A and B were married to each other in community of property. Whilst married, the parties purchased a property subject to obtaining approval from the Bank.

A few years later, B instituted divorce proceedings against A. The two entered into a settlement agreement, which was made an Order of Court.

The terms of the said agreement were as follows:

• B shall retain the immovable property known as ERF 1234 RIEBEECKSTAD EXTENSION 1, registered in terms of transfer deed T 123/2017.
• The parties place on record that there is a bond registered over such property by the Bank. B will apply to the aforesaid bank to substitute A as mortgagor in terms of the aforesaid bond.

A vacated the property. B could no longer afford the monthly instalments. The amount in arrears was R 76 231.90 (Seventy Six Thousand Two Hundred and Thirty One Rand and Ninety Cents).

The Bank issued summons against A and B. A defended the matter and raised the following as a defence:

1. She did not receive the section 129 i.t.o National Credit Act 34 of 2005, and
2. She filed a complaint with the Ombudsman.

After the plea was filed, the Bank brought an application for summary judgement.

The basis of the above application was the following;

• The agreement was entered into, between A, B and the Bank,
• The Bank took into account the affordability of both parties,
• B did not apply to substitute A as debtor,
• The home loan agreement was still binding on the parties,
• The legal principle of res inter alios actaapplies.

The Court found that the Bank complied with section 129 of the NCA and that the finding of the Ombudsman was in line with the law.

What does Res inter alios acta mean?

This common law doctrine, as applied to contracts, means that the rights of a person who is not a party to the contract cannot be adversely affected. 

Do not forget that when you enter into a settlement agreement with your former spouse, you are not automatically absolved from liability, unless your former spouse applies for a substitution and obtains consent from the Bank.