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[2016] ZAGPPHC 403
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Nedbank v Moloi and Other (962.2016) [2016] ZAGPPHC 403 (1 June 2016)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
REPUBLIC
OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH
AFRICA
GAUTENG
DIVISION,
PRETORIA
CASE
NO: 962/2016
DATE: 1
JUNE 2016
NOT
REPORTABLE
NOT OF
INTEREST TO OTHER JUDGES
In
the matter between:
NEDBANK
LIMITED
.....
..................................................................
APPLICANT/PLAINTIFF
and
THABOELIAS
MOLOI
FIRST
.
.............................................
..
RESPONDENT/DEFENDANT
NELISIWE
OCTAVIA MOLOI
..
.............................
.
SECOND
RESPONDENT/DEFENDANT
…
...........................................................................
SECOND
RESPONDENT/DEFENDANT
JUDGMENT
RANCHOD
J:
[1]
This is an application for summary judgment which is opposed by the
respondents who are the defendants in the action.
[2]
It is necessary to set out the chronology of events.
[3]
The first mortgage bond registered on 21 June 2006 in favour of the
applicant over the respondents property was for an amount
of R130
000.00. A second mortgage bond was registered on 21 November 2006 for
R60 000.00 and a third one was registered on 22 April
2008 for R171
721.00.
[4]
On 18 October 2014 the respondents entered into a 'Distressed
Restructure Agreement.' It appears that the three bonds were
consolidated into one.
[5]
On 28 January 2015 a debt counsellor, Mr Hein du Plessis (Du Plessis)
informed the respondents' creditors that they have applied
for debt
review in terms of s86 of the National Credit Act 34 of 2005 (the
NCA). On 10 March 2015 Du Plessis informed creditors
that the
application was successful. Thereafter Du Plessis issued a proposal
dated 14 July 2015 for re-structuring the debts.
[6]
On the same day, i.e. 14 July 2015 the applicant declined the re-
structure proposal.
[7]
About three and a half months later, on 30 November 2015 Du Plessis
made a finding in terms of
s79(1)
of the
National Credit Act that
the
respondents are over- indebted and made a so-called 'Instalment
Offer' to the applicant.
[8]
On 11 December 2015 the applicant despatched a letter by registered
post to the respondents informing them that in terms of
s86(10)
of
the
National Credit Act the
debt review process has been terminated
in respect of the respondents' account No. 8138 4353 41801 which
relates to the several
mortgage bonds referred to above over the
respondents' one of two residential properties. There is a mortgage
bond over the other
property registered in favour of the applicant.
The re- structuring of the debt in respect of that property was
apparently accepted
by the applicant. A similar letter but dated 4
January 2015 (it was accepted that this was a typing error and the
year should in
fact be 2016) was again despatched to the respondents.
[9]
The debt counsellor and the National Credit Regulator were also
informed of the termination of the debt review.
[10]
On 8 January 2016 the applicant issued summons and, after the
respondents entered appearance to defend, applied for summary
judgment.
[11]
The crisp issue to be determined is whether the applicant validly
terminated the debt review proceedings in relation to the
debt under
account [No. 81...]
[12]
The respondents' primary contention is that the applicant did not
participate in the debt review proceedings in good faith.
Section
86(5)
of the
National Credit Act provides
:
'A
consumer who applies to a debt counsellor and each credit provider
contemplated in subsection (4)(b) must
(a)
...
(b)
participate in good faith in the review and in any negotiations
designed to result in responsible debt re-arrangement."
[13]
The respondents contend that the applicant was unreasonable in
terminating
the debt review after Du Plessis had made the proposal dated 30
November 2015. It is contended that the applicant should
have
participated in the proposal or at least have made a counter-
proposal. In
Firstrand Bank vs Adams and Another 2012(4) SA
14
it was held [I quote from the headnote]:
'A
court may, during summary judgment proceedings initiated by a credit
provider, on application by the consumer in terms of
s 86(11)
of the
NCA, order an adjournment to allow the consumer an opportunity to
argue that the debt-review process should be resumed so
as to provide
an opportunity for further negotiations between the parties. In order
to decide whether there would be any benefit
in so postponing the
summary judgment application, the court must strike a balance between
the interests of the parties, taking
into consideration the nature of
the dispute, whether the parties acted in good faith during their
negotiations, and the prospect
of a rearrangement that, within the
parameters of the Act, will ensure the discharge of the consumer's
obligations. Any proposal
in this regard by the consumer has to fall
within the parameters of the NCA, so that it may not be based on a
reduction of the
contracted interest rate. (Paragraphs [20], F [22],
[26] - [28] and [30] at 18G - I, 198 - C, 191 - 20E.).'
[14]
In
Firstrand
Bank
tla FNB
v Seyffert 2010(6)
SA 429
GSJ
at 435
para
[12] Willis J (as he then was) said:
'A
plain reading of s 86(10), especially when read together with s
86(11), makes it clear that the giving of notice by a credit
provider
to a consumer to terminate a process of debt review does not
necessarily terminate that process of debt review, but may
have this
consequence. In plain English, a 'notice' denotes an intention, a
preliminary step towards a consequence, rather than
the consequence
itself. In the particular context with which one is now concerned, it
all depends on the extent to which the parties
show good faith to one
another, have sensible, fair and reasonable proposals and actively
engage with one another to find realistic
solutions to a particular
consumer's problems. Providing incentives for good sense and fairness
on all sides will go a long way
to achieving the objectives of the
Act.'
I
respectfully align myself with this view.
[15]
In Collett v Firstrand Bank 2011(4) SA 508 SCA it was held - I quote
the headnote:
'A
credit provider may terminate a debt review in terms of
s 86(10)
of
the
National Credit Act 34 of 2005
even after the matter has been
referred to the magistrates' court for a rearrangement order in terms
of
s 87
of the NCA. (Paragraphs [6] and [14] at 511E - F and 5178 -
D.) This right is, however, counterbalanced by the obligation of both
the credit provider and consumer to participate in the debt-review
process in good faith so as to achieve a responsible debt
rearrangement.
A failure to do so by the credit provider may lead to
a resumption of the debt review under
s 86(11).
(Paragraph [15] at
517E - G.) There is a lacuna in
s 86(11)
, and the words 'or High
Court' must be read in after the words 'Magistrate's Court': this
will ensure that the magistrates' court
and the High Court hearing
proceedings to enforce a credit agreement may grant an order for the
resumption of the debt review.
(Paragraph [17] at 518C/D - E.).'
[16]
The applicant's primary submission is that the respondents did not
take any further steps for more than a year since applying
for debt
review in January 2015. It is so that no further steps were taken by
respondents within 60 days but then neither did the
applicant give
notice in terms of
s86(10)
of the NCA immediately after the 60 days
expired.
[17]
Du Plessis re-structured the debt on 14 July 2015. The applicant
declined it and said:
'We
refer to the application for debt review in terms of
section 86
of
the [NCA] and to the debt arrangement proposal dated 14 July 2015.
The debt re-arrangement proposal has not been accepted due
to the
following reason/s. The re-arrangement proposal does not solve and/or
does not lead to the eventual satisfaction (sic).
No proposal
received. Kindly send us a proposal. Please take note the following:
Non primary residence (refer our previous notes).'
[18]
The applicant's response does not make sense as it refers to the
'debt re- arrangement proposal' dated 14 July 2015 but further
down
the line says 'No proposal received. Kindly send us a proposal.' It
is also stated that the proposal 'does not lead to the
eventual
satisfaction' and is then left hanging in the air, as it were.
[19]
Reference is also made to the property not being the primary
residence of the respondents. However, in the particulars of claim
it
is stated that the property is the primary residence of the
respondents.
[20]
In any event, Du Plessis did make a proposal dated 30 November 2015
but on 11 December 2015 and again on 4 January 2016 the
applicant
sent letters in terms of
s86(10)
terminating the debt review and
issued summons on 8 January 2016.
[21]
In these circumstances it cannot be said that the applicant
participated in the debt review process in good faith. No counter•
proposal was made by the applicant.
[22]
One further aspect must be mentioned. The applicant had accepted a
debt re- structure proposal in respect of the respondents'
debt due
in terms of a mortgage bond registered over another residential
property of the applicants. It appears from the declination
of the
proposal dated 14 July 2015 where it is stated that the property in
question is a 'non primary residence' and applicant's
counsel's
submission during the summary judgment hearing to that effect, that
it was rejected for that reason.
[23]
As I understand it, there is no distinction made in the NCA between
the primary and non-primary residence of a debtor. The
NCA simply
speaks of the debts of a debtor without even limiting it to a
residential property - let alone the primary residence
of a debtor.
The issue of whether a residence is the primary residence of a debtor
has been stated in case law as a part of the
criteria to be applied
in the judicial oversight of the applications for the issuing of
warrants of execution for the sale of a
debtor's residential
property.
[24]
In my view, given the fact that,
inter alia,
the respondents
have been paying off the mortgage bonds for some 10 years now, and
that the applicant has accepted a restructuring
of the debt in
respect of the other property of the respondents, it would be
appropriate to order a resumption of the debt review.
[25]
I make the following order:
1.
The application for summary judgment is postponed sine die.
2.
The debt review which was terminated by the applicant is to
be
resumed.
Costs
are costs in the cause.
_____________________
RANCHOR
J
JUDGE
OF THE HIGH COURT
Appearances:
..
...........................................:
Counsel
on behalf of Applicant
........................
:Adv
J Minnaar
Instructed
by
....................................................
:
Hammond Pole Attorneys
Counsel
on behalf of Respondent
...................
:
Adv E.J.J Nel
Instructed
by
....................................................
:
Van Der Hoven Attorneys
Date
heard
.......................................................
:
2 April 2016 .
Date
delivered
..................................................
:
1·June 2016