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[2021] ZALMPPHC 54
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Standard Bank of South Africa v Pheeha (5430/2019) [2021] ZALMPPHC 54 (6 July 2021)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE
NO: 5430/2019
REPORTABLE:
YES/NO
OF
INTEREST TO THE JUDGES: YES/NO
REVISED.
DATE:
06 JULY 2021
DJP
SEMENYA M.V
In
the matter between:
STANDARD
BANK OF SOUTH AFRICA
:
APPLICANT/PLAINTIFF
And
MATOME
PATRICK PHEEHA
:
RESPONDENT/DEFENDANT
JUDGMENT
SEMENYA
DJP:
[1]
The applicant/plaintiff (the plaintiff) in this matter issued summons
against the respondent/defendant (the defendant) in which
the
following relief was sought:
1. Confirmation of
cancellation of the Agreement;
2. An order directing the
Defendant to restore to the Plaintiff possession of the goods, being
a
2018 NISSAN NP200 1.6 A/C P/U S/C, ENGINE NO: K7M[…] and
CHASSIS NUMBER: AND[…];
3. Retention of all
monies paid to the Plaintiff by the defendant:
4. Leave is granted to
the Plaintiff to apply for:
4.1 Damages, if any, in
the amount to be calculated by subtracting the current market value
of the goods (as well as a rebate on
unearned finance charges from
the balance outstanding if applicable);
4.2 Interest on the said
damages at the rate of
13.160%
per annum from
5
th
June 2019
; and
4.3 Costs on an attorney
client scale calculated on the Magistrate court tariff.
[2]
The defendant has admitted that he has entered into a credit
agreement with the plaintiff. He has however raised raised three
special pleas and a counter-claim. In the first special plea the
defendant pleads that the agreement is unlawful and therefore
void as
envisaged in section 89(5)(a) of the National Credit Act, 34 of 2005
(the Act)
.
In the second special plea, the defendant pleads
that this court should declare the entire credit has been recklessly
granted within
the meaning of section 81 of the Act. The third
special plea is that the plaintiff failed to provide him with notice
of his default
before summons were issued as envisaged in section 129
of the Act. The defendant further raised defences in which he denies
that
the plaintiff was represented during the signing of the
pre-agreement stage and that the lending was reckless.
[3]
Subsequent to the delivery of a plea, the plaintiff invoked the
provisions of Rule 32 by applying for summary judgment. The
defendant
filed affidavit resisting the application. This judgment therefore
pertains to the application for summary judgment.
The defendant
places reliance on section 89 (5) (a) read with section 92(3) of the
Act in support of his special plea of unlawfulness
of the credit
agreement. The defendant argues that the plaintiff caused him to sign
the pre-agreement on the very same date as
the date on which he
approached that plaintiff for credit.
[4]
Section 92(3) provides as follows:
“
Pre-
agreement disclosure –
(3) Subject only to
subsection (4), sections 81 and 101 (1)(d)(ii), for a period of five
business days after the date on which a
quotation is presented in
terms of subsection (2)(b) –
a) with regard to
small agreement, the credit provider must, at the request of the
consumer, enter into the contemplated credit
agreement at or below
the interest rate or credit cost quoted, subject only to sections 81
and 101 (1)(d)(ii);
(b) with respect to an
intermediate or large agreement, the credit provider must, at the
request of the consumer, enter into the
contemplated credit agreement
at an interest rate or credit cost that –
(i) is at or below the
interest rate or credit cost quoted; or
(ii) is higher than
the interest rate or credit cost quoted by a margin no greater than
the difference between the respective prevailing
bank rates on the
date of the quote, and the date the agreement is made.”
[5]
The defendant argued that the plaintiff, as the credit provider,
caused him to sign the pre-agreement on the same date on which
he
applied for credit. The defendant argued that the plaintiff was
required to wait for a period of five business days before he
could
cause him to sign the agreement. It is evident that the defendant’s
interpretation of section 92(3) is clearly wrong.
Correctly
interpreted, the period of five business days in the section refers
to the period within which the consumer may demand
that the credit
agreement be entered into at the rate referred to in subsection (3)
(b) (i) or (ii) above. There is therefore nothing
unlawful in the
agreement based on the defendant’s contention. The first
special plea is therefore without merit. The defendant’s
submission that this special plea raises triable issue is therefore
rejected. In any event I fail to find the applicability of
any of the
provisions in section 89 of the Act to the facts of this case.
[6]
The defendant contended that the whole agreement must be declared a
reckless agreement as contemplated in section 81(2) of the
Act. In
support of this argument the defendant attached Annexure P-A to his
plea and counter-claim. It is the defendant’s
argument that the
plaintiff failed to comply with section 81(1) and (2) which provides
as follows:
Prevention of
reckless credit
81. (1) When
applying for a credit agreement, and while that is being considered
by the credit provider, the prospective consumer
must fully and
truthfully answer any requests for information made by the credit
provider as part of the assessment required by
this section.
(2) A credit provider
must not enter into a credit agreement without first taking
reasonable steps to assess-
“
(a) the
proposed consumer’s-
(i) general
understanding and appreciation of the risks and costs of the
proposed credit,
and of the rights and
obligations of a consumer under a credit agreement;
(ii) debt re-payment
history as a consumer under credit agreements;
(iii) existing
financial means, prospects and obligations; and
(b) whether there is a
reasonable basis to conclude that any commercial purpose may prove to
be successful, if the consumer has
such a purpose for applying for
that credit agreement.”
[7]
The defendant contends that the plaintiff conducted an affordability
assessment on the
16 January 2018
which was 6 days after the
agreement was entered into. It was contended that this
contravenes the provisions of section 81(2)
in that the section
requires such assessment to be conducted prior to the agreement. The
plaintiff sought to invoke the defence
made available to the credit
provider in section 81 (4) of the Act. In terms of this section, it
is a complete defence to an allegation
of reckless credit if the
credit provider establishes that the consumer failed to fully and
truthfully answer any request for information
made by the credit
provider as part of the assessment required by section 81.
[8]
The defendant contended that the second special plea raises a triable
defence. He argues that the plaintiff entered into a credit
agreement
with him without first taking reasonable steps to assess his general
understanding and of risks and costs of the proposed
credit, and of
his rights and obligations, in particular, without first obtaining
his debt-repayment history under credit agreements.
The plaintiff
contends that Annexure P-A annexed to the defendant’s plea and
counter-claim was intended to be credit assessment.
The defendant on
the other hand refers to the document as affordability test. My
understanding of the special plea is that the
credit assessment, if
any, was not properly done according to the letter of the Act.
[9]
The plaintiff argues that it is placing reliance on section 81(4) on
the basis that the information provided by the respondent
was
incomplete. In other words, that the defendant failed to truthfully
and fully the request that was made to the defendant in
annexure
“P-A”. That it is for this reason that it obtained
consent from the defendant to approach third parties so
as to enquire
about his full obligations. According to the plaintiff, the defendant
failed to truthfully and accurately provide
the applicant with his
financial position as at the date of the application for a loan. It
is indeed so that Annexure “P-A”
has a question that
requires the consumer to state his other loans. It is evident- that
the defendant omitted to furnish such information.
The plaintiff
stated that it established after a diligent process that the actual
surplus of the defendant is less than the one
he had furnished in
Annexure “P-A” but that he nonetheless remained with
sufficient surplus to allow for the granting
of the requested loan.
This allegation is not disputed.
[10]
In
SA Taxi Securitisation v Mbatha
2011 (1) SA 310
it was held
that if a consumer has a valid complaint that, but for the
recklessness of the credit provider, the consumer would
never have
entered into the credit agreement, it might be reasonable to set
aside the agreement. In this matter there is nowhere
in the
defendant’s plea or affidavit resisting summary judgment where
it is stated that the defendant would not have entered
into the
credit agreement had the plaintiff assessed his debt-repayment
history. Put differently, it is not the defendant’s
case that,
had the applicant done the debt-repayment history assessment, it
would have realised that it is reckless to extend credit
to the him
but has proceeded to so irrespective. The defendant’s
submission that summary judgment should be refused in that
the second
special plea raises a triable issue is found to be without merit.
There is no reason to set aside the credit agreement
on account of
reckless lending.
[11]
In the third special plea, the defendant stated that there is no
evidence to prove the plaintiff’s compliance with section
129
of the Act. In support of this plea the defendant referred the court
to Annexure “P-C” which is the post office
Parcel Tracing
Result document. The defendant contends that Annexure “P-C”
clearly shows that he has never received
the parcel. He argues the
parcel was received by one Thabo Nkadimeng at Hatfield. It would
appear that the defendant does not know
the correct way of
identifying parcels from the post office. The registered letter which
is attached to the summons as Annexure
“C”, has a
reference number
PE 895 941 003 ZA
on it. It shows
that the parcel was for M Pheeha of 5[…] Olive Grove Village
Thornhill Bendor, Polokwane. It is not disputed
that the address is
that of the defendant. The track and trace document that is relied
upon by the plaintiff as proof that the
section 129 letter was sent
to the defendant is marked with a similar item number
PE
895 941 003 ZA
. The track and trace document shows that
the letter was sent from Hatfield post office, hence the words “in
transit and out
of office” which are appearing on it. First
notification of the letter to the addressee was sent from Bendor Park
on the
15 July 2019
.
[12]
Annexure “P-B” which the defendant is relying upon to
prove that he has not received a section 129 notice is clearly
unrelated to the matter before this court. The item number on
Annexure “P-B” is not the same as that in Annexure “C”.
The track and trace is for a parcel that was sent to Thabo Nkadimeng.
I am satisfied that there is compliance with section 129
of the Act
in this case. The third special plea does not raise a bona fide
defence.
[13]
With regard to the defendant’s plea, I do not intend to repeat
what I have already stated with regard to the allegations
of reckless
lending. The defendant admitted that he signed the agreement. He
however denies that the plaintiff was represented
during the
pre-agreement procedures. The plaintiff argues that the defendant’s
plea constitutes a bare denial of the allegations,
which is not
permitted. I further find that there is no factual basis for the
defendant’s counter-claim on the basis that
the special plea of
reckless credit was found to be without merit.
[14]
In resisting application for summary judgment the defendant is
required to satisfy the court by an affidavit that he has a
bona fide
defence to the claim. In
South African Land Arrangement CC &
Others v Nedbank Ltd (20063/2014) ZASCA 88 (29 May 2015)
it was
stated that:
[13] The legal
principles governing summary judgment proceedings are
well-established. In
Maharaj v Barclays National Bank Ltd
,
3Corbett JA outlined the principles and what is required from a
defendant in order to successfully oppose a claim for summary
judgment as follows: …
“
[One] of the
ways in which a defendant may successfully oppose a claim for summary
judgment is by satisfying the Court by affidavit
that he has a bona
fide 3
Maharaj
v Barclays
National
Bank Ltd
1976 (1) SA 418
(A) at 426 A-D.7
defence
to the claim. Where the defence is based upon facts, in the sense
that material facts alleged by the plaintiff in his summons,
or
combined summons, are disputed or new facts are alleged constituting
a defence, the Court does not attempt to decide these issues
or to
determine whether or not there is a balance of probabilities in
favour of the one party or the other. All that the Court
enquires
into is:
“
(a)
whether the defendant had “fully” disclosed the nature
and grounds of his defence and the material facts upon which
it is
founded, and
(b) whether on the
facts so disclosed the defendant appears to have, as to either the
whole or part of the claim, a defence which
is both bona fide and
good in law. If satisfied on these matters the Court must refuse
summary judgment either wholly or in part,
as the case may be. The
word “fully”, as used in the context of the Rule (and its
predecessors), has been the cause
of some judicial controversy in the
past. It connotes, in my view, that, while the defendant need not
deal exhaustively with the
facts and the evidence relied upon to
substantiate them, he must at least disclose his defence and the
material facts upon which
it is based with sufficient particularity
and completeness to enable the court to decide whether the affidavit
discloses a bona
fide defence”.
[15]
The technical defences raised by the defendant are found to be
mala
fide
and bad in law. There is no reason this court should refuse
summary judgment as applied for by the plaintiff.
[16]
In the result I make the following order:
1. Summary judgment is
granted;
2. cancellation of the
Agreement is confirmed;
3. The defendant is
directed to restore to the plaintiff possession of the goods, being a
2018 NISSAN NP200 1.6 A/C P/U S/C; ENGINE
NO: K7M[…], and
CHASSIS NO: AND[…];
4. Retention of all
monies paid to the plaintiff by the defendant;
5. The plaintiff is
granted leave to apply for:
5.1 Damages, if any, in
an amount to be calculated by subtracting the current market value of
the goods (as well as rebate on unearned
finance charges from the
balance outstanding if applicable);
5.2 Interest on the said
damages at the rate of
13.160%
per annum from the
5
th
June 2019
to date of payment;
6. The defendant is
ordered to pay the taxed costs of the suit at magistrates’
court tariff.
M
V SEMENYA
DEPUTY
JUDGE PRESIDENT OF THE
HIGH
COURT OF SOUTH AFRICA;
LIMPOPO
DIVISION
APPEARANCES
FOR
THE APPLICANT
:
ADV. M NAUDE`
INSTRUCTED
BY
:
VEZI DE BEER INC.
FOR
THE RESPONDANTS
:
MR. M CHIDI
INSTRUCTED
BY
:
CHIDI ATTORNEYS
DATE
OF HEARING
:
15 JUNE 2021
DATE
OF JUDGEMENT
:
06 JULY 2021