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[2011] ZAGPPHC 191
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Firstrand Bank Ltd t/a Wesbank v Nel (7170/10) [2011] ZAGPPHC 191 (14 September 2011)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
NO: 7170/10
DATE:14/09/2011
In
the matter between:
FIRSTRAND
BANK LTD t/a
WESBANK
.......................................................................
Applicant
and
NEL
ANNELIZE
MARIEN
........................................................................................
Respondent
JUDGMENT
MNGQIBISA-THUSI
J
[1]
In its notice of motion the applicant is seeking an order on the
following terms:
1.1
confirmation of the cancellation of the agreements;
1.2
that the sheriff be authorised and directed to forthwith attach and
take into his possession a 2006 Volkswagen Polo classic
1.6 Trendline
with chassis number AAVZZZ9NZ6U054376 wherever it may be found and to
hand same over to the applicant;
1.3
leave be granted to approach the court on the same papers duly
supplemented for the payment of the difference between the balance
outstanding and the market value of the goods in the event of there
being a balance outstanding by the respondent to the applicant;
1.4
directing the respondent to pay the costs of this application on the
scale as between attorney and client;
1.5
postponing this application sine die in respect of the relief sought
in prayers 1.3 and 1.4 above;
1.6
further and alternative relief.
[2]
The respondent is opposing the application on the following grounds:
2.1
that the respondent was not in default of her payments; and
2.2
that at the time the applicant issued the section 86(10) notice, it
was not entitled to terminate the debt review since her
debt
counsellor had already concluded that the respondent was
over-indebted and had referred the matter to a magistrate's court,
together with a debt restructuring proposal, recommending that the
respondent be declared over-indebted.
[3]
The respondent also raised the fact that the applicant had not issued
her with a section 129(1) (a) notice.
[4]
Furthermore, the respondent prays that should I find that the
applicant was entitled to terminate the debt review, I should
make an
order renewing the debt review in terms of section 86(11) and set the
conditions under which the magistrate's court should
deal with the
matter, in view of her over-indebtedness.
[5]
On 22 November 2007 the applicant and the respondent concluded an
instalment sale agreement ("the agreement") in terms
of
which the applicant sold to the respondent a second hand 2006
Volkswagen Polo classic 1.6 Trendline motor vehicle ("the
motor
vehicle). The agreed purchase price was the amount of R119 995.00.
[6]
The agreement provided,
inter alia,
that:
6.1
the respondent would pay an initial deposit of R 30 000.00;
6.2
the balance to be payable in 58 monthly instalments of R 2 453.19
each, with the first instalment due on 22 November 2007;
6.3
ownership of the vehicle to remain with the applicant until payment
of the last instalment;
6.4
in the event of the respondent defaulting in her payments or be in
breach of the agreement, the applicant would be entitled
to cancel
the agreement, obtain return of the vehicle, retain payments already
made and/or recover damages.
6.5
the respondent's chosen domicilium address was 208 Vias Street,
Doornpark, Pretoria.
[7]
It is not in dispute that:
7.1
the agreement between the parties is a credit agreement in terms of
section 1 of the National Credit Act 34 of 2005 ("the
Act");
7.2
the respondent is in default of her payments in terms of the
agreement;
7.3
the applicant is entitled to cancel the agreement in the event of the
respondent being in material breach of the agreement.
7.4
on 1 July 2010 the applicant applied to a debt counsellor for debt
review in terms of section 86(1) of the Act.
7.5
on 5 October 2009, 60 days after the applicant's application for debt
review, the respondent issued a notice in terms of section
86(10)
terminating the debt review;
7.6
the respondent has received the section 86(10) notice from the
applicant.
[8]
On or about 9 February 2010 the applicant launched these proceedings
on the basis that the respondent has repudiated the agreement
in that
she is in default of her repayment of the loan, alternatively, that
she has materially breached the agreement by failing
to make payments
when due. It was further submitted on behalf of the applicant that as
of 4 January 2010, the respondent was in
default of payments in the
amount of R9 841.76.
[9]
The respondent denies that she is in default of her payments. It was
submitted on her behalf that the respondent has been making
payments
in terms of a debt restructuring plan devised by the debt counsellor
and was, therefore, not in default. As proof thereof,
a schedule of a
proposed plan for repayments was handed up in Court. What this
schedule indicates is a list of payments to be made.
However, there
is no evidence as to whether any payments were made and if they have,
how much had already been repaid.
[10]
The respondent, besides handing over a page titled "Proposal for
rearrangement", has not provided information, besides
allegations made from the bar that she has been paying in terms of
the said proposal. No information was provided as to how much
has
been paid and whether, whatever might have been paid removes the
default of the respondent. The respondent has not disputed
the
allegation made by the applicant that by 4 January 2010, the
respondent was in arrears to the amount of R9 841.76. All I have
before me is the uncontroverted evidence of the applicant that the
respondent is in default. For these reasons this ground raised
by the
respondent is dismissed.
[11]
The second submission" "made on behalf of the-respondent is
that since the respondent's debt review was already referred
to the
magistrate's court for a section 86(7) (c) order, the applicant was
not entitled to terminate the debt review.
[12]
The issue to be determined is whether the applicant was entitled to
terminate the debt review in terms of section 86(10) of
the Act
whilst the respondent's matter in terms of section 87 of the Act is
stiil pending before another Court.
[13]
Section 86(10) of the Act reads as follows:
"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 days after the date on which the consumer
applied for the debt review."
[14]
The Supreme Court of Appeal In Sally Ann Collett v FirstRand Bank
Ltd, an unreported judgment, case number 766/2010, on 27
May 2011,
agreed with the conclusion reached by the Court in FirstRand Bank v
Coilett 2010(6) SA 351 (ECG) at 357 where the Court
stated as
follows:
"I
am unable to find anything in the structure of s 86, or of the Act in
its entirety, which is indicative of an intention
on the part of the
legislature to limit the right of a credit provider under s 86(10) to
the process prior to_the reference to
the magistrates' court. On the
contrary, for the reasons which follow, I consider that the credit
provider's rights to give notice
in terms of s 86(10) and to
legitimately terminate the debt review process continue until the
magistrates' court has made an order
as envisaged in s 87."
[15]
The Supreme Court of Appeal in the Coilett matter (supra) further
held that:
"[14]
The conclusion that the right of a credit provider to terminate the
debt review under s 86(10) can be exercised even
after a referral to
the Magistrate's court, does not lead to the anomalous result
contended for on behalf of the amicus curiae.
While it is correct to
say that s 87(1) requires that the magistrate's Court 'must conduct a
hearing', it is not correct to argue
that termination of a debt
review terminates the hearing. Section 86(10) entitles a credit
provider to terminate the debt review
relating to a specific credit
agreement ('[i]f a consumer is in default under a credit agreement
that is being reviewed'), not
the 'hearing'. The hearing continues
and, if several credit agreements are being reviewed, continues in
respect of the others.
Although notice of termination of the debt
review is not required to be given to the Magistrate's Court but only
to the consumer,
debt counsellor and the national credit regulator,
the proceedings are governed by the Rules of the Magistrates' Courts
which makes
adequate provision for the service of process and
notices."
[16]
I am of the view, in the light of the Collett decisions, that the
applicant was entitled to terminate the debt review after
the lapse
of the period stipulated in the section. See further in this regard
FirstRand Bank t/a FNB v Seyffert 2010(6) SA 429
(GSJ). The fact that
the credit provider has terminated the debt review does not deprive
the respondent of the remedy in section
86(11) in that the
magistrate's court where the respondent's application for debt review
is pending can still make an order resuming
the debt review if there
is cause to do so.
[17]
The respondent has also raised as an alternative ground should I find
that the applicant was entitled to terminate the debt
review in terms
of section 86(10) that i should make an order in terms of section
86(11) of the Act for the resumption of the credit
review in the
magistrate's court on certain terms and conditions.
[18]
Section 86(11) of the Act reads as follows:
"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."
[19]
As indicated in paragraph 16 above and in view of the fact that as at
the time of this hearing the debt review was still pending
before the
magistrate's court, that court on considering the respondent's
position might come to the conclusion that the debt review
be
resumed. The respondent has not provided this court with any
information regarding her position in relation to her financial
means, financial prospects and obligations as contemplated in section
79 of the Act. I am therefore not in a position to make a
determination in this regard.
[20]
The respondent has also raised the point that the applicant is not
entitled to enforce the agreement as it has not served her
with a
section 129(1) (a) notice. Section 129(l)(a) provides that:
"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
counsellor, alternative dispute resolution agent, consumer court or
ombud with jurisdiction, with the intent that the parties
resolve any
dispute under the agreement or develop and 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."
[21]
Further, section 130(l)(a) and 130(l)(b)(i) of the Act reads as
follows:
"130
Debt procedures in Court
(1)
Subject to subsection (2), a credit provider may approach the court
for an order to enforce a credit agreement only if, the
consumer is
in default and has been in default under the 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)
...
(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."
[22]
In terms of section 129(l)(b) read with section 130 of the Act a
credit provider is prevented from enforcing a credit agreement
until
it has satisfied certain requirements, inter alia, giving notice in
terms of section 86(10). In this matter the applicant
has complied by
giving notice in terms of section 86(10) of the Act and nothing
prevents the applicant from enforcing its rights
in terms of the
agreement.
[23]
In terms of the agreement the respondent's default is a material
breach of the agreement entitling the applicant to cancel
the
agreement and getting back the motor vehicle which in any event is
still under the ownership of the applicant as the respondent
has not
paid all the required instalments.
[24]
Accordingly the following order is made:
1.
The instalment sale agreement entered into between the applicant and
the respondent dated 22 November 2007 is confirmed as cancelled;
2.
the sheriff is authorised and directed to forthwith attach and take
into his possession a 2006 Volkswagen Polo classic 1.6 Trendline
with
chassis number AAVZZZ9NZ6U054376 wherever it may be found and to hand
same over to the applicant;
3.
leave is granted to approach the Court on the same papers duly
supplemented for the payment of the difference between the balance
outstanding and the market value of the goods in the event of there
being a balance outstanding by the respondent to the applicant;
4.
the respondent is directed to pay the costs of this application on
the scale as between attorney and client;
5.
the relief in 3 and 4 above is postponed sine die.
NP
MNGQIBISA-THUSI J
Judge
of the North Gauteng High Court