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[2010] ZAECPEHC 64
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Nedbank Ltd v Kruger (1896/2010) [2010] ZAECPEHC 64 (9 November 2010)
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT
ELIZABETH)
Case
No.: 1896/2010
Date
heard: 17 August 2010
Date
delivered: 9 November 2010
In the matter between:
NEDBANK
LIMITED
Plaintiff
and
FRANCOIS
KRUGER
Defendant
J U D G M E N T
DAMBUZA, J
:
The plaintiff seeks summary judgment
against the defendant for payment of the sum of R778,053.54,
interest at a variable mortgage
bond rate from 2 June 2010 to date
of payment, an order declaring Erf. 1105, Despatch, Nelson Mandela
Bay Municipality executable,
and costs of suite as between attorney
and client. The application is opposed.
It is not in dispute that the
defendant owes the amount claimed by the plaintiff. But the
defendant contends, that he has a
bona fide
defence to the
plaintiff’s claim. Although the defendant raises several
defects in the manner in which the claim is brought,
his overall
contention, as I understand it, is that the plaintiff has failed to
prove that it is entitled to proceed with litigation
enforcing the
credit agreement. The defendant takes issue firstly with the
failure by Jacques Pienaar, in the affidavit prepared
in support of
the application for summary judgment, to set out the source of his
authority to depose to the affidavit. In this
affidavit Pienaar
describes himself as the
“Manager – Mortgage Legal
Recoveries of the Plaintiff”
and states that he is duly
authorised to make the affidavit. It has been held that in the case
of artificial persons the deponent
to the supporting affidavit ought
to set out his authority for being of the application. But such
allegations in express terms
are not essential. See
East London
Municipality v BKK Meats CC t/a Heinz Meats
1993 (2) SA 67
(E)
72. In this case Pienaar establishes his authority by stating
expressly that he is duly authorised to make the affidavit.
Further, I am satisfied that by virtue of the position he holds
within the plaintiff he would naturally have the necessary
authority
to make the affidavit in question.
The defendant contends further that
there is no allegation in the summons that the plaintiff
delivered
the required notice as prescribed under sections 129(1)(b) and 130
of the National Credit Act, Act No. 34 of 2005 (”the
Act”).
Section 129(1)(b) of the Act provides that:
“
If
a consumer is in default under a credit agreement, the credit
provider-
subject
to section 130(2), may not commence any legal proceedings to enforce
the agreement before –
first
providing notice to the consumer, as contemplated in paragraph (a),
or in section 86(10), as the case may be; and
meeting
any further requirements set out in section 130.”
Section 130 of the Act provides that:
(1) Subject
to subsection (2), a credit provider may approach the court for an
order to enforce a credit agreement only if, at that
time, 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 129(1),
as the case may be.”
(my emphasis).
Further to the complaint that the
plaintiff has failed to state that the notice was delivered as
provided for in the Act, the
defendant complains that the
plaintiff’s particulars of claim is
“somewhat
confusing”
in that in one paragraph it alleges that it
“caused a notice of termination to be sent”
,
whereas in another paragraph it states that it terminated the debt
review
“by way of email/registered mail or fax”.
The defendant complains that the plaintiff fails to state which of
the methods if used and has not attached any proof of delivery.
It is common cause that during the
early months of 2010 the defendant applied for debt review in terms
of section 86(4)(b)(i)
of the Act. In a letter dated 26 January
2010, the debt counsellor advised the plaintiff together with the
defendant’s
other creditors of the success of the defendant’s
application for debt review. On 17 February 2010, the debt
counsellor
issued an application to the magistrate’s court for
an order re-arranging the defendant’s payments of his debts to
his credit providers. The application was set down for 17 March 2010
and the creditors, inclusive of the plaintiff, were advised
of the
set down in a letter dated 19 February 2010. In a letter dated 13
May 2010 the plaintiff recorded its receipt of notification
that the
defendant applied for debt review on 13 January 2010 and recorded
that 60 business days had lapsed since the inception
of the debt
review process. It warned that the debt review application would
be terminated within 10 business days from the
date of the letter if
the defendant remained in default under the two credit agreements
under review and requested proof of payment
made by the debtor.
There is however, no indication on the letter as to whom it was
addressed. On 1 June 2010 the plaintiff
addressed to the debt
counsellor, the defendant and the National Credit Regulator, a
letter headed
“Termination of Application for Debt Review
in terms of
Section 86(10)
of the
National Credit Act, No. 34 of
2005
”
. In that letter it terminated, in terms of section
86 (10) of the Act, the debt review process in respect of the Credit
Agreement
which is the subject of these proceedings. It appears
from the face of this letter that it was sent by e-mail to the debt
counsellor
and to the National Credit Regulator. It is addressed to
the defendant care of his physical address at 5 Bosman Street,
Despatch,
that being the same address that appears in the summons
and his
domicilium citandi et executandi
under the credit
agreement.
In the summons served on the
defendant on 8 July 2010, the plaintiff alleges that 60 business
days have lapsed since the inception
of the debt review process and
the defendant is in default under the credit agreement for a period
of more than 60 days. It
further contends that it caused a notice
of termination to be sent to the defendant on or about 13 May 2010.
The plaintiff
further pleads that 10 days has lapsed since delivery
of the section 86(10) notice and the defendant has neither raised a
dispute
nor surrendered the relevant property to the plaintiff as
contemplated in section 127 of the Act, nor has the defendant
brought
payment due under the credit agreement up to date and no
payment plan has been agreed to pursuant to such notice.
In terms of Rule
32 of the Rules of this Court, a defendant opposing an application
for summary judgment is required to satisfy
the court by affidavit
that he/she has a
bona
fide
defence.
All that the Court requires, in deciding whether the defendant has
set out a
bona
fide
defence is whether the defendant has disclosed the nature and
grounds of his or her defence and whether on the fact so disclosed
the defendant appears to have a defence which is
bona
fide
and
good in law.
1
Whether a defence is
bona
fide
or
not depends upon the merits of the defence as raised in the
defendant’s replying affidavit.
2
The defendant is not required to satisfy the court that his/her
allegations are believed by him/her to be true, it is sufficient
if
the defendant swears to a defence, valid in law,
in
a manner which is not inherently or seriously unconvincing.
3
If, for example, the defendant omits facts upon which a defence can
be based or sets out the facts upon which he or she relies,
in such
a manner that the court is unable to say that, if they are
established they will constitute a defence to the action or
part of
it he/she will fail in his/her defence.
4
Further a defendant will fail if it is clear from his/her affidavit
that he/she is advancing a defence simply to delay the obtaining
of
a judgment to which the defendant well knows that the plaintiff is
justly entitled.
5
The defendant contends that the
matter is still before (the magistrate’s) court and the
plaintiff is prohibited by the Act
from commencing any legal
proceedings to enforce the Credit Agreement. He relies on section
129(2) of the Act which provides
that:
“
(2) Subsection
(1) does not apply to a credit agreement that is subject to a debt
restructuring order, or to proceedings in a court
that could result
in such an order.”
I am not satisfied that on its own,
the failure by the plaintiff to state that the notice of termination
was
“delivered”
to the plaintiff as raised by the
defendant constitutes a
bona fide
defendant. The plaintiff
does state that it terminated the debt review
“by giving
notice to the defendant”
in its letter of
1 June 2010.
As I have stated, the letter is addressed to the defendant as well
as the debt counsellor and the National Credit
Regulator. It is in
this context that the averment in the plaintiff’s particulars
of claim that the termination notice
issued in terms of section
86(10) was sent by way of e-mail/registered mail or fax must be
viewed. I could find no prescribed
manner of
delivery
in the
Act except the reference in section 130(1)(a) to (notice) “
delivered
as contemplated in section 86(9) or section 129(1)”
. The
defendant does not rely on non compliance with a particularly
prescribed manner of delivery. And it is not the defendant’s
case, as I understand it, that he never received the notice of
termination.
As to whether it was proper for the
plaintiff to terminate the
“debt review”
or the
referral of the debt re-arrangement to the magistrate’s court,
it has been held that section 86(10) of the Act only
makes provision
for termination of a debt review prior to referral thereof to the
magistrate’s court in terms of section
86(7). Once the debt
review process has been referred, by a debt counsellor, with
recommendations to a magistrate’s court
for consideration,
section 86 (10) of the Act has no application. See
Standard
Bank of South Africa Limited v Kruger and Standard Bank of South
Africa v Pretorius,
unreported decisions of the South Gauteng
High Court, Case Nos. 09/45438 and 09/39057, 23 April 2010;
SA
Securitisation (Pty) Limited v Matlala
, an unreported decision
of the South Gauteng High Court, 29 July 2010;
First Rand Bank
Limited v Sally Ann Collett
and unreported decision of the
Eastern Cape High Court, Grahamstown, Case No. 1819/10, 2 September
2010. In these cases the Learned
Judges considered extensively the
provisions of section 86 of the Act and in particular the issue of
whether it is open to a
credit provider to issue a notice of
termination of a debt review process in terms of Section 86(10)
where the proposal for debt
re-arrangement has already been referred
to a magistrate’s court in terms of section 86(7). I am in
respectful agreement
with their decision(s) that it is not.
Consequently it was improper for the
plaintiff in this matter to issue a notice of termination in terms
of section 86 of the Act.
Once the debt rearrangement proposal was
referred to the magistrate’s court the credit provider was
obliged to await
the order of the magistrate’s court made
under s 87(1). But as held by Eksteen J in
First Rand Bank
Limited v Collett
(supra)
:
“
Where
a referral to the Magistrate’s Court is being prosecuted with
due efficacy it would appear to me that, more often than
not, it
would be inappropriate for the credit provider to serve a notice in
terms of section 86(10). There may however be circumstances
where
the debt counsellor and the consumer may intentionally delay the
hearing in terms of section 87 to the prejudice of the credit
provider whilst the consumer might cease all payments under the
credit agreement. In such circumstances the credit provider might
be justified in terminating the debt review process. Where, however,
the credit provider attempts to enforce the credit agreement
pursuant
to such notice the consumer is entitled urgently to approach the
magistrate hearing the matter to exercise his judicial
oversight.
Where justice requires the process will be ordered to resume.”
The manner in which the defendant has
set out his defence and, in particular, the history or progress of
the matter in the magistrate’s
court leaves me unconvinced
that he has a
bona fide
defence. It is not the defendant’s
case before me that, contrary to the allegations in the notices, he
did make payments
in terms of the debt review process.
Consequently I can only conclude that he has defaulted in terms of
the debt review arrangement
that was, according to the debt
counsellor, approved. It follows therefore that the requisite
circumstances set out in section
88(3) were fulfilled and the
plaintiff was entitled to proceed. Section 88(3) of the Act
provides that:
“
(3)
Subject
to section 86 (9) and (10), a credit provider who receives notice of
court proceedings contemplated in section 83 or 85,
or notice in
terms of section 86 (4) (b) (i), may not exercise or enforce by
litigation or other judicial process any right or
security under that
credit agreement until-
(a)
the consumer is in default under the credit
agreement; and
(b)
one of the following has occurred:
(i)
An event contemplated in subsection (1) (a)
through (c); or
(ii)
the consumer defaults on any obligation in terms of a
re-arrangement agreed between the consumer and credit providers,
or
ordered by a court or the Tribunal.”
Further as I have stated the
defendant merely states that the matter was enrolled (for hearing in
the magistrate’s court)
on a date prior to the expiry of a
period of 60 days after the inception of the debt review process.
Although the date of set
down was 17 March 2010 and the answering
affidavit is dated
5 August 2010 there is no explanation in the
defendant’s affidavit as to what happened on 17 March 2010 or
thereafter. His
bald allegation that
“the matter is before
a debt counsellor”
does not, in my view, set out a defence
good in law. I am not in a position to conclude on the bare
allegations before me,
that at a trial a defence would be
established to the plaintiff’s claim or some portion thereof.
It might be that on 17 March 2010 the
recommendation by the debt counsellor was rejected by the
magistrate’s court or some
other order was granted as provided
for under section 87(1)(b) of the Act; or the matter was, for some
reasons postponed and
still remains unheard or was never heard and
the application has since lapsed. Whatever the position it was
incumbent upon
the defendant to place before me such facts form
which I would be able to determine that the matter is indeed still
pending in
the magistrate’s court and is being prosecuted with
due efficacy.
Consequently the following order
shall issue:
Payment of the sum of R778,053.54
Payment of interest on the said
amount of R778,053.54 at the variable mortgage bond rate, currently
8.20% per annum, charged
by the plaintiff from time to time, from
2
nd
June 2010 to date of payment.
An order declaring executable the
immovable property specially hypothecated being:
Erf
1105 Despatch
In
the Nelson Mandela Metropolitan Municipality, Division of
Uitenhage, Province of the Eastern Cape
In
Extent :
854
(Eighty Hundred and Fifty Four) Square Metres
Held by Deed of Transfer No.
T.93532/2004
Costs of suit to be taxed, as
between Attorney and client.
_________________________
N. DAMBUZA
JUDGE OF THE HIGH COURT
Appearances
:
For the plaintiff: Adv G.J. Gajjar
instructed by Pagdens Attorneys of Port Elizabeth
For the defendants: Mr A. Curtain
instructed by J R Bester & Associates Attorneys of Port Elizabeth
1
Maharaj v Barclays National Bank Limited
1976 (1) SA 418
(AD)
at 426.
2
Silverleaf Pastry and Confectionery Co (Pty) Ltd v Joubert and
Another, NNO
1972 (1) SA 125
(C) at 129.
3
Breitenbach v Fiat SA (Edms) Bpk
1976 (2) SA 226
(T).
4
Trust Bank of Africa Ltd v Wassenaar
1972 (3) SA 139
(D) at
144.
5
Van Eeden v Sasol Pensioenfonds
1975 (2) SA 167
(O).