Firstrand Bank Ltd v Van den Berg (1662/09) [2009] ZAECPEHC 43 (1 September 2009)

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[2009] ZAECPEHC 43
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Firstrand Bank Ltd v Van den Berg (1662/09) [2009] ZAECPEHC 43 (1 September 2009)

FORM A
FILING SHEET FOR EASTERN CAPE,
PORT ELIZABETH
PARTIES
:
FIRSTRAND BANK LIMITED v SAMUEL JACOBUS VAN DEN BERG
NOT
REPORTABLE
Case
Number:
1662/09
High
Court:
PORT
ELIZABETH
DATE
HEARD:
18
AUGUST 2009
DATE
DELIVERED:
1
SEPTEMBER 2009
JUDGE(S):
EKSTEEN
AJ
LEGAL
REPRESENTATIVES –
Appearances:
for
the Plaintiff(s):
ADV
SCOTT
for
the Defendant(s):
MR
CURTAIN
Instructing
attorneys:
Plaintiff(s):
SPILKINS
Defendant(s):
J
R BESTER & ATTORNEYS
CASE
INFORMATION -
Nature
of proceedings
:
Key
Words
:
Summary:
IN
THE HIGH COURT OF SOUTH AFRICA
NOT
REPORTABLE
EASTERN
CAPE, PORT ELIZABETH
Case No.: 1662/09
Date
delivered: 1 September 2009
In
the matter between:
FIRSTRAND
BANK LIMITED
Plaintiff
and
SAMUEL JACOBUS
VAN DEN BERG
Defendant
JUDGMENT
EKSTEEN
AJ:
This is an
application for summary judgment. The plaintiff alleges that the
defendant is indebted to
it
in the amount of R697 577,59, being the principle debt together with
finance charges thereon due and owing by the defendant
to the
plaintiff in respect of monies lent and advanced. The loan is
secured by a bond passed by the defendant in favour of
the plaintiff
and registered over Erf 2446, Lorraine, Nelson Mandela Bay
Metropolitan Municipality.
The plaintiff
avers in its summons that it has complied with the provisions of the
National Credit Act, 34 of 2005, (herein “the
Act) and in
particular with sections 129 and 130 thereof. The plaintiff
accordingly claims payment of the aforestated amount
and an order
declaring the property especially hypothecated to be executable.
The defendant opposes the application for summary
judgment and has
filed an affidavit in support of his opposition. In paragraph 3 of
his opposing affidavit the defendant states
as follows:
“When I received summons on 25 June
2009 I sought assistance. I had heard about debt counselling and
although I did not receive
a section 129(1) notices averred in the
paragraph 1 of the particulars of claim I sought debt counselling.”
No other reference
is made to section 129(1) of the Act or to the notice envisaged in
the Act in the opposing affidavit. The
defendant does not deny that
the plaintiff has complied with the provisions of section 129(1) and
it was not argued before
me
that I should consider that section 129(1) has not been complied
with. In any event, it has been held that a notice in terms
of the
Act can be validly delivered even where it does not come to the
notice of the defendant (see
Marimuthi
Munien v BMW Financial Services (SA) (Pty) Ltd
,
as yet an unreported judgment, delivered in KwaZulu National Local
Division in case no. 16103/08 on 3 April 2009). In the
circumstances I do not consider that the defendant has raised any
facts which, if proved at the trial, would establish that the

plaintiff has not complied with the provisions of section 129(1).
The defendant does
not raise a defence to the plaintiff’s action or its application
to summary
judgment, but meets the application with an application in terms of
section 85 of the Act. In support hereof the defendant states
as
follows:
“3. I have been self-employed since
January 2009 in the building industry. However, due to the current
economic circumstances
there was not enough work available for me to
earn sufficient income to pay my obligations to credit providers.
When I received
this summons on 25 June 2009 I sought assistance. I
had heard of debt counselling and although I did not receive a
section 129(1)
notice as averred in paragraph 1 of the particulars
of claim I sought debt counselling.
4. On 26 June 2009
I attended upon the DebtSenseGroup debt counsellors and all my
creditors including the plaintiff were duly
informed of my
application for debt review in terms of section 86 of the NCA. I am
informed that once a summons is served the
provisions of section
130(3)(c) and section 88(3) of the NCA is no longer applicable.
5. The debt
counsellor made a thorough investigation and verified my financial
affairs the particulars of which was noted in Form
16 by the debt
counsellor as provided in Regulation 24(1)(a) and 9(b) of the NCA.
I attach a copy of the relevant pages of the
Form 16 marked ”SJB1”
as required by Regulation 24(3) of the NCA. I submit that it is
clear from the document which contains
my full financial position,
that I am over indebted. My debt counsellor found me to be over
indebted and duly informed the
credit providers of that fact by way
of form 17(1) which I attach hereto marked “SJB2”.
6. At this point
in time I am unable to pay my monthly obligations and the debt
counsellor is in the process of rearranging my
obligations. My
attorney informs me that, if I had sought the debt counsellors
assistance prior to the summons being issued
then the plaintiff
would not have had any choice but to be included in the debt review
process and that the only way to include
the plaintiff now is if the
Honourable Court refers this matter to the debt counsellor in terms
of section 85 of the NCA.”
The financial
affairs of the defendant are set out in the From 16 to which
reference is made in the affidavit and which is annexed
to the
affidavit. It is apparent from the said form that the defendant has
a total
monthly
income, after salary deductions, in the amount of R18 603. The Form
16 further contains a budget of necessary monthly
living expenses
which amount to R12 045. The defendant accordingly has an amount of
R6 557 per month available for payment to
credit providers.
The defendant’s
total liabilities amount to R908 288,49 and his current monthly
instalment
payments
on his debts amount to R18 151,36. The debt forming the subject
matter of the summary judgment proceedings constitutes
by far the
greatness debt amongst the defendant’s liabilities. The monthly
instalment payable at the time of the issue of
summons on the bond
forming the subject matter of the summary judgment proceedings
amounted to R7 000 per month. In these circumstances
the defendant
is plainly over indebted as envisaged in section 79 of the Act.
Section 85 of the Act provides as
follows:
“Despite any provision of law or
agreement to the contrary, in any court proceedings in which a
credit agreement is being considered,
if it is alleged that the
consumer under a credit agreement is over indebted, the court may-
(a) refer the
matter directly to a debt counsellor with a request that the debt
counsellor evaluate the consumer’s circumstances
and made a
recommendation to the court in terms of section 86(7); or
(b) declare that
the consumer is over indebted as determined in accordance with
this part, and make any order contemplated in
terms of section 87
to relieve the consumer’s over indebtedness.”
The Court is not
obliged to act simply on the defendant’s allegation of over
indebtedness. In
Firstrand
Bank Limited v Olivier
2009 (3) SA 353
Erasmus J, considering a similar application in
summary judgment proceedings stated as follows at page 361A-B:
“
The
question is therefore whether the court should exercise its
discretion in favour of granting that application. Certainly,
the
application must be
bona
fide
and not merely a delaying tactic, and the defendant must set out
sufficient information to support his allegation of over
indebtedness.”
In the present
instance the defendant has indeed approached a debt counsellor who
has found the defendant to be over indebted.
The defendant in his
opposing papers, however, makes no proposal as to how his debt could
conceivably be rearranged and no proposal
by the debt counsellor is
annexed.
It is one of the
express purposes of the Act as set out in section 3(g) thereof to
promote a fair, transparent, competitive, sustainable,
responsible,
efficient, effective and accessible credit market and industry, and
to protect consumers, by addressing and preventing
over indebtedness
of consumers and providing mechanisms for resolving over
indebtedness based upon the principle of satisfaction
by the
consumer of all
responsible
financial obligations. Any rearrangement of debt must accordingly
provide for the satisfaction by the consumer of
all responsible
financial debt. In the present matter reckless credit is not an
issue and all the defendants debt must be considered
to be
“responsible financial obligations”.
On the financial
assessment contained in Form 16 annexed to the opposing affidavit it
appears that the defendant has liabilities
totalling
R908 288,49. Even at a modest interest rate of 10% per annum
the interest on the outstanding debt far exceeds the amount
of R6
557 per month which the defendant has available for payment of
credit providers. Any extension of the period of repayment
would
therefore increase the defendant’s debt with each passing month.
In the circumstances it would appear,
prima
facie
,
that the defendant’s cash flow is simply insufficient to develop a
viable and responsible debt restructuring payment plan.
The
defendant has placed no information before me as to how he intends
to restructure his financial obligations in such a manner
that he
would ultimately satisfy all his responsible financial obligations.
I have already
stated above that the defendant’s major commitment is the
repayment
of the bond. His position would be greatly improved if he was
relieved of the bond instalment and his prospects of
a successful
debt restructuring would be considerably enhanced.
The defendant,
in
his opposing affidavit, states that he owes almost R700 000 to the
bank and if the house were to be sold on an auction it would
not
realise an amount of more that R350 000 and he would remain indebted
to the bank for the balance. Again no basis is laid
in the opposing
affidavit for this suggestion. The defendant does not state what
the original purchase price of the house was
nor is any current
valuation annexed.
In all the
circumstances I consider that the
defendant’s
case for a section 85 order is not persuasive and he has failed to
show good and sufficient reason for granting
the orders which he
seeks.
In the result, there will be judgment
in favour of the plaintiff as follows:
1.
Payment
in the amount of R697 577,59.
2. Payment of
interest on the said amount calculated at 13,3% per annum
and
compounded monthly as provided for in the bond number B120064/2006
with effect from 1 January 2009 to the date of payment,
both dates
inclusive.
3. An order
declaring executable the property specially hypothecated and
4. Costs of the
suit as between attorney and client, as provided for in terms of the
said bond.
_______________________
J W EKSTEEN
ACTING JUDGE OF THE HIGH COURT