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[2017] ZAKZPHC 58
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Less v Vosloo and Others (7520/17P) [2017] ZAKZPHC 58 (22 September 2017)
SAFLII
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Certain
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IN
HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Reportable
CASE
NO: 7520/17P
In
the matter between
TRACEY-ANN
LESS
Applicant
(ID
No.: […])
and
JOHANNA
WILHELMINA
VOSLOO
First
Respondent
ABSA
BANK
LIMITED
Second
Respondent
FNB,
A DIVISION OF FIRSTRAND
LIMITED
Third
Respondent
CONSUMER
FRIEND
Fourth
Respondent
MFC,
A DIVISION OF NEDBANK
LIMITED
Fifth
Respondent
NEDBANK
LIMITED
Sixth
Respondent
STANDARD
BANK OF SA
LIMITED
Seventh
Respondent
JUDGMENT
Delivered on: 22 September 2017
BEZUIDENHOUT,
J
[1]
Applicant, during March 2013, made application in terms of
section
86(1)
of the
National Credit Act 34 of 2005
to first respondent, a
debt counsellor, to have herself declared over indebted. A copy
of such application is not attached
to these papers, nor are Forms
17.1 and 17.2.
1.1 It is accordingly not
possible to determine when the said forms were sent to the credit
providers and credit bureaus and if
in fact it was indeed done as
applicant only states in paragraph 11 of her founding affidavit that
“First respondent advised
me that the Form 17.2 has been issued
as per paragraph 2 and that there is no court order in respect of my
debt review.”
1.2 There is no court order
declaring applicant over indebted, and also no such attachment to the
papers.
[2]
Applicant now seeks the following relief:
1.
That she be declared no
longer over indebted and under debt review.
2.
That the Credit Bureau
remove the debt review status from applicant’s credit reports.
3.
That the debt counsellor
provides Form 17.W confirming that applicant is being declared to be
no longer over indebted.
[3]
Applicant avers she has paid off certain of the credit providers
listed in paragraph 7 of her affidavit and is making direct
payments
to the outside credit providers in the amounts set out in paragraph
11 of her affidavit.
3.1 Annexure “A”, a
consumer statement, to her affidavit sets out certain payments made
to credit providers as at 9
June 2016.
[4]
She avers that she is being prejudiced, as she cannot apply for a
rental agreement, etc.
[5]
It is not possible to determine whether the direct payments made are
what the payments should be, if not how much less and whether
the
credit providers have accepted it.
5.1 It cannot be determined
whether she is still over indebted or not.
5.2 However, due to the
conclusion I have reached it is not necessary to decide this issue.
[6]
It has been submitted that Annexure “C” to the founding
affidavit, is a copy of the guidelines for the withdrawal
from debt
review, and it is apparent therefrom that a debt counsellor does not
have the statutory powers to terminate or withdraw
the debt review
process. Applicant therefore has no other option but to
approach the High Court because of its inherent jurisdiction
as it
cannot be done in the magistrate’s court which is a creature of
statute. There is nothing in the Act and regulations
which set
out what must be done in such a case.
[7]
The question that arises is, if she is no longer over indebted and
the application to declare her over indebted was never issued
and
filed at the magistrate’s court nor was an order to that effect
granted by the magistrate’s court, must this court
then grant
an order that she is no longer over indebted if there is no specific
provision in the Act to do so, and there is no
court order.
[8]
The restructuring was never confirmed by any court in terms of
section 87(1)
of the
National Credit Act 34 of 2005
, nor is any
restructuring agreement agreed to between all the parties attached to
the papers.
8.1
In
Nedbank v National
Credit Regulator
2011
(3) SA 581
(SCA) it was held at 598c:
“
In terms of
s86(7)(c)
the
debt counsellor may “issue a proposal” that the
magistrate’s court make certain orders. It is not said
that he ‘must’ do so but, given his duty in terms of
ss(6) and his position as statutory functionary, he must issue
the
proposal.”
8.1.1
The debt counsellor having found that the debtor is over indebted,
must issue a proposal restructuring the debt, and submit
this to the
magistrate’s court for a hearing and the granting of the
necessary order. If this is not done the debt
counsellor has
failed to comply with his duties and obligations in terms of the Act.
8.1.2
It is clear from
Nedbank
v National Credit Regulator
that there must be judicial oversight to declaring a person over
indebted and the restructuring of his/her debt.
8.1.3
Until the magistrate’s court has thus made an order approving
the over indebtedness and restructuring no declaration
of over
indebtedness has occurred.
8.1.4
Form 17.2 used by the debt counsellor does not reflect the correct
position as it fails to incorporate the judicial oversight
required
and that any application for a declaration of over indebtedness and
restructuring must be approved by the magistrate’s
court.
Form 17.2 is also incorrect in stating that the application for debt
review was successful.
[9]
In terms of
section 86(1)
of the
National Credit Act a
consumer can
apply to a debt counsellor to be declared over indebted.
Section 86(4)
stipulates that on receipt of such an application the
debt counsellor must provide proof of receipt of the application and
notify
in the prescribed manner and form all credit providers listed
and every registered credit bureau.
Section 86(6)
stipulates a
debt counsellor who has accepted an application in terms of the
section must determine within the prescribed time
whether the
consumer is over indebted and if it is concluded that he is over
indebted then in terms of
section 86(7)(1)(c)
the debt counsellor may
issue a proposal recommending that the magistrate’s court make
either or both of the certain orders
as provided for in the said
section.
9.1
Section 24(9)
of the Act
further provides that any arrangements by a debt counsellor with a
credit provider must be reduced to writing and signed
by all the
credit providers, the debt counsellor and the consumer.
9.2 No such document is attached
and it does not appear from the papers that any arrangement had
indeed been made by the debt counsellor
which was accepted by all the
parties.
9.3 From the above it would
appear that the requirements of the
National Credit Act have
not been
complied with. No restructuring could have occurred until an
application was brought to the magistrate’s court
and the court
confirmed the over indebtedness and debt restructuring.
[10]
In terms of
section 86(1)
of the
National Credit Act a
consumer can
apply to a debt counsellor to be declared over indebted.
Section 86(4)
stipulates that on receipt of such an application the
debt counsellor must provide proof of receipt of the application and
notify
in the prescribed manner and form all credit providers listed
and every registered credit bureau.
Section 86(6)
requires a
debt counsellor who has accepted an application in terms of the
section to determine within the prescribed time whether
the consumer
is over indebted and if it is concluded that he is over indebted then
in terms of
section 86(7)(1)(c)
the debt counsellor may issue a
proposal recommending that the magistrate’s court make either
or both of the certain orders
as provided for in the said section.
The word “may” suggests that it is discretionary to issue
and file the application
at the magistrate’s court. As
set out in paragraph 2 above it is not discretionary and the word
“may” must
be read as “must”.
[11]
I have been referred to the unreported judgment of
Malesela
David Manamela v Hein Du Plessis t/a Debt Safe and 6 Others
in the Gauteng Division,
Pretoria
where
an order was granted that the applicant was no longer over indebted.
No details of the case is provided and in my view
is distinguishable
as will appear from this judgment.
11.1
I was also referred to
Rougier
v Nedbank Ltd
Case No
27333/2010 South Gauteng, where it was held that it was ultra vires
for a debt counsellor to withdraw a debt review instituted
in terms
of
section 86(1)
of the Act. It is only instituted when the
application is filed and issued at court. That is the position
in the case
of business rescue applications as held in
Blue
Star Holdings v West Coast Oyster Growers
2013 (6) SA 540
(WCC). In my view the same principles apply.
[12]
What is the position in the present case? There is nothing in the Act
or its Regulations which sets out how, once an application
for a
declaration of over indebtedness has been submitted to a debt
counsellor who had not yet issued and served such application
at the
magistrate’s court to be made an order of court, can be
stopped, or cancelled.
12.1 It
has been submitted that the guidelines of the withdrawal from debt
review provides certain options how such an application
can be
withdrawn but does not cater for this situation, and that only a High
court due to its inherent jurisdiction has the power
to declare a
consumer no longer over indebted. These are clearly guidelines and
not specific procedures.
12.2 It is
further submitted that it would be ultra vires for the debt
counsellor to withdraw the application. The application
is only
instituted once it is issued and filed at court. Prior to that
the debt counsellor only reaches a conclusion as to
over indebtedness
and prepares a restructuring of the debt. Debt review has not
yet been instituted. Once the application
is issued and filed
the debt review is instituted.
12.3 Until
a magistrate has ruled thereon there is only an application pending,
and no declaration of over indebtedness and restructuring.
[13]
What happens as in the present case when the debt counsellor sends
out notices 17.1 and 17.2 but fails in his/her duty to issue
and
serve the application at the relevant magistrate’s court.
13.1 The
issuing of the application at the magistrate’s court is the
date the application is instituted as thereafter various
factors may
cause the application to be adjourned.
13.2 The
debt counsellor must ensure that the over indebted consumer receives
the necessary assistance within a reasonable time
of receiving the
application for a declaration of over indebtedness and ensure that
the application is issued and filed at the
magistrate’s court
for its judicial oversight and approval and only when approved will
such an order ensue.
13.3 What
is a reasonable time? In the present case the application to the debt
counsellor was made during April 2016 and by August
2017 no such
application had been issued and filed at the magistrate’s
court. Nearly four (4) years later cannot be
a reasonable time
nor in the interest of the consumer or credit providers.
Section 86(10)
of the Act allows for a period of 60 days after which
a credit provider may apply to have the debt review terminated if
there was
no cooperation.
13.3.1
The debt counsellor must obtain information from the consumer, assess
the application and prepare a restructuring of the
debt and draft the
necessary application to the magistrate’s court. In my
view a period of 90 days from the date of
the application for a
declaration of over indebtedness by the consumer to the debt
counsellor should be sufficient to do so and
to issue and serve the
application at the relevant magistrate’s court for its
decision.
13.3.2
If this is not done, the consumer cannot be prejudiced and wait
indefinitely for the debt counsellor to comply.
The consumer
and credit providers are being prejudiced, as there is no valid debt
rescheduling because the magistrate’s court
has not approved
such and made no order.
13.4 The
intention of the Act is to ensure that consumers who are over
indebted receive the necessary assistance within a reasonable
time.
They are in the majority of cases already in a vulnerable position.
13.5 If
the debt counsellor fails to issue and serve the application at the
magistrate’s court within 90 days after receiving
the
application, the consumer if he/she so wishes must after the expiry
of the 90 days be able to stop the whole process.
The consumer
can in such a situation at any time before the application is issued
and filed at the magistrate’s court inform
the debt counsellor
that he/she must not proceed with the application. The debt
counsellor must then inform the credit bureau
to remove the name of
the said consumer from all its records.
[15]
The position therefore appears to me to be follows:
15.1 A
debt counsellor after receiving an application from a consumer to be
declared over indebted must follow the process as set
out in the Act.
15.2 A
debt counsellor must within 90 days of receiving an application for a
declaration of indebtedness and restructuring from
a consumer issue
and file such application at the relevant magistrate’s court
for approval.
15.3 The
application for a declaration of over indebtedness and restructuring
is only instituted once it is issued and filed at
the magistrate’s
court. Until then it is merely a pending application.
15.4 If
this is not done by the debt counsellor, the consumer can after the
expiry of a period of 90 days and before the application
is issued
and filed notify the debt counsellor in writing not to proceed with
the application.
15.5 The
debt counsellor must notify the credit bureaus accordingly.
15.6 The
relevant credit bureaus must then remove such consumer’s name
from the relevant records.
[16]
As no application for a declaration of over indebtedness and
restructuring had been instituted there has not been any valid
declaration of over indebtedness. The relief as sought in the notice
of motion can therefore for the reasons set out above not
be granted.
[17]
The application is dismissed.
________________
BEZUIDENHOUT,
J
Date
of hearing
: 17
August 2017
Date
delivered
: 22
September 2017
Appearances
:
For the
Applicant
:
Ms Dhoda
Instructed
by
:
Campbell Attorneys
011 616 2665
Ref:NC/alm/N1603
c/o Stowell & Co Attorneys
033 845 0500