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[2018] ZAGPPHC 338
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Absa Bank Limited v Maritz (55809/2017) [2018] ZAGPPHC 338 (16 January 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE NO: 55809/2017
16/1/2018
In
the matter between:
ABSA
BANK
LIMITED
PLAINTIFF
and
LORAINE
MARITZ
DEFENDANT
JUDGMENT
Murphy
J
1.
The plaintiff has applied for summary judgment against the defendant
in the sum of R1 079 948,66, together with interest thereon at 11,55%
per annum from June 2017. being the amount due to it in terms
of a
loan advanced against the security of a mortgage bond over Erf 536,
Van der Bijl Park South West. It also seeks orders declaring
the
property specially executable and authorising the Issue of a warrant
of execution against the property.
2.
The
loan constitutes a credit agreement as defined in Part C of the
National Credit
Act
[1]
("the
NCA").
3.
In her affidavit opposing summary judgment, the defendant does
not
deny the conclusion of the agreement or the amount of the loan; she
merely opposes the application on the ground that the transaction
was
"reckless credit" in that the credit was granted to her
under a credit agreement concluded in circumstances described
in
section 80 of the NCA. In essence, she maintains that the plaintiff
failed to conduct a proper risk assessment of her credit
position
before granting the loan.
4.
The relevant part of section 80 of the NCA provides that a credit
agreement is reckless if, at the time that the agreement was made,
the credit provider failed to conduct an assessment as required
by
section 81(2) of the NCA, irrespective of what the outcome of such an
assessment might have concluded at the time; or the credit
provider,
having conducted an assessment as required by section 81(2) of the
NCA, entered into the credit agreement with the consumer
despite the
fact that the preponderance of information available to the credit
provider indicated that the consumer did not generally
understand or
appreciate the consumer's risks, costs or obligations under the
proposed credit agreement; or entering into that
credit agreement
would make the consumer over-indebted. In terms of Section 81(2) of
the NCA a credit provider must not enter into
a credit agreement
without first taking reasonable steps to assess 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; and iii) existing financial
means, prospects and obligations.
5.
If
a court declares that a credit agreement is reckless, it may make an
order setting aside all or part of the consumer's rights
and
obligations under the agreement, as it determines just and reasonable
in the circumstances; or it may suspend the force and
effect of the
agreement; and in cases of over indebtedness may restructure the
consumer's obligations.
[2]
The
court accordingly has considerable discretion. It is unlikely to make
an order relieving the consumer of all its obligations
if the result
would be the unjust enrichment of the consumer at the expense of the
credit provider. Much will depend on the facts,
the equities of the
situation and the extent of the consumer's exposure. Whether or not
there is a prospect that a consumer might
obtain relief in terms of
section 83 of the NCA depends therefore on the facts.
6.
Rule
32(3) obliges the defendant, if she is successfully to resist summary
judgment, to satisfy the court that she has a
bona
fide
defence
to the action and to "fully disclose the nature and grounds of
the defence and the material facts relied upon therefore".
All
that the court enquires into is whether the defendant has ''fully"
disclosed the nature and grounds of his defence and
the material
facts upon which it is founded; and whether on the facts so
disclosed, the defendant appears to have a
bona
fide
defence
and good in law. The defendant need not deal exhaustively with the
facts and the evidence relied upon. to substantiate them,
but must at
least disclose the 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.
[3]
In
Standard
Bank· of South Africa Ltd v Kelly
[4]
Binns
Ward J helpfully formulated the inquiry in relation to reckless
credit as follows:
"In
the context of opposing an application for summary judgment on the
grounds that an adequate risk assessment did not precede
the
conclusion of the credit agreement, and that a consequent entitlement
has arisen to a declaration that the credit agreement
was reckless
and an attendant order in terms of section 83(2) of the Act, the
defendant is therefore required to set out the pertinent
facts in
support of his/her opposition in the manner required by Uniform Rule
32(3)''.
7.
The defendant alleges that the credit provided to her was granted
without an adequate assessment in terms of section 81(2) of the NCA
having been undertaken. This she maintains gives rise to a
bona
fide
defence sufficient to resist
the application for summary judgment. She makes her case in a few
paragraphs in the opposing affidavit.
In paragraphs 3.1.3 and 31.1.4,
she states:
"No
assessment of my financial situation was completed by the applicant
and no credit check was done. At that stage I was selling
immovable
property and only earned commission, which fluctuated month on month.
I
merely had an Interview with a representative of the applicant and
the loan was granted. I don't know whether any background of
financial checks were made, any references consulted and verified at
the time of my application for the loan from the applicant."
8.
In paragraphs 4.2 and 4.8 she elaborates as follows:
"I
indicated to the applicant that I was a sales person who sold
immovable property, that my Income was not guaranteed and
that the
applicant, knowing thereof, still granted the loan to me. In this
regard it is submitted that the loan was reckless credit
in terms of
section 80 of the NCA 34 of 200S, which stand to be ventilated during
a trial....
At
the time of the application for the loan I was under debt review for
some other credit providers [see para 4.9.1 of the plea
to the
summons of the applicant]. This information was available on the
records of the National Credit Regulator. I am not aware,
nor was I
asked about any financial difficulty of any other information. I was
only required to hand in 3 months of earnings [which
was commission
on sales of immovable property] and which was accepted by the
applicant. I have disclosed to the applicant that
I only earn
commission and that the amount per month fluctuated in that some
months I don't receive commission and other amounts
I do receive a
substantial amount. This was accepted by the applicant."
9.
The defendant makes no mention of or reference to clauses 45
and 46
of the credit agreement she signed. These clauses are declarations
regarding her financial status and her appreciation of
the risks,
including that: i) she perused the information in respect of her
personal, financial and account particulars that she
provided to the
plaintiff; ii) the personal, financial and account details provided
to the plaintiff were correct; iii) the financial
information
provided to the plaintiff was honest and accurate; iv) the loan would
not cause her to be over indebted; v) she did
not apply for debt
review; vi) no process for a debt review determination pending; vii)
she understood the risks and costs involved
in terms of the loan; and
viii) she understood her rights and obligations in terms of the loan.
In clause 48 she confirmed that
she had signed the agreement in
accordance with her free will; and in clause 49 she confirmed that
she had read and understood
all the terms and conditions of the
agreement.
10.
The plaintiff argued that it is not sufficient for a defendant to
merely state
that the plaintiff did not conduct an assessment as
required in terms of section 81(1) of the NCA. Something more is
required and
the defendant was obliged to place more facts before the
court to sustain the defence. The acceptance of bald allegations that
a proper risk assessment was not done will create .an unsafe
precedent in summary judgment applications.
11.
It is apparent from the defendant's averments that
she is not certain
that an adequate assessment was undertaken; nor has she made any
attempt to explain why her declarations and
confirmations that the
risks and costs of the loan had been fully explained should not be
accepted at face value or why she signed
an acknowledgement of her
awareness of the terms and conditions of the loan, the rights and
obligations under it, and the risks
associated with it. She does not
aver that she did not understand or appreciate the risks and she does
not set out how and to what
extent she in fact became over-indebted
as a consequence of the transaction.
12.
Furthermore, there is no information in the opposing
affidavit to
indicate on what basis a court might be persuaded to embark on the
debt review that would be necessary before it might
grant any relief
under s 83(2)(b) of the NCA, or as to why it might consider it Just
and reasonable to set aside all or part of
the defendant's
obligations as permitted in terms of s 83(2)(a) of the Act. In the
circumstances the defendant cannot be said to
have set out the
material facts upon which her defence is based with sufficient
particularity and completeness to satisfy the court
that a
bona
fide
defence has been disclosed.
13.
Moreover, the defendant did not disclose the nature
and content of
the financial information she in fact disclosed to the plaintiff when
the assessment was done. She has not stated
what her income and
expenses were at the time she applied for the loan or what they are
currently. She has also contradicted herself.
In paragraph 3.1.3 she
stated that no assessment of her financial situation was done by the
plaintiff. Yet in paragraph 2.4 she
stated that at the time of the
application for the loan, she was only required to hand in 3 months
of "earnings'' Which was
accepted by the plaintiff, and that she
went to an interview with a representative of the plaintiff prior to
the loan being granted.
On her own version , therefore, an assessment
was in fact done. But it is impossible to assess if she understood
the risks etc.
(section 80(1)(b)(i) of the NCA) or if the loan
resulted in over- indebtedness (section 80(1)(b)(ii) of the NCA)
because she fails
to provide any information about her actual
financial position now or then. The defendant consequently has given
insufficient information
in the opposing affidavit to indicate on
what basis a court might be persuaded to embark on the debt review
that would be necessary
before it might grant any relief under
section 83(2)(b) of the NCA, or as to why it might consider it just
and reasonable to set
aside all or part of her obligations.
14.
The defendant states that at the time of the loan
application she was
under debt review with other credit providers. No proof of debt
review is annexed and no details of the alleged
debt review are
disclosed in the affidavit. She offers no explanation as to why she
explicitly and falsely declared to the plaintiff
that she was not
under debt review at the time she applied for the loan.
15.
In the circumstances, the defendant has not set
out the material
facts upon which her defence is based with sufficient particularity
and completeness to satisfy the court that
a
bona
fide
defence has been disclosed.
16.
The defendant further relies upon her constitutional
right of access
to adequate housing. She provides no information as to why she cannot
come by suitable alternative accommodation.
Her bald averments in
this regard do not disclose a
bona
fide
defence either.
17.
In the premises the plaintiff is entitled to summary
judgment and the
following orders are made:
17.1. The
defendant is ordered to pay the plaintiff the sum of R1 079 948, 66
together· with interest thereon at the rate of 11,55% per
annum, capitalised monthly from 22 June 2017 until the date of
payment.
17.2. The
immovable property Erf 636 Vanderbijl Park South West 1 Township
Registration Division I.Q., Province of Gauteng, Measuring 911 square
metres held by Deed Transfer No. T87934/14 subject to the
conditions
therein contained is declared specially executable.
17.3. The
Registrar of this court is authorised and directed to issue a warrant
of execution against the immovable property.
17.4. The
defendant is ordered to pay the costs of suit, including the costs
of
this application, as between attorney and client.
JR
Murphy
Judge
of the High Court
Date
heard: 24 November 2017
For
the plaintiff: Adv AP Ellis
Instructed
by: Strauss Daly Inc
For the defendant: Adv HCJ
van Rensberg Instructed by: Bailie Janke Snyman Attorneys
Date of judgment:
[1]
Act 34 of 2005
[2]
Section 83(2) and (3) of the NCA
[3]
Maharaj v Barclays National Bank Ltd
1976(1) SA 418 {A); and
Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint
Venture
2009 (5) SA 1 (SCA)
[4]
"Standard Bank of South Africa Ltd v Kelly
(unreported
case no. 23427/2010 WCC).