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[2019] ZAGPPHC 370
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Mabuduga v Nedbank Limited (76369/2014) [2019] ZAGPPHC 370; 2020 (1) SA 599 (GP) (26 July 2019)
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REPUBLIC OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
1)
REPORTABLE:
YES/
NO
2)
OF
INTEREST TO OTHER JUDGES: YES/
NO
3)
REVISED.
CASE
NUMBER: 76369/2014
26/7/2019
In
the matter between:
FULUFHELO
DAVID
MABUDUGA
Applicant
and
NEDBANK
LIMITED
Respondent
In
re:
NEDBANK
LIMITED
Plaintiff
and
FULUFHELO
DAVID MABUDUGA
Defendant
JUDGMENT
LE
GRANGE AJ:
[1]
This is an application for rescission (not specified whether under
rule 42, Rule 31
or the common law, but to be considered
regardless
[1]
)
of an order granted by Madlba AJ in this court on 13 May 2013. The
order granted in favour of the respondent/plaintiff ("Nedbank")
against the applicant/defendant ("applicant") was for:
1. Payment
of the amount of R 551013.19. Interest on the amount of R 551013.19
at the rate of
9.25°/o per annum calculated and capitalised
monthly in advance from 1 September 2014 to date of payment;
2. Cost of
suit as between attorney and client scale;
3. Prayers 2 and 4
are postponed
sine die.
[2]
At the start of the hearing, the parties (through counsel, in a
sincere attempt to
dispose of the matter amicably) approached the
court with a draft order, containing certain terms, and insisted that
it be granted,
as it was by consent.
Judicial
overview
[3] The
court has the duty to review the terms consented to, and to ensure
that any order
it makes, is legally sound. That is: within the
boundaries of the applicable law and not against public policy or
contra bones mores.
[4] The
court should not slavishly adhere to settlement- or consented terms
proposed by
parties and only act as rubber stamp. To do so would be
disastrous to our law and our constitution. The order, if not legally
sound,
may be set aside on the basis that no such order could have
been made in law.
[5] To
this end, it was important to consider the draft order, while having
regard to the
facts and the applicable legislation.
Background
facts
[6] The
background facts in this matter is very similar to that in
Rougier
v Nedbank 2013 JDR 1167 (GSJ),
wherein
action was Instituted for the enforcement of a credit agreement (as
envisaged by the National Credit Act 34 of 2005 ("Act"))
and judgement granted after the applicant had applied for debt review
(in terms s 86(1) of the Act) and subsequent to Nedbank receiving
a
Form 17.4 notice of termination from the debt counsellor.
[7] The
factual matrix herein differs to the extent that In
Rougier
the debt counsellor "withdrew"
the debt review application due to the
applicant's
uncooperativeness,
while in this
matter the debt counsellor gave notice to Nedbank, using Form 17.4
which stated that:
"This notice serves to
advise you that the
application
for Debt Counselling dated 15
May 2014 has been
voluntarily withdrawn by the consumer."
(Own emphasis added)
[8]
This notice of withdrawal of the application for debt counselling,
led to action being
instituted by Nedbank and default judgement being
granted.
[9]
In the judicial overview process and In considering the terms of the
proposed draft
order the question whether a consumer is entitled to
exit, withdraw from, or terminate, the debt review process after
his/her application
in terms of s 86( 1) becomes relevant for the
following reason: (i) If it is found that the credit agreement is not
subject to
a pending debt review or before a debt counsellor the
parties will be at liberty to settle their dispute amongst
themselves, without
the intervention and oversight of the debt
counsellor or the application of the debt-review-process provisions
of the Act, and
should the order correspond therewith; (ii) If the
credit agreement is however before a debt counsellor or subject to a
pending
debt review, the aggregate debt-review-process provisions of
the Act must be adhered to and should the court order correspond
accordingly.
[10] By
agreement a second draft order, which accord with the second scenario
aforementioned, was handed
up for my consideration. I Confirmation
was given to me by counsel that the terms thereof was agreed upon by
the parties.
The
law
[11] After
considering the facts and the law in
Rougier,
Nobanda J, came to the conclusion
that:
"[12]
In the circumstances, the debt counsellor fulfils a statutory
function. As such, the debt
counsellor is enjoined to act within the
parameters of the empowering provisions.... accordingly, the debt
counsellor's powers
in dealing with a s 86(1) application are limited
as set out above. I could not find any provision in the Act that
empowers the
debt counsellor to "withdraw" the debt review
instituted in terms of s 86(1).
[13]
In the premises,
I find that in purporting to withdraw the debt
review
instituted by the applicant in terms of the provisions of
s 86(1),
the debt counsellor acted ultra vires.
[14]
In the light thereof, the debt review application by the applicant
was still pending
before the debt counsellor at the time of the
institution of the action by the Respondent. As such, the provisions
of
s
88(3)
of the Act applied.
(Own emphasis added)
[12] I
agree with the findings in
Rougier.
[13] The
Rougier
matter
did however not address, nor consider the consumer's right to exit
the debt review process, but only that of the debt counsellor.
[14] The
National Credit Regulator, considered
Rougier
and subsequently
implemented its 'Withdrawal Guidelines 002/2015 of the National
Credit Regulator' (which guidelines is inferior
to the NCA, its
Regulations and case law), which provide as follows:
"Consumer can only
withdraw or terminate the debt review process prior to the
declaration of over-indebtedness as per
s
86(7) of the Act
and issuance of Form 17.2 subject to payment of the debt counselling
fees as per NCR Debt Counselling Fee Guidelines.
"
[15] The
National Credit Regulator therefore seems to be of the view that the
consumer is entitled to withdraw
his/her debt review application, or
from the debt review process, up until the time that the debt
counsellor has acted in accordance
with s 86(7).
[16]
Similar to
Rougier,
I
can find no provision in the Act that empowers the consumer to
"withdraw" his/her application or from the debt review
process after the consumer's s 86(1) application.
[17] To
this end, the law is clarified by Binns-Ward J, in his judgement in
Phaladi v Lamara
2018 (3) SA 265
(WCC):
[8]
The High Court does indeed have an inherent jurisdiction, and in
appropriate circumstances
even a duty, to develop the common law
taking into account the interests of justice. It also has an inherent
jurisdiction to regulate
its own procedures and processes
-
it was only of
that aspect of its powers that Corbett JA was speaking in Universal
City Studios supra foe cit. In the area of law
regulated or
determined by statute, it is under a duty to interpret and apply
legislative enactments in a manner that promotes
the spirit, purport
and objects of the Bill of Rights, but in striving to do so it cannot
by Procrustean construction do violence
to the language used by the
legislature. Its powers do not extend to improving legislation by
providing measures or remedies that
the statutory enactments do not
afford, merely because the court considers it would be just or
equitable that they should be afforded...
[9]
The
concepts of 'over-indebtedness' (including that of financial
difficulty falling short of 'over-indebtedness' contemplated by
s
86(7)(b)) and the attendant remedy of 'debt review' within the
meaning of the NCA, have no foundation in the common law. They
are
statutory creations. How they work is governed entirely by the NCA
and, in the absence of a challenge to their constitutionality_,_
the
courts' powers in respect of them are delineated by the provisions of
the enactment.
[29]
...
The
courts are not empowered to craft a remedy that the statute does not
allow for...
(Own emphasis added)
[18] A debt
review process starts when an application in terms of s 86(1) comes
before a debt councillor.
From the date of filing of the application
(or an allegation of over-indebtedness to a court), the consumer
becomes restricted
in his/her dealings (see s 88(1)) until such time
as the debt counsellor or the court has determined theconsumer's
fate. Upon acceptance
of the application the debt counsellor attracts
a statutory duty (see s 86(4) to s 86(8)); and after receipt of the s
86( 4)(b)(i)
and (ii) notice(s) the creditor(s) becomes barred from
enforcing by way of litigation the/their credit agreement(s) (see s
88(3)).
If the consumer is found to be over indebted or
financially distressed, all parties must then participate in good
faith, in
an attempt to attain a responsible debt re arrangement
(see s 88(5) to s 88 (7)).
[19] The
unambiguous effect of the aforementioned provisions of the NCA is
that:
(a)
When the applicant filed his application in terms of s 86(1), it was
out of the applicant's hands
to withdraw his/her application, or from
the debt review process. The withdrawal was therefore
ultra
vires
and of no force and effect;
and
(b)
From date of receiving notice in terms of s 86(4)(b)(i), Nedbank was
barred from instituting action,
which makes its summons premature.
[20] It is
incumbent that the debt review process must then resume from where it
derailed. That
is, in the application process, and while the matter
was ln the statutory hands of the debt counsellor. This also seems to
be in
line with, and the purpose of, an order in terms of s 130(4).
In the alternative, the court should consider an order in terms of
s
85.
[21] The
parties in their settlement agreement, chose to rescind the
judgement; withdraw the main action;
and resume the debt review
process by placing the matter back in the hands of the debt
counsellor and by agreeing to participate
in good faith in an attempt
to retain a responsible debt re-arrangement.
[22] I am
satisfied that the terms of the second draft order, as agreed upon
and consented to by the parties,
accord with the above and Is sound
in law.
[23] In
the result, the draft order annexed hereto (marked "X") is
madean order of court.
AJ
LE GRANGE
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
APPEARANCES
For
the Applicant:
Adv . M Coetzee on the instruction
of Johann
Scheepers Attorney
For
the Respondent:
Adv. WJ Roos on the instruction of Van Heerden's
Incorporated
IN THE HIGH COURT OF SOUTH
AFRICA
[GAUTENG DIVISION, PRETORIA]
Before
the Honourable Justice Le Grange AJ on 6 August 2019
CASE
NUMBER: 76369/14
In
the matter between:
FULUFHELO
DAVID MABUDUGA
Applicant
and
NEDBANK
LIMITED
Respondent
DRAFT ORDER
After
considering the papers filed, hearing counsel for the parties and
subsequent to an agreement between the parties, the following
order
is made:
1. That
the default judgment granted against the Applicant on 13
May 2016
under case number 76369/14 is hereby rescinded and that the
Respondent (the Plaintiff in the main action) herewith withdraws
the
action against the Applicant (the Defendant in the main action).
2. That
the Applicant and the Respondent will forthwith take
all necessary
steps to facilitate the restructuring of the home loan agreement.
3. That
the Applicant and the Respondent undertake to act
in good faith and
fully co-operate with each other for the purpose of restructuring the
aforesaid home loan agreement.
4. That
the fact that the Applicant is currently under debt
counselling will
not negatively affect the restructuring process between the parties.
5. That
the Applicant may approach the appropriate court to
apply to have the
loan agreement reinstated and/or confirmed under the debt review
process, if necessary.
6. That
the Respondent is directed to forthwith refund to
the Applicant all
legal fees debited to bond account number [….].
7. That
the debt counsellor must be notified of this order,
in writing,
within 5 days hereof, in order to act in terms of his statutory
duties, if any.
8. Each
party will pay their own costs.
By
Order of the Court
The
Registrar
[1]
Masstores (Pty) Ltd v Pick n Pay Retailers (Pty) Ltd
2017 (1) SA
613
(CC) at p 637 par [71