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[2017] ZAFSHC 142
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Firstrand Bank Limited v Horing and Another (2134/2017) [2017] ZAFSHC 142 (31 August 2017)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 2134/2017
In
the matter between
FIRSTRAND
BANK LIMITED
Plaintiff
and
JACOB
HORING
First
Defendant
ANNIE
HORING
Second
Defendant
CORAM:
NAIDOO, J
HEARD
ON:
10 AUGUST 2017
DELIVERED
ON:
31
AUGUST 2017
[1]
This is an application for summary judgment. The plaintiff issued
summons against the defendants for payment of the amount of
R261
085.81, interest thereon, an order declaring the defendants’
immovable property executable and costs. The debt allegedly
arises
from the defendants’ breach of a loan agreement between the
parties. The defendant opposed the summary judgment application.
Mr J
Els represented the plaintiff and Mr R Coetzee represented the
defendants.
[2]
The plaintiff alleges, in its Particulars of Claim, that the parties
entered into two loan agreements on 12 September 1996 and
19 July
2007 respectively. The defendants registered mortgage bonds, in
favour of the plaintiff, over their immovable property
as security
for the loans. The plaintiff alleges that the defendants failed to
make punctual payments of their instalments in terms
of the loan
agreements and were consequently indebted to the plaintiff in an
amount of R261 085.81, and remained so indebted as
at the date that
the summons was issued.
[3]
The plaintiff further alleged that the defendants applied for debt
review in terms of the National Credit Act 34 of 2005 (NCA)
and that
its claim was subject to the debt review process. The plaintiff,
however, terminated the debt review in terms of section
86(10) of the
NCA as a result of the defendants’ failure to comply with the
provisions of the debt review process, and proceeded
to enforce the
loan agreements entered into between the parties.
[4]
The defendant disputes the jurisdiction of this court on the basis
that the parties agreed that any action or legal proceedings
would be
instituted in the Magistrate’s Court and that in terms of
section 90(2)(k)(vi) of the NCA it would be unlawful to
institute
action in any other court, as the Magistrate’s Court has
concurrent jurisdiction. Furthermore the amount claimed
falls within
the jurisdiction of the Magistrate’s Court. The defendant
raised the further defence that the Magistrate’s
Court,
Bloemfontein granted, in their favour, a debt restructuring order on
8 September 2011 and that their obligations to the
plaintiff in terms
of the loan agreements were restructured in terms of the debt
restructuring proposal. The defendants denied
being in default of the
payments in terms of the debt re-arrangement order, and asserted that
the plaintiff was not permitted,
in terms of section 88(3) of the
NCA, to enforce their rights in terms of the credit agreements
where the defendants were
not in breach of the debt re-structuring
agreement.
[5] Uniform Rule 32(3)(b)
provides the defendant may
“
satisfy the court
by affidavit (which shall be delivered before noon on the court day
but one preceding the day on which the application
is to be heard) or
with the leave of the court by oral evidence of himself or of any
other person who can swear positively to the
fact that he has a
bona
fide
defence to the action; such affidavit or evidence shall disclose
fully the nature and grounds of the defence and the material facts
relied upon therefor”
.
The
defendant is therefore required to have a bona fide defence that is
good in law. In the matter of
Breitenbach
v Fiat SA (Edms) Bpk 1976(2) SA 226 (TPD), Colman J stated at p227 G
"One
of the things clearly required of a defendant by Rule 32(3)(b)is that
he set out in his affidavit facts which, if proved
at the trial, will
constitute an answer to the plaintiff's claim".
[6]
In order for the court to assess whether the defence raised by a
defendant is bona fide he/she must provide adequate information
about such defence, which amounts to a full disclosure of his/her
defence. While the sub-rule requires the defendant to
"disclose
fully the nature and grounds of the defence and material facts relied
upon",
it
does not, however, demand the impossible and it will suffice
"
if
the defendant swears to a defence, valid in law, in a manner
which is not inherently and seriously unconvincing".
(See Breitenbach
above)
[7]
It is clear that the debt re-structuring order was granted by the
Magistrate’s Court in September 2011. The summons in
this
matter was issued in May 2017. One can only assume that the
defendants were complying with the debt re-structuring agreement
for
a number of years. The plaintiff’s Particulars of Claim are
devoid of any details of the debt review and restructuring
process,
how the defendants are alleged to have defaulted in respect thereof
and what amount would then have been outstanding.
The plaintiff
proceeds, ostensibly in respect of the arrears under the credit
agreements, without providing details of the indebtedness
of the
defendants, taking account of the fact that their obligation to the
plaintiff was the subject of the debt restructuring
arrangement and
that payments in respect thereof must have been made. If the amount
claimed in the summons takes into account the
payments received in
terms of the debt re-structuring arrangement, this is not made clear
in the summons.
[8]
I turn to deal with the defence regarding jurisdiction of this court.
I am in agreement with Mr Els’ submission that consent
to
jurisdiction of the Magistrate’s Court by the defendant does
not oust the jurisdiction of the High Court. Mr Coetzee referred
to
the matters of
Nedbank
Ltd v Mateman & Others; Nedbank Ltd v Stringer &
Another 2008(4)SA 276 (T)
(also
referred to by Mr Els) and
Absa
Bank Ltd v Myburgh 2009(3) SA 340 (T)
to
support his contention that this court does not have jurisdiction
because the defendants consented to the jurisdiction of Magistrate’s
Court. The court in the Nedbank matter held that a clause in which
the defendant consents to the jurisdiction of the Magistrate’s
Court, and the plaintiff merely reserves its right to approach the
High Court (which is the position in this matter), does not
contravene the provisions of section 90(2)(k)(vi), and is not
unlawful. I pause to note that section 90(2)(k)(vi)(aa) makes
it unlawful to have a provision in a credit agreement
consenting to the jurisdiction of the High Court while the
Magistrate’s
Court has concurrent jurisdiction. This is not the
situation in this matter, so that contention on behalf of the
defendants has
no merit.
[9]
Mr Coetzee argued that the Absa Bank matter gave the defendants the
leeway to argue that it is unlawful to institute proceedings
in the
High Court while the Magistrate’s Court has concurrent
jurisdiction. The court remarked at p346 paragraph 52 that
section 2
of the NCA commands an interpretation of the Act that gives effect to
the purposes of the Act set out in section 3. In
the court’s
opinion (para 53), this
“
must
be read as declaring unlawful ‘the practice of instituting
action in the High Court to enforce the credit provider’s
rights in terms of a credit agreement while a magistrates’
court has concurrent jurisdiction’.”
[10]
While I do not venture as far as to say that the practice must be
declared unlawful, I agree with the court’s sentiments
in para
54 that this practice flies in the face of the stated aims of the Act
to lighten, as much as possible, “the financial
burden that the
conclusion of a credit agreement may impose on the consumer”,
and that it should not be tolerated. In circumstances
where the
credit provider chooses to proceed in the High Court, especially
where the claim falls within the jurisdiction of the
Magistrate’s
Court, the court should show its displeasure by making an appropriate
costs order. Therefore a plaintiff who
chooses to proceed in the High
Court, while the Magistrate’s Court has concurrent jurisdiction
should not complain if he
is awarded costs on the Magistrate’s
Court scale, or if a punitive order for costs is made against him,
should the circumstances
warrant it. The defence, in this matter,
that this court does not have jurisdiction is, in my view not a
proper defence and does
not avail the defendants.
[11]
It is well settled in our law that summary judgment should only be
granted where the plaintiff has established his claim clearly
and the
defendant has failed to establish a bona fide defence. In considering
whether the plaintiff in this matter is entitled
to summary judgment,
it must be determined whether the plaintiff has shown not only that
it has a claim which falls within the
ambit of Uniform Rule 32, but
that it has taken all steps to perfect its claim and make it
unanswerable
.
Mr Els did
not raise any substantial argument when the court pointed out that
the plaintiff’s Particulars of Claim was lacking
in detail
regarding the debt review process, and the default by the defendants
in terms thereof. The defence that the defendants
are not in breach
of the debt re-structuring arrangement, and therefore the plaintiff
was not entitled to terminate the debt review
and enforce the credit
agreements is, in my view, one which, if established at the trial,
will constitute a good and, possibly,
a complete defence to the
plaintiff’s claim.
[12]
To my mind, the evidence before me, indicates that the plaintiff has
not clearly established its claim. Section 32(5) gives
the court a
discretion to grant or refuse summary judgment. In this matter it is
reasonably possible that the defendants have a
good defence in that
they will be able to establish either that they do not owe the
plaintiff the amount that it claims or that
it was not entitled to
issue summons against them. (
Mowshenson
& Mowshenson v Mercantile Corporation of SA Ltd
1959 (3) SA 362
(W) at 366F-G
).
The granting of summary judgment is based upon the supposition that
the plaintiff's claim is unimpeachable and also that the
defendant's
defence is bogus or bad in law – per
Corbett
JA in Maharaj v Barclays National Bank Ltd 1976(1) SA 418 (A) at
423G-H
.
[13]
In this matter, I am unable to find that the defence put forward by
the defendants is bad in law. I am of the view that granting
summary
judgment would amount to unsuiting the defendants and would be unduly
prejudicial to them. In my view, therefore,
summary
judgment ought not to be granted. With regard to the further conduct
of this matter, the plaintiff will be well advised
to transfer the
matter to the Magistrate’s Court in order to mitigate the costs
herein and to give effect to the purposes
of the NCA mentioned above.
ORDER
[14]
In the circumstances, I make the following order:
14.1
The summary judgment application is dismissed
14.2
The defendants are given leave to defend the action
14.3
Costs to be costs in the action.
14.4
Should the plaintiff transfer the matter to the Magistrate’s
Court, a copy of this judgment is to be
placed in the court file at
the Magistrate’s Court
________________________
S.
NAIDOO J
On
behalf of Plaintiff
:
Adv J Els
Instructed
by:
Roussouws Attorneys
119 President Reitz Ave
Westdene
Bloemfontein
(Ref:
FIR50/1285(JHC/MMA))
On
behalf of Defendant:
Mr R Coetzee
Instructed
by:
Dteenkamp & Jansen
Inc
60 Krause Street
Oranjesig
Bloemfontein
(Ref: R
Coetzee/TOY/HOR2/ 0003)