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[2012] ZAECPEHC 33
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Standard Bank of South Africa v Daya NO and Others (540/2012) [2012] ZAECPEHC 33 (24 May 2012)
7
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE, PORT
ELIZABETH
CASE NO. 540/2012
Date heard: 22 May 2012
Date Delivered: 24 May
2012
In the matter between:
THE STANDARD BANK OF
SOUTH AFRICA
….........................................
APPLICANT
AND
SUNIL RANCHOD DAYA N.O
( in his capacity as Trustee for the
..............
First resp.
Time being of Sunrise
Nishtash Family Trust, IT 147/1998)
RASEELA DAYA N.O. ( In
her capacity as Trustee for the
….................
Second
resp.
Time being of Sunrise
Nishtash Family Trust, IT 147/1998)
SUNIL RACHOD DAYA
….....................................................................
Third
respondent
RASEELA DAYA
….............................................................................
Fourth
respondent
JUDGMENT ON
APPLICATION FOR SUMMARY JUDGMENT
DAMBUZA, J
[1] The plaintiff seeks
an order of summary judgment against the defendants for payment of
R890 640,22 and interests on R632 000,00
of that amount at 8,9% per
annum, plus interest on R158 000,00 of the amount claimed at 10.45%
per annum. An order declaring the
defendants’ property
executable is also sought, together with an order for payment of
costs on an attorney and client scale.
[2] The plaintiff’s
claim is founded on credit agreements concluded by the parties in
Port Elizabeth on 4 April 2008. In terms
of a loan agreement
concluded on that day the plaintiff lent and advanced to the Sunrise
Nishtash Family Trust (the Trust) an amount
of R853 200,00 which was
to be repaid in monthly instalments of R10 275,37. As security for
the loan a mortgage bond was registered
in favour of the plaintiff in
the amount of R853 200,00, over an immovable property described as
the Remainder of Erf 7 Westering,
Port Elizabeth. Further, the third
and fourth respondents, (who are the Trustees of the defendant Trust)
executed a written Deed
of Suretyship in favour of the plaintiff,
binding themselves as sureties and co-principal debtors for all
repayments under the
loan agreement.
[3] In the summons the
plaintiff alleges that “
the Trust failed to make payments
to the plaintiff in terms of the foresaid order
( a debt -
restricting order)” and that as at 1 February 2012, when the
proceedings were launched, the Trust was in arrears
with payments
under the credit agreement to the amount of R30 392,02.
[4] In the answering
affidavit, the third defendant states that he, being the person
primarily responsible for making repayment
instalments of the loan,
became over-indebted. It is not in dispute that the third and fourth
respondents obtained a debt re-arrangement
order on 22 October 2010
in the Port Elizabeth Magistrates Court. The monthly instalment
payable by the defendants in terms of
the debt review order was R19
733,00.
[5] According to the
third defendant he then “
made
regular and timeous
payments”
to DC Partner, a payment
Distribution Agent. However,
several
notices of default were received by the defendants’ debt
counsellor, from Nedbank, another creditor of the defendants.
As a
result thereof and for fear that the creditors might move for
cancellation of the debt re-arrangement order,
on
2 November 2011, an application was launched in terms of section 36
of the Magistrates Court Act 32 of 1944, for variation of
the debt
re-arrangement order. The intention was to have the amount payable
thereunder, increased. On 11 November 2011 the plaintiff
caused to be
served upon the third defendant a
“
Notice
of Termination”
in
terms of section 88(3) of the National Credit Act 34 of 2005 ( the
Act).
1
On 8 February 2012 the
debt-rearrangement order was varied by increasing the instalment
payable under thereunder to R20 833,00.
On 16 February 2012 the
defendants received the summons in this case.
[6] It is trite that the
remedy of summary judgment is an extraordinary relief and a very
stringent one in that it closes the doors
of the court to the
defendant and permits a judgment to be granted without a trial
2
.
But a defendant who seeks to avoid summary judgment against him or
her, must satisfy the court that he or she has a
bona
fide
defence
to the plaintiff’s action. The defence must be good in law.
[7] By now it has become
firmly established in our law that the proper interpretation of
section 88(3)
of the
National Credit Act is
that once the credit
review process has commenced in respect of a particular credit
agreement, a credit provider can only enforce
that agreement if the
consumer is in default under the credit agreement
AND
when
either,
an
event contemplated under
section 88(3)(1)(a)
has occurred,
or when the consumer
defaults on any obligation in terms of a re-arrangement agreement
between the consumer and the credit providers
or a debt
re-arrangement order.
3
As I have stated,
in this case the
plaintiff relies on the latter.
[8] In their answering
affidavit the defendants refer to a schedule of payments extracted
from the ledger of the Payment Distribution
Agent,
which, according to them
shows that from April 2010, prior to the debt re-arrangement order
being granted, they have made regular
monthly payments to the Payment
Distribution Agent. The schedule, records that during the 16 months
starting from November 2010
(the month immediately following the debt
re-arrangement order) until 22 February 2012,
when
the summons was issued, 15 instalments of R20 033,00 per month
were made by the defendant(s) to the Payment Distribution
Agent
(
PDA
).
A further instalment was paid on 22 February 2012, subsequent to
service of summons on the defendants.
[9] Mr Smith who appeared
on behalf of the plaintiff submitted that even if I were to accept
that monthly payments were made to
the
PDA
in the amount stipulated
in the order, the defendants remain in breach of the debt
re-arrangement order as payments were made later
than the date
specified in the order. Indeed that much is apparent from the
schedule. The order provides that payments are to be
made on the 5
th
day of the month.
However, I am not satisfied that on that,
basis
alone,
an
order of summary judgement is justifiable in this case.
[10] Firstly it is
significant in my view that the plaintiff only alleges in the summons
that
“
the
Trust failed to make payments to the plaintiff in terms of the
aforesaid order”
it
is common cause that the
PDA
’
s
are “
responsible
for collecting and distributing renegotiated payments for and on
behalf of customers to credit providers”
4
Further the plaintiff
does not set out in the summons the respects in which the defendants
“
failed
to make payment”
in
terms of the order.
[11] A submission is made
in the plaintiff’s supplementary Heads of Argument that the
defendants’ breach resulted in
the plaintiff receiving a lower
instalment than that stipulated in the debt re- arrangement order. As
proof thereof, a schedule
of amounts received, drawn on behalf of the
plaintiff, shows that from October 2010 the plaintiff has
consistently received less
than the amount of R4500 stipulated in the
order as the instalment due to the plaintiff. According to this
schedule for most months
during this period the plaintiff received
R4 471,50; in some months the plaintiff received instalments of
about Three Thousand
Rand. However it does not appear to be in
dispute that during this whole period defendants paid to the Payment
Distribution Agent
slightly more that they were ordered to (i.e
R20 033,00 instead of R19 733,00). There is no evidence
from the Payment
Distribution Agent as to the reason for remittal to
the plaintiff, of less that the instalments stipulated in the order.
The variation
in the instalments paid by the Payment Distribution
Agent to the plaintiff is unexplained. The submissions by Mr Smith
that Payment
Distribution Agents are agents of customers as envisaged
in common law would, in my view, be properly determined at trial.
[11] That being the case
even the second leg of the application (i.e late payment) may not, in
my view be as conclusive of the issues
at the plaintiff makes it to
be; because the amount of arrears referred to in the summons may not
necessarily be attributable to
the late payment by the defendants.
[12] It appears from the
papers that for the 12 months preceding the application by the
defendants to have the debt re-arrangement
order varied, the
plaintiff accepted the payments received from the Distribution Agent
without so much as a complaint. The move
to cancel the debt
re-arrangement order was sparked, it would seem, by service on the
plaintiff, of the application for variation
for debt re-arrangement.
I am of the view the question of whether the plaintiff is entitled to
enforce the credit agreement can
only be properly be determined at a
trial.
In the circumstances the
following order shall issue:
The summary judgment is
refused and leave is granted to the defendants to defend the action.
The cost of this
application shall be cost in the main action.
_________________________
N. DAMBUZA
JUDGE OF THE HIGH COURT
Appearances:
For the applicant: Adv.
Smith Instructed by Counsel Chambers, Port Elizabeth.
For the the respondents:
Adv. Govender Instructed by 16 Brooklands Avenue, Weybridge Park,
Port Elizabeth
1
Although
a credit provider is entitled to enforce, by litigation or other
judicial process, any right or security under a credit
agreement
without further notice
once
there is a default set out in
S 88
(3) – see FirstRand Bank v
Fillis
2010 (6) SA 565.
2
See
Erasmus; Superior Cort Practice; at B-1.
3
Firstrand
Bank v Fillis and another
2010 (6) SA 565
(ECP); S 88 (13) (1) (a)
of the Act provides that:
“
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-
The consumer is
in default under the credit agreement; and
One of the
following has occurred:
An event
contemplated in subsection (1) (a) through (c); or
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.”
4
Guide
to the
National Credit Act; at
5.2.5)