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[2018] ZAECPEHC 4
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Changing Tides 17 (Proprietary) Limited N.O. v Wagg and Another (165/2014) [2018] ZAECPEHC 4 (22 February 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION – PORT ELIZABETH
Case
No.: 165/2014
In
the matter between:
CHANGING
TIDES 17 (PROPRIETARY)
LIMITED
N.O.
Applicant
And
ROUCHE
WAGG (formerly Weitsz)
First
Respondent
RUDOLF
VISAGIE WAGG
Second
Respondent
JUDGMENT
REVELAS
J
:
[1]
In
the present application the applicant seeks the following relief
against the two respondents, jointly and severally, the one
paying
the other to be absolved:
1.1
Payment
of the amount of R826 875.50;
1.2
Interest
on the aforesaid amount in rate of 7,3% per annum, compounded monthly
in arrears, from 5 October 2013 to date of payment;
1.3
An
order declaring the immovable property over which a bond has been
registered, executable;
1.4
An
order that the Registrar be authorized to issue a warrant of
attachment in respect of said property;
1.5
Costs
of suit on the attorney and client scale.
[2]
The
judgment sought against the respondents by the applicant, is pursuant
to a home loan agreement. The applicant is a registered
credit
provider. According to the applicant the respondents failed to
adhere to the terms of the loan agreement and therefore
the applicant
intends to foreclose on the property secured by a bond in favour of
the applicant.
[3]
The
applicant argues that the respondents failed to adhere to the terms
of a debt review order which entitled the applicant to enforce
the
terms of the loan agreement, without having to apply for a variation
or a setting aside of the order of the magistrate who
made the
rearrangement or debt review order.
[4]
The
debt review referred to was first entered into on 22 September 2010.
The Magistrates’ Court in Port Elizabeth declared
the
respondents to be over indebted in terms of the National Credit Act
34 of 2005 (“the Act”) and ordered the respondents’
debt to be rearranged to the effect that the respondents pay R4
139.39 per month to a Public Distribution Agency (“PDA”)
as the “gross available amount”. The PDA in turn,
was responsible to make direct payments to the applicant.
The
applicant was to be paid R2 000.00 per month with an interest rate
fixed at 15,5% over a period of 554 months, the current
balance then
was R760 624.27. In terms of paragraph 5 of the magistrate’s
order all “parties are responsible for their
own costs relative
to this application and order, unless otherwise ordered.”
[5]
Two
years later, on 26 September 2012 the aforesaid order was varied.
In terms of the varied order, the respondents were once
against
declared to be over indebted. The monthly “gross
available amount” was set at R5 581.08 per month in
the order,
and payable to the PDA. The proposed payment to the applicant
was to be R4 834.60 per month with an interest rate
of 8,7% over a
proposed period of 269 months. At that point the respondent’s
current balance was R825 315.50.
The respondents were ordered
to pay the costs of the application for a varied order.
Paragraph 6 of the magistrate’s
order reads as follows:
“
The
distribution payments by The Distribution Agent only occur once the
Applicant’s debt counseling fee, as shall be determined
and
calculated in accordance with the guidelines laid down by the
National Credit Regulator and the legal costs related and incidental
to the consumers application in terms of
section 8(1)
of the
National
Credit Act 34 of 2005
, as well as the legal fees has been paid by the
PDA from the gross available amount payable in terms of this order.”
[6]
When
the respondents defaulted on the stipulated payments in terms of the
magistrates’ order of 26 September 2012, wherein
the
respondents’ obligations were rearranged the applicant gave
notice ot the respondents in terms of Rule 129(i) of the
Act on 11
January 2013. On 22 January 2014 the applicant, in motion court
proceedings sought the relief as set out in its
notice of motion.
Subsequently, the respondents’ debt arrangements were once
again amended.
[7]
On
12 June 2015 the Magistrates’ order was varied once again.
The gross available amount was set at R6 871.56 and the
same order
was made as in paragraph 6 of the order cited above. The
monthly payment payable by the PDA to the applicant was
set at R5
636.91 per month. The interest rate thereon was fixed at 7,9%
over a proposed period of 190 months. The current
balance of
the respondents’ debt was then R803 297.19. On 12 June
2015 the order was varied and it was agreed between
the parties that
the full amount outstanding from time to time shall bear interest at
the standard variable rate calculated on
the daily outstanding
balance as from the advance date. The standard variable
interest rate shall always be comprised of
the base rate plus the
margin. The margin for the “
super
lo
”
rate was set at 1,5%”.
[8]
The
respondents dispute being in breach of the debt review order on the
basis that any short payment by them was caused by payment
of the
debt counsellor’s fee as well as legal costs that was catered
for in the debt arrangement order.
[9]
In
its replying affidavit filed in May 2017 (the answering affidavit of
the respondents was filed in March 2014, three years earlier)
the
applicant challenged the debt review order of September 2010, almost
seven years earlier.
[10]
The
applicant contended that in the 2010 order the respondent was ordered
to pay the amount of R2 000.00 to the applicant.
Whereas the
contractual instalment was R5 589.09. Interest was ordered at
the rate of 5,5% per annum whereas the contract
between the parties
provided for a rate of 8,7%. The magistrate also extended
the period over which the loan was to
be repaid. By making the
aforesaid order the applicant contends that the magistrate acted
ultra
vires
.
[11]
The
applicant raised this challenge to the magistrate’s order
almost seven years later, because of subsequent judgments
[1]
wherein it was held that magistrates making orders for debt
arrangements in terms of the Act, lacked jurisdiction to vary the
material terms of a credit agreement.
[12]
The
applicant also challenged the validity of the two subsequent orders
made on 22 September 2012 and July 2015. In terms
of the order
of 22 September 2012, the period for repayment was reduced from the
initial 554 months to 269 months and the amounts
payable to the
applicant was increased to R4 834.60. The applicant complains
that the agreement did not provide for an escalation
of repayments to
the applicant. However, the two last orders do tend to address
the shortcomings of the previous order and
the respondent’s
belated complaint.
[13]
The
respondent further argues that the order of 26 September 2012 was not
granted in terms of section 86(1) but was the order granted
on 22
September 2010 and therefore the respondents are therefore only
allowed to deduct the costs for the 2010 application from
the amounts
that should be distributed towards all the creditors, including the
applicant.
[14]
The
applicant alleged that the respondents breached the agreements by
failing to make payments towards the applicant for the months
November and December 2012 and therefore breached the restricting
order which is in any event not enforceable.
[15]
According
to the applicant, the respondents also failed to make payment under
the debt restricting order for July 2015. When
queried on the
aspect of the fixed interest rate, the debt counsellor for the
respondents responded to the applicant on 31 January
2017 that he
reviewed the account of the respondents annually and that the
programme utilized by the debt counsellor does not cater
for variable
interest rates.
[16]
The
applicant highlights the anomaly created by the debt counsellor’s
application of the debt review provisions of the Act
and the
precarious situation the parties find themselves in. The debt
counsellor apparently prepares the application in terms
of section
86(1) by utilizing a fixed interest rate. Should the debt
counsellor then conduct his annual review of the matter
and exercise
his own discretion as to whether the amount due to the applicant
should be increased. If the debt counsellor
sees it fit to do
so he proceeds with a “a variation application” of the
debt review order. The cost of such
application is then born by
the consumers i.e the respondents. This, the applicant
contends, results in a situation where
for every twelfth payment made
by the respondents, only ten thereof is allocated to the applicant,
the other two payment is utilized
for the purpose of bring the
“variation application”, as in the present instance the
payments for November and December
2012.
[17]
The
applicant argue that the discretion which the respondents debt
counsellor has vested in him, is
ultra
vires
the Act. It results in a situation whereby the time periods
provided for in the court order in which the debt was to be settled
being undeterminable due to the constant need for a “variation
application”.
[18]
The
applicant further argued that the current method of utilizing the
debt review provisions of the Act by the respondents, has
the result
that the debt due to the applicant will only be settled in terms of
the debt restructuring order in the event that the
applicant agrees
to have the interest rate fixed and provided that the insurance
premiums remain fixed, should the debt counsellor
of the respondent
not annually adjust the interest rate. This is an undesirable
state of affairs but that does not entitle
the applicant to the
relief sought.
[19]
In
my view, the applicants complaints in relation to the validity of the
orders have little merit since those orders were granted
by consent,
and the respondent was ordered to pay increased instalments. In
addition it was not clear at the time the application
was brought, to
what extent the respondents were in default. The respondents
disputed the accuracy of the applicant’s
calculations.
The applicant did not deal sufficiently with this aspect in the
replying affidavit which was deposed to by
an attorney and not an
official of the applicant who would have access to, and personal
knowledge of the applicant’s records
pertaining to the
indebtedness of the respondents.
[20]
The
respondents relied on the judgment in
Van
Zyl v Government of the Republic of South Africa
2008(3) SA 294 SCA (at 306 D-E) it was held that it was not open to
an applicant to merely annex documentation to affidavits without
identifying portions thereof on which reliance is placed.
Another case relied on by the respondents was
Minister
of Land Affairs and Agriculture v Wevell Trust
2008(2) SA 184 SCA at 200 D. It was held in that case that
litigants ought not to be expected to trawl through lengthy annexures
to the opponents affidavits and to speculate on the relevance of
facts therein contained.
[21]
The
applicants did not attach all that many annexures to its papers and
such as there were, could not be described as irrelevant.
[22]
However,
the applicant’s papers do fall short in demonstrating to what
extent the respondents are in arrears, or in breach
of the debt
review orders. They also do not show why, in the light of the
respondent’s denial that they are in breach
of any debt
arrangement, the applicant alleges they are in default. That
can only be illustrated with figures. Mere
allegations are
inadequate. The same can be said with regard to the applicant’s
complaint about the manner in which
the debt collector calculated
month interest. The debt collector has not been cited as a
party either. Given the lengthy
period between the debt
restructuring complained of and present position, there are
insufficient facts before me to make a proper
finding.
[23]
In
the circumstances the applicant is not entitled to the relief it
seeks on these papers.
[24]
The
following order is made:
1.
The
application is dismissed with costs.
_____________________
E
REVELAS
Judge
of the High Court
Appearances
:
For
the Applicant: Adv. Gagiano instructed by Jacques De Preez
Attorneys, Port Elizabeth
For
the Respondents: Adv. Kroon instructed by Pierre Kitching
Attorneys, Port Elizabeth
Date
heard: 21 September 2017
Date
delivered: 22 February 2018
[1]
Nedbank v Norris and Others 2016(3) SA (ECP) and
Nedbank v Jones 2017(2) SA 473 (WCC)