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[2010] ZAGPPHC 542
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Changing Tides 17 (Pty) Ltd v Dege and Another (55819/2009) [2010] ZAGPPHC 542 (2 February 2010)
THE HIGH COURT OF SOUTH AFRICA
NORTH
GAUTENG-PRETORIA
Case
No 5581 9/2009
CHANGING
TIDES 17 (PTY)
LTD.
PLAINTIFF
V
DEGE,
HENRY CORNELIUS
1
ST
DEFENDANT
DEGE
,
LEYZL
2
ND
DEFENDENT
CORAM
SAPIRE AJ
APPLICATION
FOR SUMMARY JUDGMENT
JUDGMENT
Plaintiff
in a pending action claims payment from the Defendants of an amount
of R398 721.41. The defendants have responded to the
summons with
notice of intention to defend. Plaintiff in turn seeks summary
judgment alleging that the Defendants have no
bone fide
defence
to the claim and are defending the matter only to delay the ultimate
and inevitable outcome. This the defendants deny and
resist the
granting of summary judgment. To this end Defendants have filed an
affidavit in which they disclose the basis of their
defence.
At
this stage it is for the court to decide whether
a)
The summons discloses a cause of action which if unanswered
entitles
the Plaintiff to judgment as claimed, and if so whether
b)
the factual allegations sworn to by the defendants if established
at
the trial would substantiate a viable defence to Plaintiffs claim.
The
Plaintiff is a company and described as the trustee duly appointed as
such by the Master of the High Court, of the South African
Home Loans
Guarantee Trust. By this were to understand that the Plaintiff is the
sole trustee. The summons however does not allege
that the Plaintiff
is suing
nomine officio,
and the indication of its office as
trustee could be merely descriptive. No resolution of the Trust
authorising plaintiffs representation
of it in these proceedings is
mentioned in Plaintiffs citation in the particulars of claim. If, as
it would appear to be the case
Plaintiff is the sole trustee, its
authority to institute and prosecute the action is probable. As the
Defendant has not attacked
the citation of the plaintiff, the
application will be adjudicated on the basis that the Trust is the
plaintiff properly before
the court.
The
Trust is a registered credit provider in terms of the National Credit
Act (Section 40 of Act 34 of 2005)
The
Defendants are major individuals married to each other in community
of property.
On
or about 23rd November 2006, MAIN STREET 65(PTY) LTD, a registered
credit provider, lent R379 308 .16 (plus an additional amount
of R112
500.00) to the defendants on terms and conditions provided for in a
written agreement. The terms of the contract which
are recited at
some length in the particulars of claim are largely common cause and
not presently in issue,
Pursuant
to the agreement the lender advanced R381 912,98 to the defendants on
23rdJanuary 2007. Further debits were passed for
incidentals which
were provided for on the agreement.
The
particulars of claim recites that the loan agreement was successively
ceded to other credit providers, but ultimately back to
MAIN STREET
65(Pty)Ltd which at all material times, and to all effects and
purposes the lender in terms of the loan agreement.
The
loan was unsecured, but was granted subject to it being guaranteed by
a third party, which, in the event, is the Trust, of which
the
Plaintiff is the trustee.
The
Defendants made payment from time to time, but have defaulted in
payment and fallen into arrear. The outstanding amount owing
to the
lender was, as at 1st August 2009, R398 721.41, due for payment
because of the defendants’ default, together
with such interest
as may have accrued after that date.
As
contemplated in the loan agreement, South African Home Loans
Guarantee Trust, (“the Trust”), of which Plaintiff is
presumably, the sole Trustee, guaranteed the Defendants’
obligations under the loan agreement. In consideration of which
the
defendants undertook to indemnify the Trust against any loss, cost,
claim, expense or liability of any kind incurred or to
be incurred by
the trust as a result of the Defendants’ failure to duly and
punctually perform any of the Defendants’
obligations in terms
of the loan agreement. As security for the Defendants’
obligations to the Trust arising from the indemnity
the Defendant
mortgaged the immovable property described in the summons and which
the Plaintiff seeks to be declared executable.
The
Trust it is alleged, paid the amount of R398 721 41. to Main Street
pursuant to the guarantee on 1st August 2009, thus
discharging
the defendants’ obligations to Main Street under the loan
agreement.
The
Plaintiff now claims not only payment from the defendants of the
amount of R398 721.41 which it is alleged was paid by the Trust
pursuant to the guarantee, which would appear to be covered by the
indemnity, but also interest thereon at the rate of 11.80% per
annum,
said to be the arrear interest rate, from 1st August 2009 to
date of payment. The interest so claimed does not appear
to arise
from the terms of the indemnity and to be claimable as such. With the
payment of the full balance of the loan account
the defendants’
obligations to the lender in respect thereof ceased and terminated.
No further arrear interest could become
payable in terms of the loan
agreement, claimable from the Trust or the Defendants. Plaintiff ,in
the event of it being successful,
will be entitled to interest a
tempore mora at the rate claimed, it being less than the 15.5%
otherwise applied.
The
Plaintiff has in its Particulars of Claim alleged compliance with the
provisions of the National Credit Act No 34 of 2005 (“the
NCA”). In support of this assertion it is alleged that a
written notice in terms of the provisions of section 129(1)(a) of
the
NCA had been sent, by registered mail by the lender to the Defendants
at the address nominated by the defendants as their chosen
domicillium citandi et executandi
in the loan agreement.
This overlooks the fact that the loan agreement to which the
Trust was not a party had been discharged and affords the Plaintiff
no rights whatsoever. The plaintiff is now seeking to enforce a claim
arising from the indemnity agreement. Any obligations the
Defendants
may have is to the Trust in terms of the indemnity and not to the
“lender”. Notice, if required, was incorrectly
given by
the wrong person in respect of the wrong cause of action. The
confusion is made greater by the allegation that the Defendants
are
and have been in default of their obligations under the loan
agreement for a period of at least twenty business days. As their
obligations in terms of the loan agreement were discharged by payment
on their behalf by the trust on
1st August 2009,
as
alleged by the Plaintiff, any allegation of continued indebtedness
under the loan agreement after that date is palpably incorrect.
It
also follows that notices given by the lender are irrelevant to these
proceedings.
Plaintiffs
claim, I repeat, arises from the indemnity given by the Defendants
and the mortgage bond passed to secure their obligations
in terms o
of the indemnity. In terms of
Section 1
of the
National Credit Act 34
of 2005
“
agreement”
includes an arrangement or understanding between or among two or
more parties which purports to establish a relationship in law
between those parties.
The
scheme as disclosed in the particulars of claim, by which credit was
extended comprising the loan agreement, the guarantee and
the
indemnity is an agreement as defined. Moreover the bond is a “credit
agreement” as described in Section 8 of the
Act and the
Plaintiff Trust is a credit provider.
In
terms of Section 129 of the Act, which describes the “Required
procedures before debt enforcement”, if the consumer,
in this
case the Defendants, is in default under a credit agreement the
credit provider may not commence any legal proceedings
to enforce the
Agreement before first providing notice to the consumer as
contemplated in paragraph (a), or if such be the case
in Section
86(10). The plaintiff reliea on notice given in terms of Section
86(10)
In
this connection Plaintiff has alleged that the Defendants had
approached a debt counsellor and applied for debt review in terms
of
section 86 of the Act. No reccomendation was submitted to the
Plaintiff within the prescribed period of time.
Section
86(10) reads
(10)
II a consumer is in default under a credit agreement that is being
reviewed in terms ot 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
The
Defendants are in default of their obligations arising from the
indemnity given by them. I his being so the Plaintiff elected
to
terminate the debt review in terms of section 86(10) and gave written
notice to this effect to the Defendants the debt counsellor
and the
National Credit Regulator. There appears to have been no response to
this notice. It would appear therefore that the condition
precedent
in terms of the act to the commencement of this action has been
fulfilled.
In
response to, and opposing Plaintiffs application for summary
judgement both Defendants rely on an affidavit attested to by the
first Defendant w'ho has in such affidavit deposed to facts which the
Defendants submit disclose a defence to the Plaintiffs claim.
The
Defendants purport at this stage, in paragraph 6 of the affidavit to
afford the Plaintiff an opportunity of accepting their
offer or
rejecting it. In the event of rejection the matter, they suggest
could be referred to the Magistrates’ court to
make a fair
award. The Plaintiff is quite within its rights to ignore this offer.
d)
The Defendants proceed to admit that the Plaintiff gave notice
in
terms of section 86 (10) in order to terminate the debt review but
submit that the Plaintiff has not complied with the provisions
of
Section 86(11) of NCA.
This
Section provides
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.
It
is difficult to see what the Defendants’ have in mind in
alleging that the Plaintiff has not taken the provisions of 86(11)
into account. The Plaintiff appears to have acted within its rights
to give notice terminating the review of the Defendants’
debt.
There is no evidence of any Magistrates’ court being seized of
the matter, less so of such a court ordering that the
debt review
should be
I
appraise the affidavit by examining the allegations therein made in
the light of observations regarding the relevant assertions.
a)
The defendants were placed under debt counselling on 27th March
2009. This is common cause.
b)
A form 17(2) was sent to the Plaintiff on the 27th April
2009. A
facsimile of the form is attached to the affidavit but no proof of
the posting or delivery thereof to the Plaintiff is
tendered.
Plaintiff has alleged that no recommendation was submitted to it
“within the prescribed period of time” This
is not dealt
with pertinently by the defendants. In the absence of proof of or at
least an allegation of the Plaintiff having received
the
recommendation the Plaintiffs allegation of non receipt is
uncontested.
c)
The defendants claim to have made their payments faithfully
in terms
of a scheme of deferred payments over extended time, devised by the
debt counsellor. The rescheduling of Defendants’
debts is
contained in a document headed “Installment
(sic)
Offer
for Henry Cornelius Dege There is no allegation that this scheme was
approved by the plaintiff or that the steps prescribed
in section
86(8) were taken
It
is common cause moreover that no payments whatsoever were made to the
plaintiff. This is not explained. resumed. The Debt review
therefor
at the date action was commenced had been terminated, and has
remained so until now.
The
Defendents' affidavit does not therefor disclose a defence to
Plaintiff's claim.
There
will be judgment for the plaintiff.
The
order made is in terms of prayers 1,2,3, and4 of the draft
appearing at page 80 of the papers.