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[2011] ZAECPEHC 3
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Notri Securitisation 3 (Pty) Ltd v Desmond (2274/10) [2011] ZAECPEHC 3 (15 February 2011)
IN
THE HIGH COURT OF SOUTH AFRICA NOT REPORTABLE
EASTERN
CAPE, PORT ELIZABETH
Case
No.: 2274/10
Date
Heard: 1 February 2011
Date
Delivered: 15 February 2011
In
the matter between:
NITRO
SECURITISATION 3 (PTY) LIMITED
…..............................................
Plaintiff
and
MELANIE
DESMOND
….............................................................................
Defendant
JUDGMENT
EKSTEEN
J:
[1] This is an application for summary
judgment in which the plaintiff seeks the immediate delivery to it of
a specified Mitsubishi
Colt 2400I 4x4 Trailbuste motor vehicle (“the
motor vehicle”).
[2] The plaintiff has alleged in its
summons that on 10 January 2007 Firstrand Bank Limited trading as
Wesbank (“Wesbank”),
entered into a written instalment
sale agreement (“the Agreement”) with the defendant. In
terms of the Agreement Wesbank
sold and delivered the motor vehicle
to the plaintiff.
[3] The Agreement provided for a
purchase price of R119 131,02 which was payable by way of an initial
payment of R27 000 and 54
monthly instalments thereafter. The
Agreement further provided for ownership of the motor vehicle to
remain vested in Wesbank until
the defendant has paid all amounts
under the Agreement. In the event that the defendant fails to pay any
amount which becomes due
to Wesbank, Wesbank would be entitled to
cancel the Agreement, to take possession of the motor vehicle, to
sell the motor vehicle
and to retain all payments already made to
Wesbank. In addition Wesbank would be entitled to claim the balance
payable from the
defendant as damages.
[4] The express terms of the Agreement
stipulate that the amount due at any given time would be proved by
the issue of a certificate
by one of its managers. In the event that
the plaintiff has to incur costs as a result of the defendant’s
failure to comply
with her obligations then, in terms of the
Agreement, the defendant would pay such costs on a scale as between
attorney and own
client.
[5] On 14 May 2007 Wesbank ceded all
its rights under the Agreement, including the right of ownership of
the motor vehicle, to the
plaintiff.
[6] The defendant in due course fell
considerably into arrears with her payments in terms of the Agreement
and in December 2009,
realising her predicament, she applied for debt
review in terms of section 86 of the National Credit Act, 34 of 2005
(“the
NCA”). The Agreement was included in the debt
review. The debt review was however not pursued with any sense of
urgency and
accordingly, when no progress had been paid the plaintiff
ultimately, as it was entitled to do, gave notice to the defendant
that
it was terminating the debt review process in terms of section
86(10) of the NCA. This notice the defendant states was delivered
to
her on 12th March 2010, after the lapse of 60 days from date of her
application for debt review.
[7] Following upon these events and in
consequence of the dilatoriness of the defendant’s debt
counsellors the defendant attended
upon new debt counsellors on 21
April 2010. She was advised by her new debt counsellors that due to
the payments made by her not
having been properly receipted her
application for debt review had not been timeously processed.
[8] On 22 April 2010 an application
was launched in the Magistrate’s Court for an order that the
debt review process should
resume as is envisaged in section 86(11)
of the NCA. On the same day, notwithstanding that the debt review
process had been terminated
as set out above, the defendant avers
that an application was “launched” in terms of section
86(7)(c) of the NCA for
an order restructuring her debt. It appears
therefore that the defendant, through her new debt counsellors
recognised on the one
hand, the valid termination of the debt review,
hence the section 86(11) application, and, on the other hand,
continued with the
debt review process as if the process had never
been terminated. Hence the section 86(7)(c) application.
[9] It appears that the plaintiff did
not immediately object to this process. On 13 July 2010, however,
after the lapse of more
than a further 60 days the plaintiff again
gave notice in terms of section 86(10) purporting again to terminate
the process. This
was followed by the issue of summons on 5 August
2010. In the summons the plaintiff gave notice that it had cancelled
the contract
and sought the return of the motor vehicle and certain
additional relief. The defendant entered an appearance to defend,
hence
the application for summary judgment. In the application for
summary judgment counsel for the plaintiff seeks only the return of
the motor vehicle and costs at this stage together with an order that
the remainder of the action be postponed
sine die
.
[10] Summary judgment proceedings are
governed by the provisions of rule 32 of the Uniform Rules of Court.
The procedure of summary
judgment has been the subject of much
discussion in many decision over a lengthy period of time. It has
frequently been described
as “extraordinary” or
“drastic”. The entire procedure again came under
consideration in the Supreme Court
of Appeal in
Joob Joob
Investments (Pty) Limited v Stocks Mavundla Zek Joint Venture
2009 (5) SA 1
(SCA) at 11G-12D where the following is stated:
“
The
rationale for summary judgment proceedings is impeccable. The
procedure is not intended to deprive a defendant with a triable
issue
or a sustainable defence of her/his day in court. After almost a
century of successful application in our courts, summary
judgment
proceedings can hardly continue to be described as extraordinary. Our
courts, both of first instance and at appellate
level, have during
that time rightly been trusted to ensure that a defendant with a
triable issue is not shut out. In the
Maharaj
case
at 425G-426E, Corbett JA was keen to ensure, first, an examination of
whether there has been sufficient disclosure by a defendant
of the
nature and grounds of his defence and the facts upon which it is
founded. The second consideration is that the defence so
disclosed
must be both
bona
fide
and good in law. A court which is satisfied that this threshold has
been crossed is then bound to refuse summary judgment. Corbett
JA
also warned against requiring of a defendant the precision apposite
to pleadings. However, the learned judge was equally astute
to ensure
that recalcitrant debtors pay what is due to a creditor.
Having regard to its purpose and
its proper application, summary judgment proceedings only hold
terrors and are 'drastic' for a
defendant who has no defence. Perhaps
the time has come to discard these labels and to concentrate rather
on the proper application
of the rule, as set out with customary
clarity and elegance by Corbett JA in the
Maharaj
case at
425G- 426E. “
[11] What the rule requires of a
defendant seeking to resist summary judgment is to set out the nature
and the grounds of his/her
defence and facts upon which it is founded
with sufficient clarity to satisfy the court of its
bona fides
.
The facts so set out, if proved at the trial, must make out a defence
which is good in law. If these requirements are satisfied
summary
judgment will be refused.
[12] In the present matter it is not
in dispute that the defendant is indeed in default of her obligations
due under the contract.
The plaintiff’s contractual rights are
set out above. Contractually the plaintiff was, on the admitted
facts, entitled to
cancel the contract. No contractual defence is
raised by the defendant. Rather the defendant places reliance upon
the provisions
of the NCA.
[13] The defendant states that section
130(3)(c) of the NCA required that a court may only determine a
matter dealing with the enforcement
of a credit agreement if the
court is satisfied that the relevant credit provider did not approach
the court during the time the
matter is before,
inter alia
a
debt counsellor. This, of course, is perfectly correct.
[14] The defendant then proceeds to
state that at the time that the plaintiff proceeded with legal action
an application in terms
of section 86(11) to reinstate her debt
review as well as an application for the restructuring of her credit
agreements was already
pending before the debt counsellor and the
Magistrate’s Court and that the plaintiff
had full knowledge of such application. The NCA, she records, states
further in
section 129(2) thereof that the provisions of section
129(1), and specifically section 129(1)(b) do not apply to an
agreement which
is subject to proceedings in a court and which could
result in an order restructuring the obligations under agreement.
Such proceedings,
she alleges, were pending in court and could have
resulted in an order restructuring the agreement. The plaintiff was
therefore,
so the argument goes, not entitled to terminate her debt
review and institute legal action.
[15] The salient facts which the
defendant contends underlie these defences are as follows:
15.1 Plaintiff sent a notice of
termination of the debt review in terms of section 86(10) on 12 March
2010.
15.2 An application in terms of
section 86(11) of the Act was served on the application on 29 April
2010 in order to reinstate the
debt review process.
15.3 The plaintiff did not oppose the
application in terms of section 86(11) and section 86(7)(c).
15.4 A further notice of termination
was sent by the plaintiff dated 13 July 2010. It is this notice to
which reference is made
in the summons.
15.5 By the time that the plaintiff
sent the second notice of termination an application in terms of
section 86(11) was already
pending in the Port Elizabeth Magistrate’s
Court.
15.6 At the time the plaintiff issued
the summons on which this application is based the application in
terms of section 86(11)
was still pending in the Magistrate’s
Court, Port Elizabeth.
[16] It is not in dispute that the
debt review process commenced during January 2010. At that stage the
matter was before a debt
counsellor. On 12 March 2010 the defendant
gave notice in terms of section 86(10) terminating the process. It is
unassailable that
this notice validly terminated the debt review
process. It is for this reason that a section 86(11) application
became necessary.
[17] The effect of a notice in terms
of section 86(10) is that the entire debt review process in respect
of the credit agreement
in issue is terminated. If the process is
validly terminated, as it was in this case, then the matter is no
longer before a debt
counsellor. The credit provider may then,
subject to the provisions of section 130(1) and of section 86(11),
proceed to enforce
the obligations of the credit consumer under the
credit agreement.
[18] In terms of section 86(11) a
Magistrate’s Court may order that the process resumes. Until
such order is made the process
is suspended and the matter is not
before a debt counsellor. A debt counsellor can accordingly take no
further effective steps
in terms of section 86 unless and until an
order is first obtained in terms of section 86(11) that the process
resume.
[19] In the current instance the
plaintiff did not object to the launching of the application in terms
of section 86(7)(c), however,
such application must be contingent
upon a resumption of the debt review process being authorised by the
Magistrate’s Court
hearing the matter. The application in terms
of section 86(7)(c) can accordingly not be said to be “pending”
until
an order in terms of section 86(11) has been obtained.
[20] In the circumstances I am of the
view that the notice of 12 March 2010 terminated the debt review
process. No order has been
obtained in terms of section 86(11) which
would reinstate such proceedings and accordingly there were no
proceedings in terms of
section 86(7)(c) pending before a debt
counsellor after the valid termination of the process. At the time of
the delivery of the
notice on 12th March 2010 no referral had
occurred in terms of section 86(7)(c). In my view such a referral
purporting to be in
terms of section 86(7)(c) which occurs after the
process has been terminated in terms of section 86(10) can have no
effect at all.
This is so because the entire process has been finally
terminated, save for its possible reincarnation if and when an order
is
obtained in terms of section 86(11).
[21] In these circumstances the notice
in terms of section 86(10) delivered during July 2010 was in my view
superfluous. To that
extent it may be invalid, however, it cannot
change the fact that, on the facts alleged by the defendant, the
process of debt review
had been validly terminated and no order has
yet been obtained that it may resume. It follows that I consider that
this defence
cannot be sustained.
[22] Section 129(2) of the NCA does
not assist either. The application in terms of section 86(11), which
was and is pending, is
not a proceeding which may result in the
restructuring order. The proceedings in terms of section 86(11), if
successful, may result
in a resumption of the debt review process, a
process which has been terminated in the interim. In all the
circumstances I consider
that the defendant has not set out facts
which, if proved at the trial, would constitute a good defence of
law.
[23] This, however,
is not the end of the enquiry. In terms of the provisions of rule
32(5) the court retains a general discretion
to refuse summary
judgment even where the affidavit in opposition thereto falls short
of the requirements of the rule. Such discretion,
it has been held,
should be exercised, not capriciously or on the basis of mere
conjecture or speculation so as to deprive a plaintiff
of the remedy
of summary judgment when entitled to it, but upon material before the
court from which it appears that a reasonable
possibility exists that
an injustice may be done if judgment is so granted.
(Compare
Breitenbach v Fiat SA (Edms) Beperk
1976 (2) SA 226
(T) at 229.)
[24] In the present case it is not in
dispute that the defendant had indeed launched an application in
terms of section 86(11) prior
to the issue of summons. Section 86(5)
requires of a credit provider to participate in good faith in a
credit review process and
in any negotiations designed to result in
responsible debt rearrangement. It seems to me therefore that where a
credit consumer
has set out sufficient facts in his/her opposing
affidavit to show that he has, upon receipt of a notice in terms of
section 86(10),
proceeded with the necessary expedition to obtain an
order in terms of section 86(11) and that he has reasonable prospects
of success
in such application, the court should be slow to grant
summary judgment in circumstances where the delay in finalising such
application
is attributable solely to the congestion of court rolls.
A credit provider who proceeds with undue haste to enforce his remedy
against a credit consumer who has been prevented access to the courts
by virtue of the numerous demands on the court rolls may be
considered not to act
bona fide
. In such circumstances I
consider that it may well be that a reasonable possibility exists
that an injustice would be done if summary
judgment were granted.
Each case must, however, be judged on its own facts.
[25] In the present matter the
application in terms of section 86(11) was launched during April
2010. The affidavit resisting the
summary judgment application was
attested to on the 10 December 2010, some seven months thereafter.
The application for summary
judgment was argued before me on 1
February 2011, more than nine months after the section 86(11)
application was launched. At this
stage the application has still not
come to finality. The defendant provides no explanation for the delay
other than to state that
the plaintiff does have remedies available
in the
Magistrate’s Court in order to oppose
any unreasonable postponement of an application. This, it is
contended, the plaintiff
did not do.
[26] On a consideration of the
explanation it does not appear to me to be in dispute that this
application in terms of section 86(11)
has not been pursued with any
measure of urgency.
[27] The purpose of
the NCA as set out in section 3 thereof envisages two major
objectives. The first is to promote a credit market
and industry
which is,
inter alia,
fair,
transparent, sustainable and responsible. The second is to protect
consumers. In doing so section 3(d) envisages the promotion
of equity
in the credit market by balancing the respective rights and
responsibilities of the credit providers and consumers. It
calls for
an equitable recognition of both the rights of the credit providers
and those of the consumer. In the present instance
the motor vehicle
in issue serves as security for the debt in respect of which the
defendant is in default. It is a depreciating
asset which the
defendant readily concedes in argument before me is being used by
herself on a daily basis. A further delay in
the realisation of its
security therefore holds the risk for the plaintiff of the
diminishing value of its security and the increasing
liability of the
defendant due to the escalating interest component of the debt.
[28] On a consideration of all these
issues I do not consider that this is a proper case for me to
exercise a discretion in favour
of the defendant.
[29] Finally the defendant seeks, if I
should hold against her, that the entire application for summary
judgment should be postponed
sine die
until such time as the
application in terms of section 86(11) has been finalised. For the
reasons which I have set out above in
respect of the exercise of my
discretion I do not consider that such an approach would be
equitable. In any event, the defendant
has made out no case
indicative of reasonable prospects of success in such an application.
I am not inclined to grant such an application.
[30] In all the circumstances the
following order is made:
1. The defendant is ordered forthwith
to return to the plaintiff the Mitsubishi Colt 2400I 4x4 Trailbuste
motor vehicle with chassis
number ABJK75ENR1E060258, engine number
4G64DM0066 and registration number CTM715EC, failing which the
sheriff is authorised to
attach the vehicle wherever he may find same
and to hand the vehicle to the plaintiff.
2. The defendant is ordered to pay the
costs occasioned by the hearing of 1 February 2011 on a scale as
between attorney and own
client.
3. The application in respect of the
remainder of the relief sought in the summons is postponed
sine
die
.
__________________________
J W EKSTEEN
JUDGE OF THE HIGH COURT
Appearances:
For Plainitff:
Adv C Mey
instructed by Rushmere Noach Incorporated, Port Elizabeth
For Defendant:
In Person,
Melanie Desmond