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[2010] ZAWCHC 208
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Mercedes Benz Financial Services (South Africa) (Pty) Ltd v Dunga (9222/2010) [2010] ZAWCHC 208; 2011 (1) SA 374 (WCC) (20 September 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
CASE
NO:
9222/2010
In
the application of:
MERCEDES
BENZ FINANCIAL SERVICES
SOUTH
AFRICA (PTY) LIMITED
…....................................................................
Plaintiff
and
PAPANA
GIDEON DUNGA
…........................................................................
Defendant
JUDGMENT
DELIVERED ON 20 SEPTEMBER 2010
BLIGNAULT
J
:
[1]
This is an opposed application for summary judgment.
[2]
Plaintiff is Mercedes Benz Financial Services South Africa (Pty)
Limited, a company having its principal place of business at
123
Wierda Road, Zwartkop, Centurion Defendant is Mr Panana Gideon Dunga,
an adult male residing at 11 Block LB2, Mendi Avenue,
Langa, Cape
Town.
[3]
Plaintiff instituted this action for the delivery of a motor vehicle
and payment of amounts due in terms of an instalment sales
agreement.
[4]
Paras 11 and 12 of the particulars of claim read as follows:
"11.
In due satisfaction of the requirements of Section 86(10) of Act 34
of 2005 read together with
section 89
and
130
of the
National Credit
Act 34 of 2005
a letter was sent by, or alternatively on behalf of,
the Plaintiff to the Defendant, the Debt Counsellor and the National
Credit
Regulator on
30
NOVEMBER 2009
by
pre-paid registered mail at the address provided by the Defendant,
the registered addresses of the Debt Counsellor and the National
Credit Regulator respectively.
12.
in the aforementioned letter the Defendant was informed that he had
not satisfied his obligations, and that the Debt Review
process the
Defendant was thereby terminated as a period of 60 (sixty) days had
lapsed since application was made for Debt Review
without
resolution."
[5]
Defendant filed a notice of intention to defend the action and
plaintiff applied for summary judgment.
[6]
Defendant deposed to an opposing affidavit. He said that he went into
debt review and paid the monthly instalments required
to the Payment
Distribution Agency.
[7]
At the hearing of the summary judgment application defendant applied
for and was granted leave to file an additional opposing
affidavit.
The matter was postponed for that purpose. This affidavit was deposed
to by Ms Derry Burge, his debt counsellor. She
stated,
inter
alia,
that
defendant's debt review had been set down for hearing in the Somerset
West magistrate's court on 25 November 2009. Notice of
his
application in terms of section 86 of the National Credit Act 34 of
2005 ("the NCA") was attached to the affidavit.
According
to the notice he was to apply for an order declaring that he is
over-indebted as set out in section 79 of the NCA and
that his debts
be restructured. Ms Burge said that plaintiff was notified of this
hearing. Ms Burge then made the following statement:
"Due to the
declaratory order this matter was postponed
sine
die"
She
proceeded as follows:
"15.
I state that the North Gauteng High court was deliberating over
certain legal issues pertaining to various sections of
the NCA and
only came to a decision on 21 August 2009, The Declaratory Order,
which judgment affected all our court processes.
16.
I state that the defendant's application for debt review then had to
be amended and has been set down again for 3 September
2010."
[8]
Plaintiff filed a replying affidavit, deposed to by Ms Kavitha
Kaylaser. She confirmed that no agreement had been reached between
the parties and that the debt review application had been set down to
be heard in the Somerset West magistrate's court on 25 November
2009.
She pointed out, however, that, as appears from the court file, the
application was withdrawn on 25 November 2009. Defendant
issued a new
application in the magistrate's court, under a different case number,
on 14 July 2010, being the same date that the
application for summary
judgment was set down for hearing in this court. This application was
due to be heard on 3 September 2010.
Ms Kaylaser accordingly
contended that when plaintiffs notice of termination of the debt
review was sent to defendant, ie on 30
November 2009, there was no
debt review application pending in the magistrate's court.
[9]
Mr Willie Steyn appeared on behalf of plaintiff at the postponed day
of the hearing of the summary judgment application. He
accepted that
plaintiff could not terminate the debt review process in terms of
section 86(10) of the NCA whilst there was a
debt review application
pending in the magistrate's court. At the time when plaintiff sent
the section 86(10) notice to defendant
there was, however, no
application pending in the magistrate's court as the application had
been withdrawn.
[10]
Mr Rael Kassel appeared on behalf of defendant at the hearing of the
summary judgment application. He submitted that defendant's
debt
review application in the magistrate's court had been withdrawn in
order to bring an application which would conform to
the provisions
of the NCA as interpreted in the case of
National
Credit Regulator v Nedbank Ltd and Others
2009
(6) SA 295
(GNP). This contention is not really consistent with the
facts set forth in Ms Burge's affidavit but I shall accept that it
reflects
defendant's intention at the time.
[11]
The first question to be determined in this matter is whether
plaintiff was entitled to terminate the debt review in terms
of
section 86(10) of the NCA when it purported to do so on 30
November
2009. A second question is whether defendant would have any defence
to plaintiff's claim if such termination of the debt
review was
valid.
[12]
The provisions of sections 86 and 87 of the NCA are relevant to
these questions. For ease of reference I propose to quote
these
provisions in full (All further references to "section" or
"sections" in this judgment will be to sections
of the
NCA):
"86
Application for debt review
(1)
A consumer may apply to a debt counsellor in the prescribed manner
and form to have the consumer declared over-indebted.
(2)
An application in terms of this section may not be made in respect
of and does not apply to, a particular credit agreement
if, at the
time of that application, the credit provider under that credit
agreement has proceeded to take the steps contemplated
in section
129 to enforce that agreement
(3)
A debt counsellor-
(a)
may require the consumer to pay an application fee, not exceeding
the prescribed amount, before accepting an application in
terms of
subsection (1); and
(b)
may not require or accept a fee from a credit provider in respect of
an application in terms of this section.
(4)
On
receipt of an application in terms of subsection (1),
a
debt
counsellor must-
(a) provide the consumer with proof of receipt
of the
application;
(b)
notify, in the prescribed manner and form-
(i)
all
credit providers that are listed in the
application; and
(ii)
every
registered credit bureau.
(5)
A
consumer who applies to a debt counsellor, and each
credit
provider contemplated in subsection (4) (b), must-
(a)
comply with any reasonable requests by the debt counsellor to
facilitate the evaluation of the consumer's state of indebtedness
and the prospects for responsible debt re-arrangement; and
(b)
participate in good faith in the review and in any negotiations
designed to result in responsible debt re-arrangement
(6)
A
debt counsellor who has accepted an application in terms of this
section must determine, in the prescribed manner and within
the
prescribed time-
whether
the consumer appears to be over-indebted; and
if
the consumer seeks a declaration of reckless credit, whether any of
the consumer's credit agreements appear to be reckless.
(7)
If, as a result of an assessment conducted in terms of subsection
(6), a debt counsellor reasonably concludes that-
(a)
the consumer is not over-indebted, the debt counsellor must reject
the application, even if the debt counsellor has concluded
that a
particular credit agreement was reckless at the time it was entered
into;
(b)
the consumer is not over-indebted, but is nevertheless experiencing,
or likely to experience, difficulty satisfying all the
consumer's
obligations under credit agreements in a timely manner, the debt
counsellor may recommend that the consumer and the
respective credit
providers voluntarily consider and agree on a plan of debt
re-arrangement; or
(c)
the consumer is over-indebted, the debt counsellor may issue a
proposal recommending that the Magistrate's Court make either
or
both of the following orders-
(i)
that
one or more of the consumer's credit agreements be declared to be
reckless credit if the debt counsellor has concluded that
those
agreements appear to be reckless; and
(ii)
that
one or more of the consumer's obligations be re-arranged by-
(aa)
extending the period of the agreement and reducing the amount of
each payment due accordingly;
(bb)
postponing during a specified period the dates on which payments are
due under the agreement;
(cc)
extending the period of the agreement and postponing during a
specified period the dates on which payments are due under
the
agreement; or
(dd)
recalculating the consumer's obligations because of contraventions
of Part A orB of Chapter
5,
or
Part A of Chapter
6.
(8)
If a debt counsellor makes a recommendation in terms of subsection
(7) (b) and-
(a)
the consumer and each credit provider concerned accept that
proposal, the debt counsellor must record the proposal in the
form
of an order, and if it is consented to by the consumer and each
credit provider concerned, file it as a consent order in
terms of
section 138; or
(b)
if paragraph (a) does not apply, the debt counsellor must refer the
matter to the Magistrate's Court with the recommendation.
(9)
If a debt counsellor rejects an application as contemplated in
subsection (7) (a), the consumer, with leave of the Magistrate's
Court, may apply directly to the Magistrate's Court, in the
prescribed manner and form, for an order contemplated in subsection
(7) (c).
(10)
If a consumer is in default under a credit agreement that is being
reviewed in terms of this section, the credit provider
in respect of
that credit agreement may give notice to terminate the review in the
prescribed manner to-
(a)
the consumer;
(b)
the debt counsellor, and
(c)
the National Credit Regulator, at any time at least 60 business days
after the date on which the consumer applied for the
debt review.
(11)
If
a credit provider who has given notice to terminate a review as
contemplated in subsection (10) proceeds to enforce that agreement
in terms of Part C of Chapter 6, the Magistrate's Court hearing the
matter may order that the debt review resume on any conditions
the
court considers to be just in the circumstances.
87 Magistrate's
Court may re-arrange consumer's obligations
(1)
If a debt counsellor makes a proposal to the Magistrate's Court in
terms of section 86 (8) (b), or a consumer applies to the
Magistrate's Court in terms of section 86 (9), the Magistrate's
Court must conduct a hearing and, having regard to the proposal
and
information before it and the consumer's financial means, prospects
and obligations, may-
(a)
reject the recommendation or application as the case may be; or
(b)
make-
(i)
an
order declaring any credit agreement to be reckless, and an order
contemplated in section 83 (2) or (3), if the Magistrate's
Court
concludes that the agreement is reckless;
(ii)
an
order re-arranging the consumer's obligations in any manner
contemplated in section 86 (7) (c) (ii); or
(iii)
both orders contemplated in subparagraph (i) and (ii).
(2)
The National Credit Regulator may not intervene before the
Magistrate's Court in a matter referred to it in terms of this
section".
[13]
It is necessary to consider the meaning and effect of sections
86(10) and 86(11) in order to deal with the application for
summary
judgment before me. These sections have given rise to considerable
debate in various recent judgments, most of them still
unreported. I
do not propose to discuss these judgments on a case by case basis. I
shall rather attempt to identify the main
approaches in them and
then comment thereon in order to motivate my own views.
[14]
At the outset, before embarking on a discussion of these issues, it
may be helpful to state my own conclusions in regard
to the
interpretation of sections 86(10) and 86(11).
[15]
In my view it is necessary to imply a proviso into section 86(10) to
the effect that the credit provider may only terminate
a debt review
if he is acting in good faith.
[16]
As to section 86(11), it is in my view necessary to recognise that
it contains a
casus
omissus
,
ie a contingency not provided for in the statute, and to provide for
it by reading in the words "or High Court" immediately
after the words "Magistrate's Court."
[17]
By way of background I may point out that the NCA has already become
notorious for its lack of clarity. In what must have
been an
unprecedented step, an application was brought by the National
Credit Regulator in order to obtain no less than eleven
declaratory
orders
"aimed
at clarifying interpretational difficulties that those who work with
the Act experience in practice,"
See
the judgment of Du Plessis J in
National
Credit Regulator v Nedbank Ltd and Others
2009
(6) SA 295
(GNP). It is noteworthy that Du Plessis J in fact relied
upon three implied provisions in the course of his judgment.
[18]
The test for implying a provision into a statute is clear. In
Masetlha
v President of the Republic of South Africa and Another
[2007] ZACC 20
;
2008
(1) SA 566
(CC) the Constitutional Court, at para [192], formulated
it as follows:
"...words
cannot be read into a statute by implication unless the implication
is a necessary one in the sense that without
it effect cannot be
given to the statute as it stands. In addition, such implication
must be necessary in order to 'realise the
ostensible legislative
intention or to make the [legislation] workable."
[19]
There are dicta in judgments of the Supreme Court of Appeal that may
create the impression that there is an absolute rule
that a
casus
omissus
cannot
be supplemented by a court. See, for example,
Barkett
v SA National Trust & Assurance Co Ltd
1951
(2) SA 353
(A) at 361F-G:
If
it is a casus omissus, this Court cannot supplement the Act by
providing for a casus omissus, its sole duty being to construe
the
Act as it stands."
[20]
Upon analysis, however, it appears that the rule is not absolute. In
S
v
Tieties
[1990] ZASCA 4
;
1990
(2) SA 461
(AD) the question arose whether, and if so, in what
circumstances, it was permissible in interpreting a statute to alter
the
wording thereof. In a comprehensive discussion of this question,
Smalberger JA said the following, at 464-464F:
"It
follows from the above principles that, whereas a Court may in
appropriate cases depart from the ordinary meaning of
the words used
in a statute, or even modify or alter such words, it may only do so
where this is necessary to give effect to
what can with certainty be
said to be the true intention of the Legislature. Once such
intention has been established the Court
should not hesitate to give
effect thereto. The conect approach in this regard is, in my view,
that set out in Steyn Die Uitleg
van Wette 5th ed at 68 as follows:
'Binne
die bepen\te gebied waahn die afwykende wetgewende wil wel met
sekemeid vasgestel kan word bestaan daar egter geen genoegsame
rede
om terug te deins vir 'n woordverandering wat daardie wil sal
uitvoer nie. Die beswaar dat dit nie die taak van die Regbank
is om
wette te maak nie, vloei voort uit 'n foutiewe opvatting aangaande
die werklike aard van
'n
Wet.
Die mening van Donellus dat die wil, en nie die woord nie, die Wet
maak, lyk gesond. Vir wie daardie mening onderskryf, tree
'n Hofnie
wetgewend op as hy woordwysigende uitleg toepas nie. maar wel
wanneer hy 'n woord wat nie die bedoeling weergee nie
en daarom geen
Wet is nie, tot Wet verhef.'
The
principles enunciated above have been consistently followed and
applied in our Courts. Instances thereof are to be found in
the
cases conveniently collected and referred to in Steyn (op cit at 58
- 61 including footnote 133). It is clear from these
principles, and
the cases that have applied them, that provided it can be
indisputably established that the Legislature intended
something
different from the ordinary meaning conveyed by the words used in a
statutory enactment, a departure from such meaning
is justified,
even if it involves an alteration or substitution of the words
used."
[21]
In
principle there does not appear to be any difference between the
reading in of a word to replace another word and the reading
in of a
word to fill a gap. In the
Tieties
judgment,
as appears above, Smalberger JA referred with approval to Steyn
Die
Uitleg van Wette
5th
ed 58-61.
The
following statement in Steyn, at 60, is pertinent:
"Dat
'n woordwysigende uitleg nie in beginsel te verwerp is nie, blyk
verder uit Santy's Wine and Brandy Co (Natal) Ltd v
District
Commandant SA Police
1945 NPD 118
waar die volgende uit Halsbury
oorgeneem word:
...
while terms can be introduced into a Statute to give effect to its
clear intention by remedying mere defects of language,
no provision
which is not in the Statue can be implied to remedy an omission, in
the absence of any ground for thinking that
such a course is
necessary to carry out the intention of Parliament.'
Positief
gestel, sou ons hiervolgens kan s§ dat nie aileen taalgebreke
verbeter kan word nie, maar dat selfs 'n casus omissus
aangevul kan
word waar dit noodsaaklik is om daardeur aan die bedoeling van die
Pariement gevolg te gee."
[22]
It seems to me therefore that it would be permissible to provide for
a
casus
omissio
if
the intention of the legislature is clear. If that intention is only
the subject of surmise, speculation, expectation or even
probability, this method of interpretation is not allowed.
[23]
In the result, it appears to me that there is no principial
difference between the implication of words into a statute and
providing for a
casus
omissus.
Devenish
Interpretation
of Statutes
99
indeed calls this an
"artificial
distinction."
According
to both methods one must have regard to the object of the statutory
provision, the context, the workability of the provision,
the
avoidance of absurd results and the language of the provision itself
in order to determine whether it is necessary to read
the words in
question into the statute I propose to apply these considerations to
sections 86(10) and 86(11).
[24]
Common to both enquiries is the object of the debt review provisions
contained in sections 86 and 87. Although other parts
of the NCA may
have wider or other purposes, it seems to me that the object of the
debt review provisions is
"clear
and indubitable".
It
is the provision of assistance to an over-indebted consumer in an
environment that encourages participation in good faith by
both
parties.
[25]
I turn first to section 86(10). For ease of reference I quote the
relevant part of it again:
"(10)
If a consumer is in default under a credit agreement that is being
reviewed in terms of this section, the credit provider
in respect of
that credit agreement may give notice
to terminate the review
at
any time at ieast 60 business days after the date on which the
consumer applied for the debt review."
[26]
It is generally recognised in the judgments that I have seen, that a
literal interpretation of section 86(10), read on its
own, may give
rise to unfortunate results. On a literal interpretation the credit
provider may give notice of the termination
of the debt review after
only two conditions are met, firstly that the consumer is in default
under a credit agreement and, secondly,
that the period of 60
business days has elapsed since the consumer's initial debt review
application. Experience has shown that
the typical debt review takes
longer than 60 business days, often much longer, before it results
in an order by the Magistrate's
Court in terms of section 87. By
terminating the debt review after 60 business days the credit
provider may be able to derail
the entire debt review process by way
of a single unilateral act, regardless of the reasonableness of the
conduct of the consumer
or his own conduct.
[27]
This unfortunate result is described in the following passage in the
judgment of Binns-Ward J in the Western Cape High Court,
Cape
Town in the matter of
Changing
Tides 17 (Pty) Limited NO v Lucas Marthinus Erasmus and Another and
two other cases,
delivered
on 12 November 2009, para [30]:
"My
summary of the relevant provisions above makes it clear that a debt
review conducted strictly in accordance with the
regulations should,
within a period of 60 business days, have resulted in either a
rejection of the debt review application,
or the institution of an
application by the debt counsellor to the magistrate's court in
terms of either s 86(7)(c) ors
86(8)(b)
of the NCA. It should be only in an unusual case that a credit
provider gives notice in terms of s 86(10) of the Act
In the
ordinary case it would be inappropriate for a credit provider to
give notice in terms of the provision if a relevant application
was
already pending before a magistrate's court and being prosecuted
with reasonable efficiency. The object of the provision
of s 86(10)
cannot be to permit a credit provider carte blanche, without good
reason, to negate the operation and effect of a
debt review process
instigated in terms of s 86 of the NCA."
[28]
I agree with the tenor of Binns-Ward's remarks. I point out,
however, that he does not explain on what interpretational grounds
he arrives at the conclusions expressed therein. I also do not agree
with the logic of the distinction which he draws between
the period
before and the period after the reference of the debt review
application to the Magistrate's Court.
[29]
In
Standard
Bank of South Africa Ltd v Kruger; Standard Bank of South Africa Ltd
v Pretohus
2010
(4) SA 635
(GSJ) Kathree-Setiloane AJ also dealt with the
interpretation of section 86(10). She recognised that a literal
reading of section
86(10) would result in an
"absurdity".
Her
conclusion in this regard appears from para [24] of the judgment:
"In
summary, I am of the view that notice in terms of s 86(10) of the
Act is not competent where a debt counsellor has already
referred
the debt review to the magistrates' court. Any contrary
interpretation would render the entire debt review process
ineffectual, since all credit providers will simply wait for 60
working days, well knowing that no magistrates' court will be
able
to adjudicate the debt review in terms of s 87 of the Act to
finality within 60 business day from referral to it. Such an
interpretation would circumvent the protection afforded by the Act,
and would be in conflict with the intention of the legislature.
It
is vital in this regard that the provisions of the Act, and in
particular the provisions s 86(10)
y
be
viewed in their proper context and not to the detriment of the
consumer, which the Act so clearly seeks to protect."
[30]
Whilst I agree with Kathree-Setiloane AJ's comments about the
unfortunate results that would flow from a literal interpretation
of
section 86(10), I do not agree with her interpretation of section
86(10). It seems to me that she is in effect attempting
to read an
implied provision into section 86(10) without motivating or
formulating it. It would be anomalous, furthermore, if
the credit
provider could not terminate the debt review after the application
had been referred to the Magistrate's Court but
could do so before
such reference.
[31]
In contrast to the more purposive approaches of Binns-Ward J and
Kathree-Setiloane AJ, one finds a literal approach to section
86(10)
in other judgments. In two of these judgments it is argued that the
consumer is protected by the provisions of section
86(11) from the
unfortunate results of the literal interpretation of section 86(10).
In
Taxi
Securisation (Pty) Ltd v Lulama Sheik Nako and Others,
delivered
in the Bisho High Court on 8 June 2010, Kemp AJ, for example, refers
in bald terms to
"the
protection expressly afforded the credit receiver in terms of
section 86( 11)"
but
he does not analyse the nature or extent of this protection.
[32]
The most recent judgment on this topic that I am aware of is that of
Eksteen J delivered in the Eastern Cape High Court,
Grahamstown on 2
September 2010 in the matter of
Firstrand
Bank Limited v Sally Ann Collett
Eksteen
J held that on a proper reading of section 86(10) a notice of
termination of the debt review may be given at any time
until the
Magistrates Court has made an order as envisaged in section 87. He
considered inter alia Kathree-Setiloane J's concern
that such an
interpretation would mean that any delay, even an unforeseen delay,
would deprive the consumer of the opportunity
to have his debt
review properly determined before a court. In answering this concern
Eksteen J turned to section 86(11). The
reference in section 68(11)
to the
"Magistrate's
Court hearing the matter",
he
said, is a reference to the Magistrate's Court to which the debt
review has been referred to in terms of section 86(8)(b).
Where a
notice terminating the debt review in terms of section 86(10) has
been sent, the consumer is afforded a remedy in section
86(11). The
Magistrate's Court that exercises judicial oversight over the debt
review process may then order that the debt review
resume. Section
86(11) is thus designed to protect the consumer in these
circumstances.
[33]
I turn therefore to the interpretation of section 86(11) before
reverting to section 86(10). For ease of reference I quote
section
86(11) again:
"(11)
If a credit provider who has given notice to terminate a review as
contemplated in subsection (10) proceeds to enforce
that agreement
in terms of Part C of Chapter 6, the Magistrate's Court heanng the
matter may order that the debt review resume
on any conditions the
court considers to be just in the circumstances".
[34]
It is my view that a literal interpretation of section 86(11) is
untenable. There is, as stated above, a
casus
omissus
here
which could and should be addressed by reading in the words
"or
High Court"
immediately
after "Magistrate's Court." Such a reading in would give
effect to the object of the debt review provisions
of the NCA and
render section 86(11) sensible, workable and linguistically
appropriate.
[35]
As I see it, a literal interpretation of section 86(11) is beset
with difficulties. The first is that it gives rise to the
problem of
inconsistent parallel proceedings. The second is an anomalous result
The third difficulty is that it is not practically
workable and the
fourth is that it is not linguistically sustainable.
[36]
I propose to deal with these difficulties in turn. It may be useful,
however, if I first explain briefly how section 86(11)
would be
applied in practice on the construction suggested by me, ie with the
casus
omissus
provided
for by way of the insertion of the words
"or
High Court"
immediately
after the words
"Magistrate's
Court".
Section
86(11) contemplates two proceedings. The first is the enforcement
action by which the credit agreement is enforced by
the credit
provider against the consumer. This action can be instituted in the
High Court or the Magistrate's Court, depending
on the
jurisdictional limit of the latter. The second proceeding is the
debt review application in terms of the NCA which commences
with an
application in terms of section 86(1) and culminates in an order in
the Magistrate's Court in terms of section 87. In
terms of section
86(11) it is the court hearing the enforcement action that may order
that the debt review application resume.
When such a resumption
order is made that court will, expressly or by necessary
implication, order that the enforcement action
be stayed. The debt
review application will then resume at the point it had reached
prior to the termination thereof.
[37]
The first difficulty with the literal interpretation of section
86(11) is that of inconsistent parallel proceedings. On the
literal
interpretation the further course of the enforcement action (in
either court) remains unexplained. If it continues despite
the
consumer's application for a resumption order in the Magistrate's
Court,
it is likely to render the debt review futile. If it is stayed, by
what court and on what grounds will such a stay be ordered?
[38]
The problem of inconsistent parallel proceedings, although in a
slightly different context, was described as an absurd result
by
Masipa J in
Standard
Bank of South Africa Ltd v Panayiotts
2009
(3) SA 363
(W) para [18]. He said the following:
"[18]
Any other interpretation could lead to absurdity, since, if
different courts were involved, a magistrates' court would
be
adjudicating a matter whilst it is pending in the High Court. The
element of policing would also be problematic, since the
High Court
would not necessarily know if its request has been heeded and
carried out in the magistrates' court."
[39]
My second difficulty with the literal interpretation of section
86(11) is that it leads to an anomalous result namely that
debt
review proceedings may only be ordered to resume if there had
already been a reference of the debt review to the Magistrate's
Court in terms of section 86(8)(b) prior to the termination of the
debt review. It is inconceivable that the Magistrate's Court
hearing
an application for an order in terms of section 87, could, for
example, order that the provisions of section 86(7) be
by-passed.
[40]
The third difficulty with the literal interpretation of section
86(11) concerns its workability in practice. On what basis
will the
application in the resumed debt review be presented and where will
it fit in on the waiting list? What is the status
of the debt review
in the meantime? It has been terminated but it has not yet resumed.
What if the consumer drags his feet? The
credit provider would be
unable to terminate the debt review again because there is no debt
review.
[41]
My fourth difficulty with the literal interpretation of section
86(11) is linguistic in nature. It places a strained meaning
on the
words
"hearing
the matter"
and
"resume".
According
to the literal approach it is the Magistrate's Court that is dealing
with the application for a section 87 order that
is
"hearing
the matter".
However,
before a resumption order is made the Magistrate's Court that will
deal with the debt review in due course in terms of
section 87 is
not hearing anything. The debt review application may not even have
been enrolled yet. That Magistrate's Court
will only be
"hearing
(a) matter" once
the
debt review resumes and the debt review application comes before it
for an order in terms of section 87. Applying the natural
meaning of
"hearing
the matter"
it
is the court hearing the enforcement action which is empowered to
make the resumption order.
[42]
The literal approach furthermore interprets the word
"resume"
in
a strained manner. The ordinary meaning of that word, in the present
context, is
"to
continue after an interruption".
(See
the Concise Oxford Dictionary) That is the exact effect of the order
that the court is required to make in terms of section
86(11). On
the literal approach the court hearing the debt review application
will make a resumption order and then, at the same
hearing, make an
order in terms of section 87. The debt review will resume and be
concluded at the same hearing.
[43]
On the interpretation of section 86(11) suggested by me, ie with the
casus
omissus
provided
for, these interpretational and practical difficulties fall away.
The court hearing the enforcement action would be approached
by the
consumer, possibly
in
limine,
for
a resumption order. That court will presumably consider the
consumer's explanation for the termination of the debt review
and
his prospects of successfully prosecuting the debt review. If it
grants a resumption order, it will, expressly or by necessary
implication, make an order staying the enforcement action. The debt
review will then continue in terms of section 86(10) from
the point
where it was terminated until an order is made in terms of section
86(7). There will be no risk of inconsistent findings.
[44]
It is interesting to note that that Kathree-Setiloane AJ followed a
somewhat similar approach to section 86(11) in another
judgment of
hers, namely
SA
Secuhtisation (Pty) Limited v Matlala, Gideon,
delivered
on 29 July 2010 in the South Gauteng High Court. She said the
following, in para [9]:
"According
to Kemp AJ in SA Taxi Secuhtisation v Nako, the Magistrate's Court
referred to in section 86(11) is the Magistrate's
Court to whom the
debt review has been referred in terms of section 86(7) of (8) of
the Act, and the phrase "hearing the
matter" refers to the
review before it in terms of section 87 of the Act With ail due
respect to Kemp AJ, I am of the view
that his interpretation of
section 86( 11) is misconceived for the following reasons. It is
clear from a proper reading of section
86( 11) of the Act that the
Magistrate's Court referred to in that section is not the
Magistrate's Court to which the review
has been referred in terms of
section 86(7) of (8) of the Act, but rather the Magistrate's Court
before which the credit provider
seeks to enforce the agreement in
terms of Part C of Chapter 6. Hence, the phrase 'the Magistrate's
Court hearing the matter'
refers to the Magistrate's Court hearing
the matter which concerns the enforcement of the agreement in terms
of Part C, Chapter
6 of the Act, and not the debt review itself."
The
only problem with this interpretation of section 68(11) is that it
cannot be reconciled with the words "Magistrate's
Court"
standing alone Kathree-Setiloane AJ was later criticised for this.
On the construction of section 86(11) suggested
by me such criticism
falls away.
[45]
I return then to the interpretation of section 68(10). The question
to be determined is whether section 86(11), on my construction
thereof, provides such meaningful protection for the consumer that
it would justify the literal interpretation of section 86(10).
[46]
In my view it would not. Upon a literal interpretation of section
86(10) the consumer may find that the debt review is arbitrarily
terminated by the credit provider. It would be in the consumer's
interest that the debt review resume as soon as possible but
he will
have to wait for the credit provider to institute enforcement
proceedings. The consumer will have to defend the enforcement
action
in a litigatory environment. He will be saddled with an onus to show
at least that he has prospects of success in the
debt review
application. The parties will be involved in time consuming, costly,
and, for many consumers, unaffordable litigation,
the very event
which the debt review procedure seeks to avoid.
[47]
It is my view therefore that the suggested protection afforded to
the consumer in terms of section 86(11), is fraught with
difficulties, costs and delays which are contrary to the purpose of
debt review proceedings. It is not a factor that can justify
a
literal interpretation of section 86(10).
[48]
The solution suggested by me is the implication of a proviso into
section 68(10) to the effect that a credit provider may
only
terminate a debt review if he is acting in good faith. The
implication of such a proviso would be consistent with the purpose
of the debt review provisions of the NCA and avoid the unfortunate
results of a literal interpretation It would not jeopardise
the
workability of section 86(10) and it would fit in with the language
of section 86 as a whole, in particular section 86(5)(b).
[49]
It is accepted that the content of a statutory provision which is
sought to be implied must be clear. See
The
Firs Investments (Pty) Ltd v Johannesburg City Council
1967
(3) SA 549
(W) at 557E - G:
"Moreover,
a strong factor militating against the implication of any such
limitation is the difficulty of formulating it.
In contract a term
will not be implied where considerable uncertainty exists about its
nature and scope, for it must be precise
and obvious.... I think
that the same must apply to implying a term in a statute, for the
process is the same...."
[50]
In the present case this is not a problem. The proposed implied
provision is informed by the words
"participate
in good faith"
in
section 86(5)(b). The criterion of
"good
faith"
is
elastic and capable of application in various circumstances. A
passage in the judgment of Nicholas AJA in
Schultz
v Butt
1986
(3) SA 667
(A)
at
678J-679D is instructive in this regard Dealing with the requisite
of unlawfulness in the context of unfair competition he
said the
following:
"In
the Dun and Bradstreet case supra at 218 CORBETT J referred to the
fact that in the cases of Geary & Son (Pty) Ltd
v Gove (supra)
and Combrinck v De Kock
(1887) 5 SC 405
emphasis was placed upon
criteria such as fairness and honesty in competition and said:
"Fairness
and honesty are themselves somewhat vague and elastic terms but,
while they may not provide a scientific or indeed
infallible guide
in all cases to the limits of lawful competition, they are relevant
criteria which have been used in the past
and which, in my view, may
be used in the future in the development of the law relating to
competition in trade "
See
also Stellenbosch Wine Twst Ltd and Another v Oude Meester Group Ltd
; Oude Meester Group Ltd v Stellenbosch Wine Trust Ltd
and Another
1972 (3) SA 152
(C) at 161G - H.
In
judging of fairness and honesty, regard is had to boni mores and to
the general sense of justice of the community (cf Atlas
Organic
Fertilizers (Pty) Ltd v Pikkewyn Ghwano (Pty) Ltd and Others
1981
(2) SA 173
(T) at 188 - 189 and the cases there cited, and Lorimar
Productions Inc and Others v Sterling Clothing Manufacturers (Pty)
Ltd
; Lorimar Productions Inc and Others v OK Hyperama Ltd and
Others ; Lorimar Productions Inc and Others v Dallas Restaurant
1981
(3) SA 1129
(T) at 1152 -1153)".
[51]
For purposes of this judgment it is not necessary to define the
precise ambit of the suggested
"good
faith"
criterion.
Suffice it to say that in the absence of special circumstances I
would not regard the termination of a debt review
by the credit
provider whilst the consumer is prosecuting it in good faith and in
a reasonable manner, as action taken in
"good
faith".
[52]
For these reasons I conclude that it is necessary to imply a proviso
into section 86(10) to the effect that a credit provider
may only
terminate a debt review if he is acting in good faith.
[53]
In my view it is also necessary to recognise that section 86(11)
contains a
casus
omissus
and
provide for it by reading in the words "or High Court"
immediately after the words "Magistrate's Court."
[54]
I revert to the summary judgment application presently under
consideration. I propose to apply sections 86(10) and 86(11)
with
the implied provisions suggested by me.
[55]
Although the wording of the order made by the Somerset West
magistrate reads that defendant's application was withdrawn.
I shall
assume in defendant's favour that the intention at the time was not
to terminate the debt review, but to prosecute it
with certain
amendments.
[56]
The problem for defendant, however, is that he did not prosecute the
application in such a way after it was withdrawn on
25 November
2009. It would appear, in fact, that defendant did nothing at all
until he filed a new application more than seven
months later. In my
view this was clearly not a reasonable way of prosecuting the debt
review.
[57]
It seems to me therefore that plaintiffs termination of the debt
review in terms of section 86(10) was valid.
[58]
That is, however, not the end of the road for defendant. Upon my
interpretation of section 86(11) defendant would be able
to ask for
an order in the present proceedings that the debt review resumes. In
summary judgment proceedings, therefore, defendant
would have been
able to raise the defence that he intends to ask for such an order.
In order to show that he has a
bona
fide
defence he would presumably have to
allege
that he has reasonable prospects of obtaining a favourable order in
the debt review application.
[59]
It is apparent from defendant's opposing affidavit in the summary
judgment proceedings that he did not have in mind a defence
based on
section 86(11). In
view
of the fact that defendant's debt review application had already
been referred to the Magistrate's Court and that its withdrawal
thereof was perhaps not due to a lack of any belief on his part in
its prospects of success, defendant may yet be able to set
out a
defence based on the provisions of section 86(11).
[60]
The court has a residual discretion in deciding whether to grant or
refuse summary judgment. According to
Tesven
CC and Another v South African Bank of Athens
2000
(1) SA 268
(SCA) para [26]
“
The
discretion may be exercised in a defendant's favour if there is
doubt as to whether the plaintiffs case is unanswerable and
there is
a reasonable possibility that the defendant's defence is a good one.
[61]
As I pointed out above, there has been much confusion in regard to
the application of section 86 and defendants attorney
might well not
have been aware of the defences that are available to him. In these
circumstances it seems to me that this is
an appropriate case for
the exercise of my discretion in favour of defendant.
[62]
In the result. I refuse summary judgment and order that costs are to
stand over for determination at the trial.
A P BLIGNAULT