gold if the value of the currency relative to gold has
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changed during the interim. (Assume that the value or direct purchasing power of
one ounce of gold remains constant through the year.)
66.2.1 If the value of the currency relative to gold has decreased, then the person
receives less than one ounce of gold, thus seigniorage occurred.
66.2.2 If the value of the currency relative to gold has increased, the redeemer
receives more than one ounce of gold thus seigniorage did not occur.
66.2.3 Seigniorage, therefore, is the positive return on issuing notes and coins, or
"carry" on money in circulation.
66.2.4 The opposite, "cost of carry", is not regarded as a form of seigniorage.
66.3 Ordinary seigniorage can be defined as an ‘interest-free loan’, for instance, of gold,
to the issuer (South African Reserve Bank) of the coin or paper money. When the
currency is worn out, the issuer buys it back at face value, thereby balancing
exactly the revenue received when it was put into circulation, without any
additional amount for the interest value of what the issuer received.
66.4 Historically, seigniorage was the profit resulting from producing coins. Silver and
gold were mixed with base metals to make durable coins. Thus the British
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"sterling" was 92.5% pure silver; the base metal added (and thus the pure silver
retained by the government mint) was (less costs) the profit, the seigniorage.
66.5 Currently, under the rules ‘governing monetary operations’ of major central
banks(including the central bank of the USA and in similarity the South African
Reserve Bank), seigniorage on bank notes is simply defined as the interest
payments received by central banks on the total amount of currency issued. This
usually takes the form of interest payments on ‘treasury bonds’ purchased by
central banks, putting more Rands into circulation. However, if the currency is
collected, or is otherwise taken permanently out of circulation, the back end of the
deal never occurs (that is, the currency is never returned to the central bank). Thus
the issuer of the currency keeps the whole seigniorage profit, by not having to buy
worn out issued currency back at face value.
66.6 The solvency constraint of the 2nd Respondent only requires that the present
discounted value of its net non-monetary liabilities (separate from its monetary
liabilities accrued through seigniorage attempts) be zero or negative in the long
run. Its monetary liabilities are liabilities only in name, as they are irredeemable:
the holder of base money cannot insist at any time on the redemption of a given
amount of base money into anything else other than the same amount of itself (base
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money); unless, of course, the holder of said base money is another central bank
reclaiming the value of its original interest-free loan.
66.7 To illustrate the aforementioned points, in relation to modern day application of
seigniorage, would be to reference “Slate Online” comments on 29th of July 2011,
regarding the 2011 United States of America debt ceiling crisis. The author
suggested that the United States of America Government mint a US$5 trillion coin,
deposited the said mint with the Federal Reserve and used to buy back debt thus
making funds available. The author, whom in-effect suggested seigniorage was not
off-beat, as it later appeared that the United States of America caused such a bail-
out for its bankers, thus it created money out of nothing.
67. Seigniorage is a concept utilised throughout financial history over decades, the only
difference is that modern seigniorage does not have physical “liquidity” like gold as the
exchange principal; this has been replaced by axiomatic “I owe you notes”.
68. To further illustrate the points above and below, the Basel Reports emanating from the
Global Regulator, USA, which formulates the standard on bank capital adequacy, stress
testing and market liquidity risk agreed upon by the members of the Basel Committee on
Banking Supervision. Currently the Basel III (see annexure “MT 7” hereto) report is the
operative guideline internationally. These reports have been excluded from this application
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due to their volumes being extensive; however copies of Basel II and III shall be made
available at the hearing of this matter. A report by Deloitte has been annexed hereto as
“MT 7” as further referencing material.
69. The 1stRespondent, having required a loan from the 2nd Respondent in the historical sense
of seigniorage, had incurred nothing more than the printing cost of the ‘currency’, its
return value to balance the books, thus the loan was zero rated in interest; in the alternative
the Respondent had accounted a loan based on “bonds”, zero rated in interest, however
there is no seigniorage to be earned. See paragraph 24.2.4 supra.
FRACTIONAL RESERVE SYSTEM:
See annexures “MT 13”, “MT 14” and “MT 15”, read with “MT 17”
70. By definition, Fractional Reserve System forms part of banking where banks maintain
reserves (of cash and coin or deposits at the central bank) that are only a fraction of the
customer's deposits. Funds deposited into a bank are mostly lent out, and a bank keeps
only a fraction (called the reserve ratio) of the quantity of deposits as reserves. Some of the
funds lent out are subsequently deposited with another bank, increasing deposits at that
second bank and allowing further lending. As most bank deposits are treated as money in
their own right, fractional reserve banking increases the money supply, and banks are said
to create money. Due to the prevalence of fractional reserve banking, the broad money
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supply of most countries is a multiple larger than the amount of base money created by the
South African Reserve Bank. That multiple (called the money multiplier) is determined by
the reserve requirement or other financial ratio requirements imposed by financial
regulators, and by the excess reserves kept by commercial banks like the 1stRespondent.
71. The South African Reserve Bank generally mandates reserve requirements that require
banks to keep a minimum fraction of their demand deposits as cash reserves. This both
limits the amount of money creation that occurs in the commercial banking system, and
ensures that banks have enough ready cash to meet normal demand for withdrawals.
71.1 Problems can arise, however, when depositors withdraw a large proportion of
deposits simultaneously; this can cause a bank run or, when problems are extreme
and widespread, becomes a systemic crisis. To mitigate this risk, the governments
of most countries (usually through their Central Bank) regulate and oversee
commercial banks, provide deposit insurance and act as lender of last resort to
commercial banks like the 1stRespondent.
71.2 Fractional reserve banking is the most common form of banking and is practiced in
almost all countries, including South Africa. Although Islamic banking prohibits
the making of profit from interest on debt, a form of fractional reserve banking is
still evident in most Islamic countries. It must be noted that the 1st Respondent, like
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ABSA Bank Limited and First National Bank Limited have Islamic accounts
separated from the norm.
71.3 The nature of modern banking is such that the cash reserves at the bank available to
repay demand deposits need only be a fraction of the demand deposits owed to
depositors. In most legal systems, a demand deposit at a bank (e.g., a checking or
savings account) is considered a loan to the bank (instead of a bailment), see Bank
Act, repayable on demand that the bank can use to finance its investments in loans
and interest bearing securities. Banks make a profit based on the difference
between the interest they charge on the loans they make, and the interest they pay
to their depositors (aggregately called the net interest margin (NIM)). Since a bank
lends out most of the money deposited, keeping only a fraction of the total as
reserves, it necessarily has less money than the account balances of its depositors.
71.4 The main reason customers deposit funds at a bank is to store savings in the form
of a demand claim on the bank. Depositors still have a claim to full repayment of
their funds on demand even though most of the funds have already been invested
by the bank in interest bearing loans and securities. Holders of demand deposits can
withdraw all of their deposits at any time. If all the depositors of a bank did so at
the same time a bank run would occur, and the bank would likely collapse. Due to
the practice of the 2nd Respondent, this is a rare event today, as the2nd Respondent,
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usually guarantees the deposits at commercial banks, and acts as lender of last
resort when there is a ‘run on a bank’.
71.5 As an example for a very simple idea of how the fractional reserve system can
work is as follows: if there is only one bank, for a Reserve Fraction of 10%, a bank
can turn R1, 000.00 deposit “M0” of money, into R18, 997.00 of "M1" money.
Ignoring interest & fees, which makes banks even more profitable, this is how a
bank can copy 90% of "M0" money to make "M1" money, where in this example
the money loaned out is simply re-deposited in the bank and loaned out again, and
so on, that is how the R18, 997.00 "M1" money comes from the R1, 000.00 of
"M0" money. Banks, like the Respondent do this by accumulating loans and
deposits (effectively multiplying) the "M0" supply to make a larger "M1" supply.
Banks can collect interest on the spread of the higher loan interest from the lower
deposit interests. Return on Investment (ROI) for a bank is theoretically infinite
considering the bank is using none of its own money, if one excludes the cost of
setting up and maintaining the accounting system.
PREJUDICE CAUSED TO ME:
72. If a ‘bank run occurs’, like that of the ‘Northern Rock’ crisis of 2007 in the United
Kingdom. The collapse of ‘Washington Mutual’ bank in September 2008, the largest bank
[83]
failure in history, was preceded by a "silent run" on the bank, where depositors removed
vast sums of money from the bank through electronic transfer. In this regard see annexure
“MT 18” read with “MT 19”, “MT 21” and “MT 20”.
73. In a normal economic environment, cash is steadily being introduced into the economy by
the 2nd Respondent. See annex “MT 18” hereto. Given the facts of financial crises across
the Globe, there seems to more and more concerns that the Fractural Banking System will
fail, causing Governments to bail out more and more bankers at the expense of the public,
despite the 1stRespondent and alike profiteering in billions. Is it is up to this Honourable
Constitutional Court to take into account, or at least be aware of, the potential threat that
such a system poses to society, and thus act in the best interest of the large body of citizens
who stand to lose drastically as a result of such a systemic failure.
73.1 If creditors are afraid that the bank is running out of cash or is insolvent, they have
an incentive to redeem their deposits as soon as possible before other depositors
access the remaining cash reserves before they do, triggering a cascading crisis that
can result in a full-scale bank run. The aforementioned scenario has had its reality
when the 20Twenty Bank was placed in liquidation; its bailouts were stupefied,
leaving the public to fend for themselves, thus the victim.
[84]
73.2 Currently, policy papers and the state of Governance have inadequate funds to
maintain roads, municipal services and basic education, the Government therefore
does not sit in any position to cause a financial bailout should any one of the
events, supra, take place. In particular a 75 Billion rand exposure for the 1st
Respondent.
73.3 Redressing of such a failure can be seen in the events of Iceland and related
problems in their own home loan industries. These avertments are too voluminous
to include herein and also consist of video footage. Such will be made available at
the proceedings should the Honourable Court require so. See annex “MT 20” page
885 to 886 hereto.
ARTIFICIAL MONEY CREATION:
74. Money creation, as pleaded by me in proceedings before this application, has been rejected
and booted as an argument held by cults, ignorant laymen and outbursts of utter nonsense.
It would seem that history seems to be an untold story when these avertments are made; as
such possibilities seem surreal in an open and democratic society, like South Africa.
Therefore some time will be spent on explaining how money creation happens at banks
and that of the Respondent.
[85]
75. The relending model begins when an initial R100 deposit of the South African Reserve
Bank money is made into Bank A. Bank A takes 20 percent of it, or R20, and sets it aside
as reserves and then loans out the remaining 80 percent, or R80 to other customers of the
same bank.
76. At this point, the money supply actually totals R180, not R100, because the bank has
loaned out R80 of the South African Reserve Bank money, kept R20 of South African
Reserve Bank money in reserve (not part of the money supply), and substituted a newly
created R100 ‘IOU’ (I owe you) claim for the depositor that acts equivalently to and can be
implicitly redeemed for South African Reserve Bank money (the depositor can transfer it
to another account, write a check on it, demand his cash back, etc.). These claims by
depositors on banks are termed demand deposits or commercial bank money and are
simply recorded in a bank's accounts as a liability (specifically, an IOU to the depositor).
From a depositor's perspective, commercial bank money is equivalent to South African
Reserve Bank money – it is impossible to tell the two forms of money apart unless a ‘bank
run’ occurs (at which time everyone wants South African Reserve Bank money).
77. At this point in the relending model, Bank A now only has R20 of South African Reserve
Bank money on its books. The loan recipient is holding R80 in South African Reserve
Bank money, but he soon spends the R80. The receiver of that R80 then deposits it into
Bank B.
[86]
78. Bank B is now in the same situation as Bank A started with, except it has a deposit of R80
of South African Reserve Bank money instead of R100. Similar to Bank A, Bank B sets
aside 20 percent of that R80, or R16, as reserves and lends out the remaining R64,
increasing money supply by R64. As the process continues, more commercial bank money
is created.
79. To illustrate the above a chart representing the transactions above follows: (as per loans
between banks)
Bank Amount Deposited Lend Out Reserves
A 100 80 20
B 80 64 16
C 64 51.20 12.80
D 51.20 40.96 10.24
E 40.96 32.77 8.19
F 32.77 26.21 6.55
G 26.21 20.97 5.24
[87]
H 20.97 16.78 4.19
I 16.78 13.42 3.36
J 13.42 10.74 2.68
K 10.74 -- --
Total 457.05 357.05 100
Total Reserves ... 89.26
80. Although no new money was physically created in addition to the initial R100 deposit,
new commercial bank money is created through loans. The two boxes marked in italics
show the location of the original R100 deposit throughout the entire process.
81. The total reserves plus the last deposit (or last loan, whichever is last) will always equal
the original amount, which in this case is R100. As this process continues, more
commercial bank money is created. The amounts in each step decrease towards a limit. If a
graph is made showing the accumulation of deposits, one can see that the graph is curved
and approaches a limit. This limit is the maximum amount of money that can be created
with a given reserve rate. When the reserve rate is 20%, as in the example above, the
[88]
maximum amount of total deposits that can be created is R500 and the maximum increase
in the money supply is R400.
82. Considering the magnitude and scale at which money is created, one can simply not ignore
that commercial banks, like the 1stRespondent, are directly the cause of increase and
decrease of loan rates. Fractional reserve banking allows the money supply to expand or
contract.
83. Generally the expansion or contraction of the money supply is dictated by the balance
between the rate of new loans being created and the rate of existing loans being repaid or
defaulted on. The balance between these two rates can be influenced to some degree by
actions of the 2nd Respondent.
84. Returning to the contention I have shown from inception of these cases, one cannot simply
ignore the facts above and expect to be profiteered on; and, when called-upon to make
good an agreement which was designed to circumvent liability, disable defences, and
condone activities that beg justification as to why a system of such gross infringement and
prejudice could exist in an open democratic society, I do expect the courts to be impartial
and evaluate all arguments meticulously, and in my case recognise the real merit in my
sometimes complicated arguments. See annexures “MT 7” read with “MT 5”, “MT 6” and
“MT 17”.
[89]
85. I persist as follows: I do not want any privilege or discount in these proceedings, other than
justification as to why the 1stRespondent is allowed to charge exuberant fees and interest
on what in fact does not exist tangibility; and why I must give way to its property, a
guarantee in terms of the Constitution, which should stand above the might of the
1stRespondent profiteering/ unjust enrichment.
86. The actions of the 1stRespondent described supra amount to contravening of section 1 read
with section 78 of the Bank Act, which prescribes “undesirable practice”.
87. Forfeitures amounting to arbitrary deprivations of property should not occur where the
1stRespondent has more than doubled on its profits as would directly infringe upon the
rights to property in terms of the Constitution.
INFERENCE OF FIDUCIARY:
88. The Respondent owes me a duty to be treated honestly, to be informed of all material
matters before and during the existence of the contract and even thereafter; and not to
profit additionally from my transaction and security. When one person stands in relation to
another in a position of confidence involving a duty to protect the interests of that other
person, he or she is not allowed to make a secret profit at the other's expense, or to place
himself or herself in such a position that his or her interests conflict with his or her duty.
Such a claim may arise because of a breach of contract or in delict as the case was in
[90]
Daewoo Heavy Industries (SA) (Pty) Ltd v Banks [2004] 2 All SA 530 (C), 2004 865 (4)
SA 458 (C), Da Silva v CH Chemicals (Pty) Ltd [2009] 1 All SA 216 (SCA), 2008 (6) SA
866 620 (SCA).
89. To establish a breach of a fiduciary duty, I must allege facts from which the existence of
such a duty can be deduced. For instance, I can rely on the relationship between principal
and agent, of a guardian to a ward, director to a company or an attorney to a client or in
this instance, the 1stRespondent to me.
90. The scope and ambit of the duties imposed on the 1stRespondent, in this case the duties are
implied (duties that derive ex lege) and arise in the context of the contract that defines the
relationship between the parties.
91. Furthermore, the case of Slip Knot Investments 777 (Pty) Limited v Project Law Prop
(Pty) Limited and Others (36018/2009) [2011] ZAGPJHC 21 (1 April 2011). Has
particular reference to illustrate the Court’s approach to over-profiting. At paragraph 11 on
page 6 the Learned Judge sites Innes J finding in Reuter v Yates, as follows: “It comes to
this - in deciding whether the defence of usury has been sustained, and whether the lender
has taken such an undue advantage of the borrower, has so practised extortion and
oppression, that his conduct, being akin to fraud, disentitles him to relief, the Court will
examine all the circumstances of the case. It will not only look at the scale of interest
[91]
which has been stipulated for, but will have regard to the ordinary rate prevalent in similar
transactions, to the security offered and the risk run, to the length of time for which the
loan was given, the amount lent, and the relative positions of the parties.” Further, at
endnote 15 of page 9 of the Learned Judge, remarks “Since time immemorial, our common
law has set its face against exploitation in the levying of interest.” A most illuminating
discussion on this aspect can be found in an historical survey by Grové, Die
gemeenregtelikebeheer van woeker in die Suis-Afrikaanse Reg, De Jure, 1989 (22),
233and Die gemeenregtelikebeheer van woeker in die Suis-Afrikaanse 1027 Reg (vervolg),
De Jure, 1990 (23),118.”
92. A fiduciary relationship prevents an agent, in this instance the 1stRespondent, from
entering into any transaction that would cause my interests to clash with the
1stRespondent’s duty. For instance, an agent employed to buy cannot sell his or her own
property; an agent employed to sell cannot buy his or her own property. In addition the
agent cannot make any profit from his or her agency other than the agreed remuneration.
As the case was in Robinson v Randfontein Estates Gold Mining Co Ltd 1921 883 AD 168
180, Bellairs v Hodnetl1978 (1) SA 1109 (A) 1130F, Low v Shedden [2001] 2 All SA 884
171 (C) and Ganes v TelecornNarnibia Ltd [2004] 2 All SA 609 (SCA), 2004 (3) SA 615
885 (SCA).
[92]
93. Within these premises the 1stRespondent was duty bound in terms of the fiduciary
relationship that came into operation the moment I applied for a loan from the
1stRespondent, further to be confirmed by entering into a contract with the 1stRespondent
and this on-going relationship is confirmed by me making payment to the 1stRespondent.
94. If follows that the Respondent has seriously breached the fiduciary duty by misleading me
in the grounds so-set-out supra and therefore it is my right to bring civil action against the
Respondent, which I intend doing.
CONCLUSION:
95. The structures employed by the Respondent are at very least distrustful, designed for
failure as it has no tangibility or substance which can justify the exorbitant interest charged
against their ‘co-called’ loans.
96. The 1stRespondent acted with a predefined, predetermined set of actions prior to
concluding the agreement with me because laws relating to the conduct of their industry
allow for such conduct of profiteering to take place; and such actions are unassailable in
the courts where the courts seem to have acted as shields and guardians of such actions by
the 1st Respondent.
[93]
97. There exists no true competition among commercial banks where one can take your
business, as each one of these so-called competitors are just another extension of the
banking system whom hold the exclusive mandate to exchange nothing for liquid demands;
98. I had not mandated the Respondent to act, as it did in these premises, where its contention
is that liquid money is borrowed against liquid repayments. There could never exist
consensus or “meeting of the minds” between the parties given the facts aforesaid as what I
had envision and what the Respondent versioned are two very distinct and far apart things
that one cannot connect the two minds to agree;
99. Policies and guidance’s designed to protect the system from manipulation have been
infringed upon, with absolute disregarded for rights and obligations in terms of law. Rules
and public policy have been replaced with reckless profiteering.
100. The Respondent cannotclaim that it had the capacity to act, as it had no such means; The
Respondent had to use external manipulation processes along with elaborate and
complicated schemes that serve only to elicit the trust of an unsuspecting customer, that
enabled it to gain the capacity to act;
101. It is doubtful that the Respondent had acquired authority to act; that is that the Respondent
had acquired the rights and obligations prior to the loan agreement being brought into
existence, as the majority of the Respondent’s rights and obligations were only concluded
[94]
once security, surety and creditworthiness were given, sold-off, loaned against or
manipulated from nothingness, sheer simulations or illusions of physical value.
102. Furthermore, I interject that the processes followed by the 1stRespondent are in violation of
the Constitution as far as the Legislation, in particular The Bank Act, The South African
Reserve Bank Act and Policies concerning financial services rendered by the Respondent,
in so far the Bill of Rights, Section 25 are concerned.
PREJUDICE:
103. I have been materially prejudice as in the forgoing paragraphs to such extend that my
rights to represent myself have be interfered with, thus disallowing the audi alteram
partem rule;
104. The material facts of the process followed by the 1st Respondent and 2nd Respondent has
caused undue financial burdens in that interest charged on my home loan are in excessive
range and bridge just interest;
105. That the 1st Respondent had acted outside its mandate by utilising my security or debt to
gain additional income and/ or profit, thus, and in conjunction thereto had caused financial
hardship to me.
[95]
106. The 1st Respondent had in its proceedings relied on its contract of loan to shield it from
answering questions about how it generates funds.
107. That the 1st Respondent together with the 2nd Respondent and 3rd Respondent had elected
to, caused these actions of the 1st Respondent to take place with their explicit or negligent
or in the alternative, to have been knowable thereof or could have been knowledgeable
thereof, and had done nothing to protect me from such profiteering and financial prejudice.
108. The 3rd Respondent had failed to take appropriate remedial steps to prevent the 1st
Respondent and 2nd Respondent to act within the confines of law. In the alternative, to
advise the general public of the principle of money generation so it could ascertain
valuable input from the public regarding these types of transactions. This will include the
valuation of our South African Rand.
LEGISLATIVE BILL INTRODUCED:
109. The Honourable Court’s attention is drawn to annexure “MT 22”, page 896. In order to
fully address the aspects contained in this application I have included the Financial
Markets Bill, which will be brought into law once qualified. The importance of this bill is
that it addresses some of the aspects contained herein.
ERRORS IN LEGAL REASONING:
[96]
110. The 1st Respondent had address my defence as one where I have paid the debt and where I
refute the existence of the contract or its enforceability as per annexure “MT 1” page 16.
111. I reiterate here and refer the Honourable Court’s attention to my application for leave to
appeal with its notes, annexure “MT 2” and “MT 3” hereto. These points are my
contentions and not what the 1st Respondent’s notations are.
CONCLUSION AND REMEDIES:
112. These are per my prayers in the application for leave to appeal in the Court below; and
113. That where the Honourable Court finds inconstancies in the Law governing the 1st
Respondent and the 2nd Respondent, that it issues such declaration as requested hereunder;
and
114. The 1st Respondent, together with the 2nd Respondent if it contests this application, pay to
me an amount of R15 000’000.00 (fifteen million) in damages, general damages and
damages caused to my reputation; and
115. That the 1st Respondent, together with the 2nd Respondent if it contest this application, be
ordered to pay the cost of these proceedings.
[97]
LEAVE TO APPEAL:
116. The first prayer contained in the Notice of Motion to which this affidavit is annexed is for
leave to appeal to this Honourable Court against the Judgment. This prayer is justified and
in the interest of justice as per the facts and considerations set out under paragraph seven
above which, mutatis mutandis, is hereby incorporated by reference, so as not overburden
these papers.
DECLARATION OF UNCONSTITUTIONALITY:
117. In terms of section 172(1)(a) of the Constitution, a court considering a constitutional
matter within its power has no discretion but must declare any unconstitutional law invalid
to the extent of its inconsistency.
118. After having made the declaration of invalidity, a court may then, in terms of section
172(1)(b) of the Constitution, make any order that is just and equitable.
119. In terms of section 172(1)(a), therefore, I submit that this Honourable Court must, on the
basis of the reasons set out above, make an order declaring those parts of the acts,
regulations and/ or policy governing the economical and/ or financial markets which
infringe upon a individual or juristic person’s rights to be unlawful and invalid. This is the
fourth prayer contained in the aforesaid Notice of Motion.
[98]
120. In terms of section 172(1)(b) of the Constitution, should this Court find that the acts,
regulations and/ or policy governing the economical and/ or financial markets are
unconstitutional, it may grant me just and equitable relief.
121. I submit that the second and third prayers in the aforesaid Notice of Motion constitute such
relief, as should be granted by this Honourable Court.
REVIEW OF THE 1ST RESPONDENT'S DECISION:
122. If the relevant acts, regulations and/ or policy governing the economical and/ or financial
markets are unconstitutional, the 1stRespondent’s decision, which was based upon the
home loan agreement, is clearly unlawful and falls to be set aside in terms of the fourth
prayer in the aforesaid Notice of Motion.
123. I submit that, once the impugned are declared null and void, the remainder sections and
rules applicable to these proceedings reads well enough to enable the introduction of a bill
or amendment to such acts/ rules, as the case might be, to be submitted in a manner which
is akin to the procedures and under the same conditions applicable to bills/ amendments
introduced by a Cabinet member or a Deputy Minister.
[99]
COSTS:
124. The fifth and sixth prayers in the aforesaid Notice of Motion relates to an order for costs
against the 1st Respondent, with the prayer that such order be made even if this Honourable
Court dismisses my applications;
124.1 In respect of the costs of my applications before this Honourable Court; OR
124.2 Subordinately, in respect of the costs relating to the proceedings in Court below.
125. In support of this prayer, I make reference to;
125.1 The facts and considerations set out under Para 123 above which, mutatis mutandis,
are hereby incorporated by reference, so as not overburden these papers;
125.2 The Court below exercised its discretion in an arbitrary or capricious manner;
126. The criteria set out by this Honourable Court in at paragraphs 6 to 7 Chonco and Others v
President, RSA 2010 (6) BCLR 511 (CC), inter alia, with reference how “in constitutional
litigation [...] the way in which a costs order will hinder or advance constitutional justice”;
and
126.1 additional argument and reasons shall be submitted to this Honourable Court with
my ‘Heads of Argument’ and in oral argument.
[100]
CONCLUSIONS:
127. I submit that the aforesaid prayers are;
127.1 Consistent with my prayers in the Court below, and
127.2 Consonant with the interest of justice.
128. For the reasons set out above, I submit that I have made out a case for the relief contained
in the Notice of Motion to which this affidavit is annexed, and I pray for an order
incorporating its terms.
DATE ATMIDRAND, THIS 19th DAY OF APRIL 2012
__________________________ DEPONENT
I hereby certify that the deponent declares that the deponent knows and understands the contents
of this affidavit and that it is to the best of the deponent's knowledge both true and correct. This
affidavit was signed and sworn to before me at MIDRAND on this 19th day of APRIL 2012 and
that the Regulations contained in Government Notice R1258 of 21 July 1972, as amended, have
been complied with.
[101]
__________________________
COMMISSIONER OF OATHS
Name & Rank : …………………………………………………
Address : …………………………………………………
Telephone No. : …………………………………………………
TN THE SOUTH GAUTENG HIGH COURTO JOHANNESBURG(REPUBLIC OF SOUTH AFRICA)
CASE NO.: 201llB34O
In the matter between:
TELLINGER, MICHAL JULIUS APPLICANT
and
THE STANDARD BANK OF SOUTH PONDENT
sjI!
NOTICE OF APPLICATION TO GIVEWRTTTEN REASONS RULE 49(1XC)
BE PLEASED to take notice that the Plaintiff in the above case hereby requests that the
Honourable Judge M M MABESELE, hand to the Clerk of the Court a written jucigment in
respect of the trial of the above case that took place on 13 of MARCH 2012, which
judgment will form part of the record and must show:
the facts he found to be proved; and
his reasons for judgment.
DATED AT JOHANNESBURG ON THIS THE 14th DAY OF MARCHaOI2.
a)
b)
t1l
Annexure "MT A1" Page: 1
MR MICHEAL J TELLINGERThe Applicant
Cio BLAKES ATTORNEYS74 Oxford RoadCnr. 8th Avenue
SaxonworldTel: (011) 486 3225Fax: (0ll)48636A2
Ref: LP|MT/2112
AND TO:
TO:
BY THE COURT
DENEYS REITZ INCAttorney for Re spondent15 Aiice LaneSANDTON (preferred address) ORSuite l714,17th Floor Marble TowersCnr Jeppe & Von Weilligh StreetJohannesburgTel: (011) 685 8860Fax: (011) 301 3309Ref: A Moosajee/STD 1 0 1 57IAAM
THE REGISTRAR OF THE ABOVE HONOURABLE COURT,JOHANNESBURG
W
REGISTER
121
Annexure "MT A1" Page: 2
IN THE SOUTH GAUTENG HIGH COURT, JOHANNESBURG(REPUBLIC OF SOUTH AFRICA)
CASE NO.: 201lllT4a
In the matter between:
TELLINGER, MICHAL JULIUS APPLiCANT
and
THE STANDARD BANK OF SOUTH AFRICA LIMITED RESPONDENT
APPLICATION F'OR CERTIFIED COPIES OF COURT FILE
KINDLY prepare a certified copy of the Court File under case number 201111334.
THE Applicant in this matter tenders such cost for duplication and certification.
ALSO inform the Applicant in writing as to completion and cost via fax notification.
DATED AT JOIIANNESBURG ON THIS THE l4th DAY OF MARCH}OL2.
The ApplicantCio BLAKES ATTORNEYS
74 Oxford RoadCnr, 8th Avenue
SaxonworldTel: (01 l) 486 3225Fax: (01 l) 486 3602
Ref: LP/MT12/12
MR MICHEAL J TELLINGER
l1l
Annexure "MT A1" Page: 3