Nedbank Ltd v Barnard (1142/08) [2009] ZAECPEHC 45 (1 September 2009)

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[2009] ZAECPEHC 45
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Nedbank Ltd v Barnard (1142/08) [2009] ZAECPEHC 45 (1 September 2009)

FORM A
FILING SHEET FOR EASTERN CAPE,
PORT ELIZABETH
PARTIES
:
NEDBANK LIMITED V CLIFFORD NEIL BARNARD
NOT
REPORTABLE
Case
Number:
1142/08
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):
ADV
GAJJAR
Instructing
attorneys:
Plaintiff(s):
BOQWANA
LOON & CONNELLAN
Defendant(s):
LISTON
BREWIS & CO
CASE
INFORMATION -
Nature
of proceedings
:
Key
Words
:
Summary:
IN
THE HIGH COURT OF SOUTH AFRICA
NOT
REPORTABLE
EASTERN
CAPE, PORT ELIZABETH
Case No.: 1142/08
Date delivered: 1 September 2009
In
the matter between:
NEDBANK
LIMITED
Plaintiff
and
CLIFFORD NEIL
BARNARD
Defendant
JUDGMENT
EKSTEEN
AJ:
On 11 October 2005
the plaintiff entered into a written agreement with the defendant in
terms of which the plaintiff lent
and
advanced to the defendant an amount of R850 000. The loan was
repayable in monthly instalments and the balance outstanding
from
time to time was to bear interest at 1% below the plaintiff’s
mortgage bond rate, as varied from time to time.
In terms of the written agreement the
plaintiff would be entitled to forthwith to claim payment of all
amounts owing to it together
with interest in the event of the
defendant being in breach of any conditions. The loan was duly
secured by the registration
on 23 November 2005 of a mortgage bond
over his property, Erf 479 Walmer, in the Nelson Mandela
Metropolitan Municipality.
In breach of his
contractual obligations the defendant fell in arrears with the
monthly instalments which he had undertaken to
pay. In these
circumstances, on 3 December 2007, the plaintiff, who is a credit
provider as envisaged in the National Credit
Act 34 of 2005
(hereinafter referred to as “the Act”) addressed a notice to the
defendant drawing his attention to the terms
of the agreement and
his default. The notice bears a bold
inscription
at the top of the page which includes the following:
“Notice of
default in terms of
section 129(1)
of the
National Credit Act
…
and of suspension of facility”.
The body of the letter reads as
follows:
“We confirm that
you are in default on t
he
terms of the agreement in that you are in arrears with both the
November and December instalments on your repayments. The
total
arrears is R36 094,36.
Accordingly,
should the full arrear amount not be paid within 10 (TEN) business
days from the date of this letter, the full amount
owing, namely the
amount of
R1
373 391,92
plus interest at the rate of
13%
(Prime – 1%)
,
calculated on the daily balance and capitalised monthly from
4
December 2007
to
date of payment, both days inclusive, is now due and payable.
As a result of the aforementioned
default your access to credit, if any, in terms of the agreement is
suspended with immediate
effect. You are advised to ensure that the
necessary alternative arrangements are made with regard to any
payment mandates operating
on the account, as these mandates will
not be executed.
We propose that you refer the
agreement to a debt counsellor, alternative dispute resolution
agent, consumer court or bank ombudsman,
with a view to resolving
any dispute under the agreement or developing and agreeing to a plan
to bring the payments under the
agreement up to date.
Should you not do
so and not pay the amount within 10 (TEN) business days from the
date to delivery of this letter to you, legal
proceedings to enforce
compliance with your obligations under the agreement will be
instituted against you without further notice
...”
Notwithstanding
the aforegoing demand the plaintiff alleges that the defendant
remained in default. In the circumstances, on
4 June 2008
,
the plaintiff issued summons in which he claims payment of the
outstanding amount of R1 399 079,99 together with interest thereon

and an order in terms of which the property bonded by the defendant
in favour of the plaintiff be declared specially executable.
The
defendant duly entered an appearance to defend. In response hereto
the plaintiff issued summary judgment proceedings.
The defendant does
not dispute his liability nor the extent thereof. He raises three
defences. As a result of the conclusion
to which I have come I
shall only consider the second defence.
The
essence of this defence is set out below. The defendant alleges
that he is unable to recall having received the notice in
terms of
section 129 of the Act, however, he does not dispute receipt
thereof. Realising his default the defendant states that
during
December 2007 he paid an amount of R24 000 to the plaintiff. As a
result of financial difficulties which he experienced
he did not pay
any instalment in January, February or March 2008. He did however
pay an amount of R18 000 on 3 April 2008 and
a further amount of R20
000 on 5 May 2008.
Summons was issued
on 4 June 2008 and served on the defendant on 5 June 2008. The
defendant avers that during June 2008 he telephoned
Mr Peet Burger
of the
plaintiff’s
legal department and enquired as to the outstanding arrears as at 30
June 2008. Mr Burger advised that the arrears
at that date were
approximately R54 000. With this information he then proceeded to
make a payment on 30 June 2008 in the amount
of R70 000. He alleges
that with this payment the entire arrears were extinguished.
Subsequent to June 2008 he made the
following payments:
(a) 2 August 2008 - R18 000,00
(b) 17 September - R20 000,00
(c) 6 December - R18 500,00
(d) 2 January 2009 - R18 940,00
(e) 4 February 2009 - R18 000,00
(f) 17 March 2009 - R13 004,40
(g) 3 June 2009 - R12 800,00
(h) 1 July 2009 - R12 800,00
On this basis the
defendant submits that all amounts overdue in terms of the agreement
concluded between the parties
have
been paid, together with any amounts which the plaintiff may have
debited to the account in respect of default charges or
reasonable
costs of enforcing the agreement. In support hereof the defendant
has annexed a “loan statement” issued by the
plaintiff on 30
April 2009 in respect of the period 1 April 2009 to 30 April 2009.
The statement reflects that there are no
overdue amounts owing.
Reliant on the
aforestated the defendant contends that, accepting the correctness
of the notice issued by the plaintiff in December
2007, the
agreement
has been reinstated in terms of the provisions of
section 129(3)
of
the
National Credit Act, 34 of 2005
.
On behalf of the
plaintiff it is argued that the submission by the defendant that all
arrears together with any default charges
and reasonable costs of
enforcing the agreement have been
extinguished
is not capable of belief. In support hereof Mr
Scott
,
who appears on behalf of the plaintiff has made a calculation of
amounts which he contends would have fallen due and compared
this
amount with the admitted payments set out in the affidavit. For
purposes of this calculation reliance has been placed on
a notice
issued by the plaintiff to the defendant dated 25 March 2009
indicating a change in interest rate. It is apparent from
the
notice that the interest rate applicable to the loan was reduced
from 13% to 12% with effect from 1 April 2009. The effect
thereof
would be to reduce the monthly instalment from R14 626,94 to
R13 642,90. It is further apparent from the notice
issued by the
plaintiff on 3 December 2007 that the applicable interest rate
at that time was 13%. On this basis Mr
Scott
has assumed for purposes of his calculation that a constant monthly
instalment of R14 600 would have fallen due throughout the
period up
to 1 April 2009. The calculation done reveals that on the admitted
payments the defendant remained in arrears at all
times, save in
September 2008 when his account would have been in credit by an
amount of approximately R2 000.
The exercise set
out a
bove
is a useful one, however, the difficulty with such calculation is
that we do not know what fluctuations in the interest rate
may have
occurred between December 2007 to April 2009. I would accordingly
be disinclined to reject the defendant’s figures
merely on the
strength of this exercise. Even on an acceptance of this
theoretical calculation there is at least one occasion
that the
account was in credit. The defendant’s contentions are
furthermore supported by the “loan statement” issued by
the
plaintiff in April 2009 which indicates that there were at that time
no arrears at all in respect of repayments on the loan
account. In
the circumstances on the evidence which is before me on oath and
documents issued by the plaintiff itself it seems
to me that at best
for the plaintiff, there must be a reasonable prospect of
establishing at the trial that plaintiff has acknowledged
by its
“loan statement” that there were no overdue amounts owing in
April 2009.
Section 129(3) of
the Act provides, subject to subsection (4), that a consumer may
;
“(a) at any time
before the credit provider has cancelled the agreement reinstate a
credit agreement that is in default by paying
to the credit provider
all amounts that are overdue, together with the credit providers
permitted default charges and reasonable
costs of enforcing the
agreement up to the time of reinstatement; and
(b)
….”
Subsection (4) finds no application to
the present facts.
It is not in
dispute that the plaintiff has not cancelled the agreement. On
behalf of the plaintiff it is argued that a defendant
who wishes to
reinstate an agreement in terms of section 129(3) must first
approach a credit provider in order to ascertain the
extent of his
overdue indebtedness, as well as the extent of the aforesaid default
charges and reasonable costs of enforcing
the agreement and must
advise the credit provider that he intends reinstating such an
agreement by paying the amounts so due.
The agreement cannot, so
the argument goes, be automatically reinstated merely by the
consumer paying all the said amounts.
I am unable to
find anything in the section which requires a consultative process
of this nature before a credit agreement could
be reinstated. The
express provision of the section is that the agreement will be
reinstated “by paying to the creditor provider
all amounts that
are overdue …”. I consider that the consumer can unilaterally
reinstate the agreement
merely by making payment of sufficient amounts of money to cover all
the charges referred to in section 129(3). Once that has
occurred I
am of the view that the agreement is automatically reinstated. The
mere fact that such payments are made would be
sufficient for a
credit provider to infer the intention of the defendant to reinstate
the contract.
The defendant in
the present matter is unable to state what the permitted default
charges and reasonable costs of enforcing the
agreement up until 13
June 2007 were. The defendant, however, submits that having paid an
amount of R26 000
more
than that which the plaintiff had advised was overdue on 30 June
2008, he did cover those expenses. The payment made would
have to
be allocated on the basis set out in
section 126(3)
of the
National
Credit Act which
provides for the payment to be applied firstly to
satisfy any due or unpaid interest charges, secondly to satisfy any
due or
unpaid fees or charges and thirdly, to reduce the amount of
the principle debt. Having applied this payment, and the subsequent

payments, in this fashion a loan statement was issued by the
plaintiff in April 2009 that there were no arrears. In these

circumstances, if the loan statement is proved to be correct, then
the agreement would not only have been reinstated but, as of
April
2009 it would appear that the defendant had not fallen in arrears
again.
On
the view which I have taken it appears to me that in the event of
the defendant establishing the facts set out in his second
defence
at trial it would constitute a valid defence in law. In the
circumstances I consider that the defendant should be granted
leave
to defend. By virtue of this finding it is not necessary for me to
consider the first and third defences raised and I
express no view
on these defences.
In the result the order which I make
is the following:
1. The application for summary
judgment is dismissed.
2. The defendant is given leave to
defend and
3. The costs of the summary judgment
application are to be costs in the action.
______________________
J W EKSTEEN
ACTING JUDGE OF THE HIGH COURT