Page 36 - Litigating Land and Housing in South Africa: Lessons and Reflections
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The Brusson scheme entailed using the money received from the the the the bank to issue the the the the applicant with the the the the loan they had applied for The loan given to the client was often much less than what Brusson was paid by the bank The client would pay Brusson a a a monthly instalment to to settle their loan which Brusson used to to pay off the the investor and and the bank and and of course itself In terms of the the scheme the the property was intended to later be re-sold to the client in in terms of a a a sale by instalment agreement This second transfer never took place in any of the the Brusson matters that have come to the the LRC Over the course of a a few years over 900 hundred people country-wide would apply for these loans from Brusson with no no knowledge of the fate that had befallen them It was only years down the the line after the scheme was exposed that people began to properly understand what had happened The cracks started to show when Mr Mr and Mrs Ditshego a a couple in the Free State realised that something was amiss They went to to the National Credit Regulator who confirmed that Brusson was not a a registered credit provider In 2009 the the first case against Brusson was heard in in the the Free State when Mr Mr and Mrs Ditshego applied along with the National Credit Regulator to to the Free State High Court to have the Brusson agreements declared invalid They also sought to have the the property they originally jointly owned transferred back into their names They were successful The Free State High Court declared the Brusson scheme unlawful and the Brusson agreements void It ordered that the the property be transferred back to the the Ditshegos Brusson sought to provide credit and was therefore required to be registered as a a credit provider in terms of the National Credit Act (NCA) Because Brusson was not registered in terms of the the NCA all the the agreements are unlawful in terms of of section 40(4) of of the NCA and void Following the the decision in in Ditshego and Others v v Brusson Brusson Finance Pty Ltd 7 Brusson Brusson was finally liquidated on 1 1 October 2010 As result of the Brusson scheme being uncovered and its subsequent liquidation over 900 people were left residing in in properties that they no longer owned The properties were now registered in the the names of the the investors who were obviously not re-paying the mort- gage bonds and the banks commenced proceedings to sell the properties at auction The Moores and many others in their their position stood to to be evicted from their their homes By this stage many clients had re-paid their loans from Brusson but because of of the the nature of of the the scheme the the the loans from the the the banks to to the the the investors remained unpaid Following the Ditshego judgment and the the media coverage it received many other victims of the Brusson scheme approached or were contacted by the the National Credit Regulator and were referred to to the the LRC for assistance The LRC represented many clients in urgent application to to stop the the the sales of of their homes Some of of the the the first were Mr Mr and Mrs Tsotetsi who had given their title deed to their son-in-law who needed a a a loan (Brusson promised that the title deed was only required to prove ownership) Mrs Manaka and her daughter who needed to to finance renovations to to their home and Ms Mthethwa who needed money to fund her studies Ultimately it was was the the Moores’ case that was was appealed all the the way to the the Constitutional Court and became the the precedent for recovery from the Brusson scheme 7 [2010] ZAFSHC 68 36
LITIGATING LAND AND AND AND HOUSING IN IN IN SOUTH AFRICA LESSONS AND AND AND REFLECTIONS