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[2010] ZAGPJHC 10
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Standard Bank of South Africa Limited v Rockhill and Another (09/56251) [2010] ZAGPJHC 10; 2010 (5) SA 252 (GSJ) (11 March 2010)
IN THE
SOUTH
GAUTENG HIGH COURT OF SOUTH AFRICA
(
JOHANNESBURG)
CASE NO:
09/56251
In the matter between:
THE STANDARD BANK
OF SOUTH AFRICA L
IMITED Plaintiff
and
ROCKHILL, RAYMOND
ANTHONY First Defendant
VAN HEERDEN, CHRISTINA CATHARINA
Second Defendant
_________________________________________________________________________
JUDGMENT
_________________________________________________________________________
EPSTEIN AJ:
[1]
The
plaintiff, a credit provider registered in terms of
section 40
of the
National Credit Act, no. 34 of 2005
(“
the
NCA
”),
applies for summary judgment against the first and second defendants
for payment of the sum of R1 646 815.09 which amount
is alleged to be
the balance of the principal debt together with finance charges due
and owing in respect of monies lent and advanced
by the plaintiff to
the defendants. The amount is secured by a mortgage bond, a copy of
which is attached to the plaintiff’s
summons. The aforesaid
amount is alleged to be due and payable by reason of the failure of
the defendants, notwithstanding demand,
to pay punctually the
instalments as provided for in the mortgage bond. The plaintiff also
seeks interest, an order declaring the
immovable property mortgaged
executable, and attorney and client costs.
[
2]
Sections
129
and
130
of the NCA, which must be read together, are central to
the application for summary judgment. The following subsections are
relevant:
129
Required Procedures before debt
enforcement
(1)
If the consumer is
in default under a credit agreement, the credit provider –
(a) may draw the default to the notice of the consumer in writing and
propose that the consumer refer the Credit Agreement to a
debt
councilor, alternative dispute resolution agent, consumer court or
ombud with jurisdiction, with the intent that the parties
resolve any
dispute under the agreement or develop or agree on a plan to bring
the payments under the agreement up to date; and
(b) subject to
section 130
(2), may not commence any legal
proceedings to enforce the agreement before -
i) first providing notice to the consumer as
contemplated in paragraph (a), or in
section 86
(10), as the case may
be; and
(ii) meeting any further requirements set out in
section 130.
(2) ………
1.2
7cm; margin-bottom: 0cm; line-height: 200%">
130.
Debt procedures
in a Court
(1) Subject to subsection (2), a credit provider may approach the
court for an order to enforce a credit agreement only if, at
that
time, the consumer is in default and has been in default under that
credit agreement for at least 20 business days and -
(a) at least 10 business days
have
elapsed since the credit provider delivered a notice to the consumer
as contemplated in
section 86(9)
, or
section 129
(1), as the case may
be;
(b) in the case of a notice contemplated in
section 129
(1), the
consumer has –
(i) not responded to that notice; or
(ii) responded to the notice by rejecting the credit provider’s
proposals; and
(c) in the case of an instalment agreement,
secured loan, or lease, the consumer has not surrendered the relevant
property to the
credit provider as contemplated in
section 127
.
1
(2) ……..
[3] The transaction
between the plaintiff and the defendants giving rise to the claim is
governed by the NCA. The plaintiff has
alleged compliance with
section 129
of the NCA and in support thereof attaches copies of
letters dated 25 November 2009 sent to the defendants, as well as the
respective
registered slips as proof of posting. The plaintiff
alleges that the defendants have been in default for more than 20
business
days as contemplated in
section 130
of the NCA, and that 10
business days have lapsed since the date of posting of the
section
129
notices. Summons was issued on 17 December 2009 and served on
the defendants on 21 December 2009.
[
4] In
the affidavit resisting summary judgment the defendants dispute that
the plaintiff has complied with
section 129
of the NCA and aver that
by virtue of the non-compliance the plaintiff was precluded from
commencing these legal proceedings. The
Defendant states that they
did not receive the
section 129
letters which were sent by registered
post.
[5]
Section 129
requires the credit provider to
draw
the default to the notice of the consumer in writing
.
Although
section 129
does not state how this must be done,
section
130
provides the answer by referring to 10 days having elapsed since
the credit provider
delivered
the notice to the consumer. The word
deliver
is not defined in the NCA itself
2
but there is a definition in the Regulations.
3
The Regulations
4
contain the following definition
5
:
‘
delivered
’
unless otherwise provided for, means sending a document by hand, by
fax, by e-mail, or registered mail to an address chosen
in the
agreement by the proposed recipient, if no such address is available,
the recipient’s registered address._ _ _
Section 129(1)(a)
does not require the consumer to receive the notice. The credit
provider discharges its obligation of delivering
the notice by
sending it to the postal address selected by the consumer.
Munien
vs BMW Financial Services (SA) (Pty) Ltd and Another
6
[
6]
Ordinarily,
if
regard were had only to the provisions of the NCA, there would have
been compliance with the prerequisites stipulated in section
129 read
with section 130, and the plaintiff would have been entitled to
approach this Court for a order to enforce its claim.
However, the
defendants have drawn attention to clause 14.3 of the mortgage bond
and clause 33.2 of the “
Terms
and conditions of loans secured by mortgage bonds”.
These
clauses are in identical terms (save that the latter refers to
Borrower
instead of
Mortgagor
).
The clauses both read as follows:
The Mortgagor (Borrower)
chooses
the postal address set out below as the address to which letters,
statements and notices may be delivered, and the Mortgagor
(Borrower)
accepts that any letters and notices posted to this address by the
Bank by registered post will be regarded as having
been received
within 14 (fourteen) days after posting:……...
What follows both
clauses is an address (
post
box number) to which address the letters were sent.
[7] The defendants
argue that by virtue of the aforementioned contractual provision in
the mortgage bond, the 10 business days provided
for in section
130(1)(a) would only commence after the 14
th
day from the date of posting of the section 129 letters. If this
contention is correct, the plaintiff has, in terms of section
130,
approached the court prematurely.
[
8] The
defendants contend that the parties by agreement selected the time by
when any notice would be deemed to have been received
by the
borrower, and that the plaintiff should be held bound by its
agreement. On the other hand, it was argued on behalf of the
plaintiff that in terms of section 90(2)(b)(iii) of the NCA, a
provision of a credit agreement is unlawful if it directly or
indirectly
purports to set aside or override the effect of any
provision of the Act.
[
9] When
construing a statute a court is entitled to have regard not only to
the language of the legislature but also to its objects
and purpose
which may be gleaned from the wider contextual considerations, the
history of the legislation and circumstances applicable
to the
subject matter.
Principal
Immigration Officer v Hawabu And Another.
7
[10] “
The
purpose of the NCA is explicitly stated in section 3:
The purposes of this Act
is
to promote and advance the social and economic welfare of South
Africans, promote a fair, transparent, competitive, sustainable,
responsible, efficient, effective and accessible credit market and
industry, and to protect consumers by - …..”
Section 3 then sets out how these
purposes are to be achieved.
[1
1] The
preamble to the NCA also indicates its purpose:
“
To promote a fair and non-discriminatory
market place for access to consumer credit and for that purpose to
provide for the general
regulation of consumer credit and improved
standards of consumer information; _ _ _; to promote responsible
credit granting and
use and for that purpose to prohibit reckless
credit granting
;
….”
[1
2]
J.M.
Otto, in Guide to the
National Credit Act
states
the following in the Introduction to the first chapter
8
:
“
Legislation protecting debtors in various
ways is an international phenomenon….. .
Some legislation may aim at protecting what are
popularly called ‘consumers’, while other legislation may
have a wider
field of application. A ‘consumer’ in this
context is normally an individual or a small jurisdic person, and the
legislation
usually covers contracts up to a certain amount of debt
extended by the creditor, which maximum amount serves as a ceiling
for
the legislation
’s field of
application. Credit extended above this amount is no longer regarded
as consumer credit and it is left to the
parties to determine their
relationship and their contract, subject to the rules of the common
law only
. _
_ _”
[1
3] Clearly,
the NCA has as its primary purpose the protection of consumers and it
sets a minimum standard for protection. However,
this does not
preclude parties from incorporating into their agreements additional
protection for the consumer. Such protection,
as in the present case
where an extended period by which notices are deemed to have been
received is afforded to the borrowers,
is not repulsive to the
general purpose of the NCA. It cannot be said that it overrides the
effect of
section 129
read with
section 130.
The effect of these
sections is to draw the default to the attention of the consumer and
to propose to the consumer alternative
methods of dealing with his or
her default. Affording the consumer more time than provided for in
the NCA does not defeat the objects
of the Act, nor the intention of
the legislature.
[1
4]
Section
130
is clearly concerned with specifying the least number of days
which must have elapsed before a credit provider may approach the
court; the section is not concerned with where a consumer in default
has been afforded more than the minimum period. The interpretation
which has been given to these sections is that notice is deemed to
have been received on the day on which it is sent.
9
Nevertheless,
sections 129
and
130
do not forbid the parties from
agreeing that a notice despatched in terms of the NCA will only be
deemed to have been received
14 days after its posting. The
law-giver’s purpose is not defeated by the parties’
agreement
in
casu
and the agreement cannot be stated to be in conflict with the
sections.
[1
5] Effect
must be given to the parties’ agreement which is valid, binding
and lawful -
pacta
sunt servanda
.
In the premises, the notices are deemed to have been received 14 days
after they were posted. The
10
business days
provided for in
section 130(1)(a)
had therefore not elapsed by the
time the summons in this matter was issued. The action was therefore
premature.
[1
6] The
remaining issue is whether the non-compliance by the plaintiff with
its obligation in terms of
section 129
of the NCA affords the
defendants a defence to the application for summary judgment
entitling them to be granted leave to defend.
In
Standard
Bank of South Africa Ltd vs Van Vuuren
10
,
the court found that a defendant in an application for summary
judgment had raised a
bona
fide
defence when it was established that there was not proper compliance
with
section 129.
The defendant in that case was granted leave to
defend. However, the Court did not deal with the provisions of
subsections 130
(3) and 130 (4) of the NCA. The relevant portions of
these sections read as follows:
“
130
(3)
Despite any
provision of law or contract to the contrary, in any proceedings
commenced in a court in respect of a credit agreement
to which this
Act applies, the court may determine the matter only if the court is
satisfied that –
(
a) in the case of
proceedings to which
sections 127
,
129
or
131
apply, the procedures
required by those sections have been complied with;
(b) …….
(4) In any proceedings contemplated this section,
if the court determines that –
a) ….
b)
the credit provider
has not complied with the relevant provisions of this Act, as
contemplated in subsection 3 (a)………
the court
must
i)
adjourn the matter
before it; and
ii)
make an appropriate
order setting out the steps the credit provider must complete before
the matter may be resumed
.”
[17]
In
summary judgment proceedings, a defendant who does not give security
to the plaintiff must satisfy the court by affidavit that
he has a
bona
fide
defence to the action.
11
In resisting the plaintiff’s claim the defendant’s
contentions must be advanced with a sufficient degree of clarity
to
enable the court to ascertain whether he or she has deposed to a
defence which, if proved at the trial, would constitute a good
defence to the action.
12
Whilst non-compliance with
section 129(1)(a)
is an impediment to
commencing any legal proceedings to enforce a credit agreement, it
does not constitute a
bona
fide
defence of the nature envisaged by
Rule 32(3)(b).
Once it is
established at trial stage that the plaintiff has not complied with
section 129(1)(a)
, the trial will be adjourned and an order made
setting out the steps the plaintiff must complete before the trial is
resumed. The
fact that
section 130(4)(b)
envisages the resumption of
the proceedings following the court having made an appropriate order,
illustrates that non-compliance
with
section 129(
1)(a) does not
constitute a
bona
fide
defence for summary judgment purposes.
[
18] In
the circumstances, I must respectfully disagree with the finding in
Standard
Bank of South Africa Limited vs Van Vuuren
,
namely that a defendant who establishes non-compliance with
section
129
of the NCA has established a defence and is entitled to leave to
defend. The court’s hands are tied and it
must
act in accordance with
section 130(4)(b).
[19] Accordingly,
this matter will be adjourned
sine
die
and an order will be made as to the steps which the plaintiff must
take before it may again set down this application for summary
judgment.
[20] The plaintiff
is responsible for the adjournment of the summary judgment
application and must therefore pay the wasted costs
occasioned
thereby.
The Order is as follows:
The application
for summary judgment is
adjourned
sine
die
.
The
plaintiff
is afforded an opportunity to provide a notice to the defendants as
contemplated in sections 129 and 130 of the NCA.
If such notice is
sent by registered mail to the defendants it shall be deemed to have
been delivered to them 14 days after posting
by the plaintiff.
The
plaintiff
may set down the application for summary judgment on notice to the
defendants not less than 10 days after the notice
in terms of
section 129 has been delivered.
Save for the direction herein given
relating to the sending of the notice contemplated in section 129,
the defendants’ rights
in terms of the NCA remain unaffected.
The Plaintiff is
directed to pay the Defendants’ wasted costs caused by the
adjournment of the application for summary judgment
.
__________________
Epstein AJ
1
1
March 2010
Attorneys
for Plaintiff:
Ramsay
Webber
269
Oxford Street
Illovo
Johannesburg
Tel:
011 778 0600
Adv
ocate
Steven Ress
Counsel
for Applicant
082
852 5791
Attorneys
for Defendants
:
R.A.
Rockhill & C.C. van Heerden
c/o
Eamonn David Quinn Attorneys
4
St David Lane
Houghton
Johannesburg
Tel:
011 784 2767
Ref:
Mr E Quinn
Adv
Darryl Williams
Counsel
for Defendant
1
Although the word ‘may’ is used in
section 129(1)(a) of the NCA, the giving of the notice is
peremptory. This is clear
from a reading of section 129 (1) (a)
together with sections 129 (1) (b) and 130 (1).
2
Section 1 of the NCA
3
In the NCA, ‘this Act’ is defined to
include a regulation made under the Act.
4
GNR489 of 31 May 2006
5
Regulation 1, Definitions
6
2010 (1) SA 549
(KZD) at 555 A – I. See
also Marques v Unibank Ltd
2001 (1) SA 145
(W).
7
1936 AD 26
at 30 – 32; See also Jaga v
Dönges, N.O. & Another
1950 (4) SA 653
(AD) at 662.
8
1.1 Introduction [issue 1]
9
See Munien, supra, footnote 6.
10
2009 (5) SA 557
11
Uniform Rule of Court 32 (3)
12
Maharaj vs Barclays National Bank Ltd
1976 (1) SA
418
(A); Erasmus, Superior Court Practice, B1 – 222 [service
34, 2009]