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[2016] ZAGPJHC 128
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Changing Tides 17 (Pty) Ltd N.O v Congwane (2015/94919) [2016] ZAGPJHC 128 (30 May 2016)
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GAUTENG
DIVISION, PRETORIA
CASE
NO: 2015/94919
DATE:
30 MAY 2016
In
the matter between:
CHANGING
TIDES 17 (PTY) LTD
N.O
...............................................................................
Applicant
And
CONGWANE,
KEFENTSE
MARTHA
..............................................................................
Respondent
JUDGMENT
SPILG,
J:
INTRODUCTION
1.
This is an application for default judgment in
which the plaintiff, described as Changing Tides 17 (Pty) Ltd N.O.
(‘
Changing Tides’
),
seeks a money judgment for the full outstanding balance owing on a
credit agreement signed by the defendant. It also seeks to
levy
execution on her residential property which was provided as security.
2.
As with most, if not all Changing Tides
applications of this nature, it is not based on a standard home loan
agreement concluded
by a financial institution as plaintiff directly
with a defendant credit receiver.
3.
To simplify the nature of the transactions
involved I will refer to the credit provider as the lender and the
credit receiver as
the borrower.
4.
Changing Tides is not the lender. The lender is
Blue Banner Securitisation Vehicle RC1 Proprietary Ltd, its
successors in title
and assigns (“
Blue
Banner).
The South African Home Loans
Guarantee Trust (formerly known as the Guarantee Trust) and which
will be referred to as “
The Trust”
stands as guarantor to Blue Banner for the
liability of the borrower, ie. the defendant, under the loan. In turn
the defendant indemnifies
the Trust and provides his or her immovable
property as security for due performance of its indemnity.
The
defendant accordingly continues to repay the monthly instalment under
the loan to Blue Banner. Changing Tides features as the
plaintiff
because it is the trustee “
for
the time being”
[1]
of
the Trust.
The
suite of agreements required to implement the immediate transaction
for the loan comprise the loan agreement between Blue Banner
and the
defendant, a guarantee given to Blue Banner by the Trust in respect
of the specific loan to the debtor on terms which are
contained in a
main or umbrella agreement, an indemnity given by the defendant to
the Trust and an indemnity bond provided by the
defendant over her
residential property. In all the agreements Changing Tides acts as
trustee for the Trust. It is evident therefore
that each agreement is
dependent on the other and forms an integral part of a larger
transaction.
5.
The
particulars of claim allege that both the Trust and Blue Banner are
credit providers under sections 40 and 45 of the National
Credit Act
34 of 2005
(“the
NCA”)
.
Changing Tides is not alleged to be a credit provider. I leave open
whether Changing Tides is a credit provider or whether it
is
necessary for Changing Tides to allege sufficient facts to show that
it is not. I did not raise the issue and will assume that
it is not
obliged to register as a credit provider.
[2]
THE
CAUSE OF ACTION
6.
Changing Tides in its capacity as trustee for the
Trust sues the defendant on the grounds set out below.
7.
It avers that on 31 March 2014 and in writing Blue
Banner as lender advanced to the defendant as borrower an amount of
R504 000
which was to be repaid together with interest and
finance charges in an amount of R5 060.42 per month over a
period of 20
years.
At
that time the total amount repayable inclusive of finance charges and
other costs was estimated to be R1214 501.28.
8.
The plaintiff alleges that, as an express
condition, the loan was to be guaranteed by the Trust and that an
indemnity bond acceptable
to the Trust and Blue Banner would be
registered over the defendant’s residential property in favour
of the Trust as security
for the indemnities the Trust was to provide
to Blue Banner.
9.
On 14 April 2014 the Trust issued written
guarantees in favour of Blue Banner in terms of which it was obliged
“
should the Lender so require it
(as the Lenders have in this case) to settle such guarantee
obligations by effecting recovery from
the Defendant in terms of the
indemnities as set out below and to pay over such sums to the
Lender”.
10.
A copy of the written Indemnity executed by the
Defendant in favour of the Trust and dated 31 March 2014 was attached
to the claim.
11.
It was alleged in the particulars that, in
terms of the indemnity, the defendant indemnified the Trust as a
“
separate and independent
primary obligation
from and
against any loss, cost, claim, expense or liability of any kind
incurred or to be incurred by the Trust as a result of
the Defendant
failing to duly pay and punctually perform any of his (
sic)
obligation under the loan and the
Trustee
is deemed to have
suffered a loss and incurred a liability as a result thereof equal to
the amount claimable by the Lender
”
(emphasis
added).
12.
Furthermore in terms of the indemnity the
defendant undertook to pay the amount due to the Trust on written
demand upon which the
Trust became entitled to enforce its rights
under the indemnity in its own name and on its own behalf.
13.
As security for her obligations to the Trust under
the indemnity the defendant authorised the registration of an
indemnity bond.
14.
It was a further term of the indemnity that the
amount of the defendant’s indebtedness could be proven ‘
prima
facie’
by “
a
Certificate signed by any Manager, Trustee or Accountant of the
Trust. It shall not be necessary to prove the identity and/or
appointment of the person signing such Certificate.”
The
certificate was attached. The material portions for present purposes
read;
‘
SA
Home Loans (Proprietary) Limited, … herein represented by
Mlamuli Jimmy Duma in his/her capacity as its duly authorised
representative) in its capacity as the duly appointed Manager of SA
Home Loans of South African Home Loans Guarantee Trust …
(‘the
Trust”) certifies that Ms Martha Congwana is indebted to the
Trust:
(then
follows the amounts)
Dated
at Durban on this the 29
th
day of July 2015
SA
HOME LOANS (PTY) LTD
(herein
represented by Mlamuli Jimmy Duma) in its
Capacity
as Manager of SA Home Loans of SOUTH
AFRICAN
HOME LOANS GUARANTEE TRUST…. “
15.
It is then alleged that the indemnity bond was
duly registered and that all the conditions to which the loan
agreement was subject
were timeously fulfilled and the Lender
performed all of its obligations.
16.
However it was stated that the defendant failed to
fulfil her obligations under the loan by falling into arrears, which
were R19 084.53
at 29 July 2015 and which remained unpaid
despite demand.
17.
Then follow allegations that a written notice
complying with section 129(1) (a) of the NCA was duly sent to the
address nominated
by the defendant in the indemnity and that the
defendant remains in default.
18.
The plaintiff also avers that as a result of the
defendant’s default the “
Trust
is subject to a lawful claim by the Lender requiring it to discharge
its guarantee obligations as alleged and in respect of
which the
defendant is now liable to it in the sum of R513 491.32 together
with interest from 15 July 2015 to date of final
payment and as
determined pursuant to a Certificate.”
The
certificate is the one mentioned earlier.
19.
It will become apparent that liability by the
defendant under the indemnity to the plaintiff is dependent on the
terms of the guarantee
provided by the plaintiff to Blue Banner. This
was not attached. At the hearing I requested it.
20.
The court was subsequently provided with a
document addressed to Blue Banner “
its
successors-in-title and assigns
”
headed
“
Guarantee”
which recorded that :
“
The
Trustee for the time being of the South African Home Loans Guarantee
Trust …(“Guarantor”) and Blue Banner
Securitisation Vehicle RC1 Proprietary Limited its
successors-in-title and assigns (“Creditor”) have entered
into
a Common Terms Agreement (“the Agreement”) dated 17
September 2001, as amended, novated and/or replaced from time to
time. In accordance with, and subject at all times to, the
terms of that Agreement, other than clauses 3.2, 3.4, 3.5 and
3.6
(which shall on execution hereof, form a part of and be deemed to be
incorporated herein), in consideration for the Debtor
referred to
below granting an Indemnity to, and registering an Indemnity Bond in
favour of, the Guarantor, and with effect from
the date of
registration of the relevant Indemnity Bond granted by the Debtor to
the Guarantor over the Property, the South African
Home Loans
Guarantee Trust hereby guarantees the due and punctual payment of all
sums which are now and which may subsequently
become due by the
Debtor referred to below to the Creditor pursuant to the Home
Loan Agreement entered into between the said
Debtor and the Creditor
as amended, novated and/or replaced from time to time.
Unless
the context requires otherwise, terms defined in the Agreement shall
bear the same meaning when used in this Guarantee.
Name
of Debtor:
Kefentse
Martha Congwana
Description
of Property: [Erf 2…… S…… T……]
Value
of bond to be registered: R570 000
Signed
at Pretoria on 14 April 2014.
for
or on behalf of The South African Home
Loan
Guarantee Trust”
21.
It is evident from this document that the full
terms of the guarantee were not furnished to the court. The material
terms are contained
in another document identified as The Common
Terms Agreement of 17 September 2001 and its amendments.
Accordingly
the court has no knowledge of the terms under which the Guarantee was
given, how the consideration was determined, whether
Blue Banner
called up the guarantee and if so in what amount
[3]
,
or what amount exactly would have to be paid by the Trust to Blue
Banner if the debtor defaulted.
In
this regard it should be borne in mind that it is not the lender who
is suing for either the arrears or the full accelerated
balance that
is outstanding under the loan agreement; it is the trustee of the
Trust suing in terms of the indemnity. Furthermore
it appears
that the indemnity in its terms does not state that the guaranteed
amount is equal to the liability of the borrower
to the lender. It
only refers to loss or liability and the like that has been or might
be incurred by the Trust, if the borrower
defaults, and which are
deemed equivalent to the amount claimable by the lender from the
Trust under the guarantee.
22.
The defendant’s liability to Changing Tides
is dependent on the indemnity. The entitlement to call up the
indemnity is dependent
on Blue Banner calling up the guarantee. In
its terms the indemnity is a separate primary obligation owed by the
borrower to the
Trust which is in addition to the obligation such
borrower continues to owe to the lender under the loan. This has
serious ramifications
for the borrower if the Trust or Changing Tides
(which is a separate juristic person) is wound-up or placed under
business rescue
after Changing Tides as plaintiff, has recovered its
claim from the defendant under the indemnity or has sold the
hypothecated
property in execution.
23.
Moreover Blue Banner holds itself out as a
securitisation vehicle while neither it nor the Trust is a bank since
they do not bear
the requisite title in their names nor do they
appear to be deposit taking institutions.
24.
The construction of the terms of the guarantee is
further cause for concern if regard is had to the disconnect between
the actual
amount that the Trust might be liable for under its
guarantee to the lender and the amount the borrower remains liable
for under
the extant loan agreement. It is not the usual form of
guarantee for the full amount, nor is the indemnity couched in
unequivocal
terms. It therefore appears that the guarantee given by
the Trust to Blue Banner is not necessarily coextensive with the
liability
the borrower incurred to the lender on default.
25.
Accordingly the Common Terms Agreement should have
been produced when requested by the court. The plaintiff has given no
explanation
as to why this was not done.
Moreover
if the plaintiff cannot rely on the deeming provision in the
indemnity then it will have to set out in its particulars
the actual
amount of liability owed by the Trust to Blue Banner and introduce
the necessary allegations regarding the calling up
of the guarantee
and the amount called up. The way it has currently pleaded is
equivocal and unacceptable
[4]
for the reasons set out later it cannot rely on the deeming
provision.
DEFENDANT’S
LIABILITY TO THE TRUST AND TO BLUE BANNER
26.
The Defendant can only be liable to Changing Tides
in respect of the liability that the Trust had undertaken as
guarantor for the
defendant’s obligations to Blue Banner.
27.
The
structure of the transaction separates the loan from the bond.
Furthermore the bond is not provided as security for the
loan owed to
Blue Banner but as security for the indemnity the borrower provides
to the Trust. It is therefore not accessory to
the principal
obligation owed by the borrower under the loan finance. It is
accessory to the indemnity. I did not invite plaintiff’s
counsel to address me on the consequences if the borrower, after
judgment but prior to a sale in execution is able to pay up the
arrears. Accordingly it is not an aspect that should be dealt with in
the absence of full argument and a consideration of section
90 of the
NCA against the full suite of agreements
[5]
.
28.
The transaction is one where Blue Banner appears
to have either factored its debtors’ book to the Trust and the
Trust holds
the bond, or the Trust is used as a special purpose
vehicle (SPV) to pool together or bundle the value of the loans into
tradable
securities which are then on-sold to institutional investors
in the capital markets.
29.
In consequence the amount that the Trust will be
obliged to pay Blue Banner under the guarantee will either be less
than the amount
under the loan agreement or the Trust will be
procuring a profit in trading the loan as part of a package, thereby
reducing its
own liability under the guarantee, which may or may not
be taken into account in the overall set-offs between Blue Banner and
the
Trust under the main or umbrella guarantee agreement.
30.
In short the court is left in the dark in a case
where at face value the original loan may have been traded and
therefore cannot
be produced. The court is also asked to be satisfied
with a deeming provision and a certificate relating to the actual
liability
owed by the Trust to the lender in circumstances where
there remains a full right of recourse by the original lender against
the
borrower (even after the bonded property is sold) for any
difference between the amount that the Trust is obliged to pay under
its guarantee to the lender on the one hand and the borrower’s
liability to the lender on the other.
Nowhere
do any of the agreements provided to the court indicate that a
payment by the Trust under the guarantee will discharge the
separate
debt owed by the borrower to the lender. This also appears unlikely
if regard is had to the way the transactions would
have to be
structured in order to facilitate securitisation.
31.
The indemnity agreement attempts to shore up the
discrepancy by reference to a deeming provision. I accept that this
position tries
to distil the commercial rational for the elaborate
loan structure and number of parties. Nonetheless a court would be
ignoring
the purpose of section 3 of the NCA if it turned a blind eye
to the risks inherent to the consumer where the actual terms of the
guarantee and the actual liability of the Trust to the lender are not
disclosed, but where the borrower remains potentially exposed
to the
lender directly.
32.
Securitisation has obvious advantages such as
potentially reducing the cost of credit and making loans more
accessible by spreading,
hedging or otherwise discounting risk. In
the article “
Note on the impact of
securitisation transactions”
co-authored
by N Gumata and J Mokoena, which was published in the South African
Reserve Bank’s quarterly bulletin of December
2005 at pp60-61,
four advantages were mentioned and explained:
1.
More efficient financing and profit
maximisation
. Securitisation may
be used to lower the firm’s weighted average cost of funds.
This is possible as highly rated debt can
be issued into capital
markets with strong investor demand driving down financing costs.
2.
Improved balance sheet structure and
financial ratios
. Securitisation
can enhance managerial control over the size and structure of a
firm’s balance sheet. For example accounting
de-recognition of
assets (i.e. removal from the balance sheet) can improve gearing
ratios as well as other measures of economic
performance such as
return on equity, and in a banking environment can also curtail costs
attached to bank intermediation such
as those arising from cash
reserve requirements.
3.
Improved risk management
.
Securitisation often reduces funding risk by diversifying sources of
funds. Financial institutions also use securitisation to
eliminate
interest rate mismatches.
4.
Lower economic and regulatory capital
requirements
. Securitisation
also releases capital for other investment opportunities. This may
generate economic gains if external borrowing
sources are
constrained, or if there are differences between internal and
external financing costs.
33.
The article identified two types of
securitisation; traditional and synthetic. These are described as
follows at p60:
“
A
traditional securitisation scheme involves the legal and economic
transfer of assets to a special-purpose vehicle (SPV) issuing
asset-backed securities that are claims against a specific asset
pool. In such a scheme, different classes of asset-backed securities
may be issued, and each class has a different priority claim on the
cash flows originating from the underlying pool of assets.
Under a
traditional securitisation scheme a true sale takes place and all
rights and obligations are transferred to the SPV. This
is the type
of securitisation scheme that typically affects the measurement of
the bank credit aggregates.
A
synthetic securitisation scheme, on the other hand, refers to a
structured transaction whereby an institution uses a portfolio
of
credit derivative instruments to tranche and transfer the credit risk
and/or market risk associated with a specified pool of
assets to the
SPV. The resulting credit exposures have different levels of
seniority. Under a synthetic securitisation scheme,
the underlying
assets are not necessarily moved off the originator’s balance
sheet”
34.
.
There are however some significant downsides for the consumer. The
one surfaced in
Changing
Tides 17 (Pty) Ltd NO v Vitex Investments 878 CC and Another
)
[2012] ZAGPJHC 273 where Dodson AJ found that a purported
counter-claim against the Trust, based on its failure to provide the
full finance required as allegedly undertaken, could not be sustained
against Changing Tides since it was claiming on the indemnity
in
respect of the portion of finance actually provided by it through
Blue Banner (which the defendant alleged represented only
30% of the
finance the Trust had undertaken to provide)
[6]
.
Irrespective of the merits of the defence raised, it exposes the
difficulty that the borrower may not have recourse against either
the
Trust or the lender when sued on the indemnity (leaving aside that
Changing Tides claims to be the trustee for the Trust).
35.
The facts of
Vitex
also suggest the potentially opaque
nature of the transactions since only the loan agreement and the
indemnity are provided although,
on the allegations made, the Trust
itself appeared to be the borrower’s first point of contact
before the suite of agreements
were structured to facilitate both the
loan and its securitisation.
Vitex
also brings into focus whether Changing
Tides is an associated company for the purposes of sections 40(1) to
(3) of the NCA.
36.
Another
potential disadvantage is that the borrower remains exposed to the
lender since the indemnity agreement is a “
separate
and independent primary obligation”
(see
earlier) with no comfort being given to the borrower that payment to
Changing Tides under the indemnity agreement will extinguish
the
borrowers debt to the lender
[7]
.
37.
This puts the borrower in jeopardy should Changing
Tides or the Trust be placed under winding up or business rescue.
Moreover the
Trust may replace Changing Tides as the trustee if
regard is had to the wording of the Guarantee.
38.
Accordingly
while there may be sound commercial advantages to securitise and its
features may promote the broader availability of
loans, which is one
of the objectives of the NCA
[8]
,
it raises concerns in respect of the deeming provision contained in
the Indemnity. In particular it appears to manifest an imbalance
in
negotiating power (see section 3(e) of the NCA), it may
adversely impact on one of the other objects of the NCA (see section
90(2)(a)(i)), it may have the effect of waiving or defeating the
borrower’s rights under the NCA or the common law (under
sections 90(2)(b) and (c)) and, in light of the facts in
Vitex
,
the deeming provision may have the effect of limiting the liability
of both credit providers’ for any representation made
on their
behalf under section 90(2)(g).
39.
In
the present case it would be remiss of the court to ignore these
issues, especially if regard is had to the duty imposed on it
under
section 90(4) of the NCA
[9]
.
40.
It
is therefore necessary that the relevant terms of the Common Terms
Agreement and its variations are pleaded and attached. The
deeming
provision cannot act as the palliative. Aside from appearing to run
counter to the basic tenets of the NCA it may
also offend
sections 48(1)(c )(i),(2)(a) (b) and (d) of the
Consumer Protection
Act 68 of 2008
[10]
41.
For the same reason it is necessary that the
actual liability incurred by the Trust to Blue Banner is suitably
alleged and demonstrated.
THE
CERTIFICATE
42.
Duma signed the certificate. He is also the
deponent to the affidavit in support of default judgment. Duma claims
in the affidavit
that in his capacity as supervisor at SA Home Loans
(Pty) Ltd he has possession or control of Changing Tides’
files, documents,
statement of account and the like relating to the
action instituted against the defendant. Duma also states that, in
particular,
he examined electronic copies of the defendant’s
application for finance and supporting documents, the indemnity bond,
contemporaneous
notes of Changing Tides’ staff together with
system generated remarks concerning the conduct of the defendant’s
account
with Changing Tides and detailed statements of account
recording each debit and credit as well as a running record of “
the
outstanding balance due by the defendant’s
(sic)
from time to time and the defendant’s
arrears”
.
43.
It is difficult to appreciate how anyone could
have a record of the conduct of the defendant’s account with
Changing Tides,
since the defendant conducted its account with Blue
Banner. Moreover the defendant’s liability to Changing Tides is
dependent
on the amount which the Trust reflects as owed by the
defendant to it under the guarantee.
44.
Duma makes the position worse when later in the
affidavit he states:
18.
The defendant obtained the loan referred to in the Summons from the
Plaintiff in order to acquire and/or improve the immovable
property…..
45.
Aside
from the loan not being obtained from Changing Tides another
glaringly incorrect statement made by Duma under oath is
that
the summons seeks judgment against “
the
First and Second Defendants, jointly and severally, the one paying
the other to be absolved for the relief claimed …”
[11]
.
There is no surety sued.
46.
It is evident that Duma could not have made these
averments if he had examined the relevant records. Moreover it is
evident that
as a supervisor he has not been made privy to the basis
of the transactions pursuant to which the defendant is sought to be
held
liable to Changing Tides. Aside from this, the fact that Duma
believed that a surety was being sued after having regard to the
documents he professes to have examined for the purposes of default
judgment also demonstrates his lack of direct access to the
actual
files and overall records or lack of diligence in the function he was
performing.
47.
These factors militate against the court accepting
the veracity of the certificate of indebtedness for purposes of
constituting
prima facie
evidence
of the outstanding amount. and it declines to do so. See generally
Senekal v Trust Bank of Africa Ltd
1978
(3) SA 375
(A) at 383A-C.
48.
This finding makes it unnecessary to consider
whether the decision by Dodson AJ in
Vitex
at paras 22 to 24 is clearly wrong. In
that case it was held that the reference in the indemnity to the
certificate being signed
by a “
manager,
trustee or accountant
”
did not
necessarily refer
to
a
natural person. The reason given was that counsel could not point to
any textual basis for such an interpretation other than the
maxim
noscitur a sociis.
49.
Nonetheless
I have certain difficulties with the decision. The history of
certificates finds its origin in the acceptance that a
natural person
holding a senior position at a bank or other financial institution
would, by reason of such position, understand
the transaction in
question and have access to the banks records. This would render the
certificate reliable both as to the nature
of the liability and its
amount
[12]
. The certificate of
indebtedness clause in the indemnity uses the terms “
manager”
,
“
trustee
”
and
“
accountant”
which
are consistent with a person who has adequate insight into the nature
of the transactions even though he or she may not have
personally
dealt with the account. The next sentence in the clause (see
para 14 above) also indicates that the reference
in the first
sentence to the certificate being “
signed”
means
signed by an individual.
50.
In my view the defendant when contracting could
not have envisaged anyone employed by the managing company (whatever
that might
mean in the present context) or firm of accountants being
able to sign the certificate. If that were so then a typist who might
have access to the account on her screen or even an office cleaner
can sign the certificate if employed at the time by the Management
Company or firm of accountants.
It
could never have been the common intention of the parties that in
cases such as this, where the loan has obviously been securitised,
a
person can sign a certificate when he or she does not have a
sufficient understanding of the transaction to know which files
or
transactional records are relevant. The reliability of the person
scrutinising the records in order to sign a certificate is
the
underlying consideration for the clause, and the only qualifier found
in the clause is that the individual signing is someone
who holds the
position of manager, trustee or accountant. At the least, the
clause is ambiguous and the
contra
proferentem
rule supported by an
interpretation that gives effect to the underlying protection that
the NCA is intended to afford consumers
ought to prevail.
ORDER
51.
In making this order I do not suggest that the
claim is free from any other defects. On the contrary I have alluded
to some possible
issues. I therefore do not intend this order to
limit the hands of another court.
52.
The following order covers only those issues I
have expressly decided upon.
1.
The plaintiff must amend its particulars of claim
in accordance with the
ratio
of
this judgment, which includes setting out;
a.
the necessary allegations regarding the terms of
the guarantee identified as the Common Terms Agreement (with relevant
variations
if any) to afford the plaintiff a cause of action against
the defendant based on such guarantees together with a copy thereof
and
any relevant amendments;
b.
the necessary allegations by reference to the
Common Terms Agreement (and amendments if applicable) regarding when
and in what amount
the guarantee was called up by Blue Banner;
c.
precisely how the present amount outstanding is
calculated;
2.
The amendment together with a copy of this
judgment is to be served on the defendant personally through the
sheriff by way of a
covering notice affording her 15 days within
which to oppose the summons as amended;
3.
Unless there is a notice of opposition the
plaintiff may subsequently enrol the application again for default
judgment provided
an affidavit for default judgment is deposed
to by a person who is suitably qualified and who can swear positively
to the
facts;
4.
No costs are claimable against the defendant,
whether directly or indirectly through debiting her account or
otherwise, arising
from the proceedings as from the date of taking
instructions to institute proceedings up to and including the
delivery of this
judgment; the effect being that costs are only
claimable upon the drafting of the particulars of claim in the
amended form as directed
by this judgment.
SPILG
J
DATE
OF JUDGMENT: 30 May 2016
FOR
PLAINTIFF: Advocate – not noted
Strauss
Daly Inc.
FOR
DEFENDANT: No appearance
[1]
This
is the manner in which the guarantor is described in the Guarantee
dated 14 April 2014. See below.
[2]
In
terms of the
section 1
definition, a credit provider “
in
respect of a credit agreement to which this Act applies, means-
…
.
(i)
any other person who acquires the rights of a
credit provider under a credit agreement after it has been entered
into;
See
also section 8 regarding what constitutes a credit agreement and
section 40 regarding the registration of credit providers
and the
reference to associated companies.
[3]
The allegation found in para 14 of the particulars is inadequate. It
is simply a conclusion which in addition is couched in equivocal
terms and reads: “
As
a result of the Defendant’s failure referred to above, the
Trust is subject to a lawful claim by the Lender requiring
it to
discharge its guarantee obligations as alleged and in respect of
which the Defendant is now liable to it in the sum of
R…. and
as determined pursuant to a Certificate as
particularised
below.”
It should be
mentioned that the Certificate does not purport to determine how the
liability arises. It simply states that the
defendant “
is
indebted to the Trust (
then follows the amount and the
rate of interest claimed on that amount until payment is effected)
which indebtedness is presently owing, due and payable”
[4]
The
allegation is that there is “
a
lawful claim by the lender requiring it to discharge its guarantee
obligations”
.
This fails to indicate with sufficient clarity whether the reference
is to the term in the guarantee creating the obligation
or an actual
demand made, in which case it should have clearly pleaded this
[5]
See sections 290(3) and (4) of NCA. Section 129(4) (b) was applied
in
Firstrand
Bank Ltd v Nkata
2015
(4) SA 417
(SCA) at para 44
[6]
Changing
Tides v Vitex
art
paras 7-11
[7]
The
loan agreement and indemnity do not contain such a provision. Nor
does the guarantee handed up (although the defendant would
not be a
party to that agreement).
[8]
See
section 3 of NCA
[9]
Section 90 (4):
In any matter
before it respecting a credit agreement that contains a provision
contemplated in subsection (2), the court must-
(a) sever
that unlawful provision from the agreement, or alter it to the
extent required to render it lawful, if it is reasonable
to do so
having regard to the agreement as a whole; or
(b) declare
the entire agreement unlawful as from the date that the agreement,
or amended agreement, took effect,
[10]
Section 48 of the CPA:
Unfair,
unreasonable or unjust contract terms
(1)
A
supplier must not-
(c) require a
consumer, or other person to whom any goods or services are supplied
at the direction of the consumer-
(i) to waive
any rights;
(2) Without
limiting the generality of subsection (1), a transaction or
agreement, a term or condition of a transaction or agreement,
or a
notice to which a term or condition is purportedly subject, is
unfair, unreasonable or unjust if-
(a) it is
excessively one-sided in favour of any person other than the
consumer or other person to whom goods or services are
to be
supplied;
(b) the terms
of the transaction or agreement are so adverse to the consumer as to
be inequitable;
…
or
(d) the
transaction or agreement was subject to a term or condition, or a
notice to a consumer contemplated in section 49 (1),
and-
(i) the term,
condition or notice is unfair, unreasonable, unjust or
unconscionable; or
(ii) the
fact, nature and effect of that term, condition or notice was not
drawn to the attention of the consumer in a manner
that satisfied
the applicable requirements of section 49.
[11]
See
para 12 of the affidavit
[12]
See
Senekal
and
the cases referred to. Compare the summary judgment cases which
dealt with who could “swear positively to the facts”
such as
Maharaj
v. Barclays National Bank Ltd
1976
(1) SA 418
(AD),
Barclays
National Bank Ltd. v. Love
,
1975 (2) SA 514
(D) and more recently
Rees
and another v Investec Bank Ltd
2014
(4) SA 220
(SCA)