Page 39 - Litigating Land and Housing in South Africa: Lessons and Reflections

pay rent or or buy the the the properties back from them The Constitutional Court order declaring the the the Brusson agreements invalid and and unenforceable put a a a a a a a a a a a stop to to to this practice and and relieved the the victims from having to to to to pay the the investors 4 4 1 4 4 Strategy successes and failures
4 4 1 1 4 4 1 1 Working with the banks
The remaining Brusson cases are dealt with on on on an an an individual individual basis and and require considerable time and and human resources Clients must must be be consulted individually as as as as each case case is is is unique and and must must be be handled separately This has delayed the the finalisation of the the cases Given the the the the the extent of of of the the the the the Brusson Brusson scheme and the the the the the number of of of people affected – it it it it was initially decided that it it it it would be be be be appropriate to bring a a a a a a a a a a a a a a a a a a a a a class action on on on on on on on on behalf of of of the the the the the Brusson Brusson victims The Constitutional Court in in in in the the the the the Moore case case however made it it it it it it clear that each each case case case rested on on on on on on on on on its its its own own facts and and must be be be decided on on on on on on on on on its its its own own merits That resulted in in in in in in fin the LRC having to to bring each each case case separately requiring considerable human and and financial resources to to run litigation of this nature To mitigate the the delays that would be caused by launching each case individually the the the LRC strategi- cally began approaching the the banks
that had granted investors mortgage bonds The goal was to to resolve the the the disputes through alternative dispute dispute resolution (ADR) This allowed for the the the the the LRC to to to work together with the the the the banks
banks
instead of having to to to oppose the the the the banks
banks
in in in 4 4 1 4 4 2 Settlements with investors each application This has been a a a a a a a a a successful strategy with with banks
sharing information with with the LRC’s offices to to complete applications applications and one bank bank providing additional legal assistance to to to move applications applications applications All banks
have agreed not to to oppose the the the applications applications if the the the mortgage bond becomes an an an an unsecured loan and the the the the default judgment is upheld against the investors In each case a a a a a a a a a a a a a a different investor investor applied for a a a a a a a a a a a a a a mortgage bond over over the the the the the the property and their names were recorded on on on the the the the the the the the the title deed It became clear after the the the the the the the the the Brusson scheme scheme was uncovered that some of of the the the the the the the the the investors knew about the the the the the the the the the scheme scheme while others were completely unaware of of of of the the the the the the the the the the the the fraud perpetrated Whilst the the the the the the the the the the the the LRC has succeeded in in in in settling some some of of of of the the the the the the the the the the matters with the the the the the the the the the the investors investors some some of of of of them argue that they are are not liable for the the the the the the the the the the unsecured mortgage bonds and were were also victims of of of of of the the the the the the the the the the the scheme Many investors investors have appointed the the the the the the the the the the the same attorney who opposes applications on on on on on on the the the the the the the the basis that that they were were unaware of of of of the the the the the the the the illegality of of of of Brusson’s operations However due to to to to the the the the the the the the precedent set in in in in in the the the the the the the the the the Constitutional Court this argument is is is is is is frivolous A larger issue is is is is is is that that that many of of of the the the the the the the the the the investors have died leaving attorneys who represent the the the the the the the the the deceased estates to to to oppose the the the the the the the the the applications The reason for the the the the the the the the the opposition is is is is is is that that the the the the the the the the the unsecured mortgage bond makes the the the the the the the estate estate insolvent Though they will not be successful this does frustrate the the the the the the the process and causes delays LITIGATING LAND AND AND AND HOUSING IN IN IN SOUTH AFRICA  LESSONS AND AND AND REFLECTIONS
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