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[2015] ZAGPPHC 57
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Nedbank Ltd v McGovern (57075/14) [2015] ZAGPPHC 57 (6 February 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION. PRETORIA)
CASE NO: 57075/14
DATE: 6 FEBRUARY
2015
IN THE MATTER
BETWEEN
NEDBANK
LTD
...................................................................................................................
Plaintiff
and
KBT McGOVERN, KIM
BERNADIE
THORA
..............................................................
Defendant
JUDGMENT
LEGODI. J
[1] This is an
application for summary judgment. The application is opposed. The
parties will be referred to as in the main action.
The plaintiff,
NEDBANK Ltd seeks the return to it, of a motor vehicle HYUNDAI ACCENT
1.6 GLS 2008 model, engine number G4EDD8010567.
[2] The vehicle is
the subject of installment sale agreement entered into on 3 June 2008
between the defendant, Kim Bernadine Thora
McGovern and Motor Finance
Corporation (Pty) Ltd t/a MFC whose all its right, title and interest
in the agreement were ceded to
NEDBANK. The agreement is subject to
the provisions of the National Credit Act No 34 of 2005 (hereinafter
referred to as the (“Act”).
[3] The issue at
hand is whether the plaintiff is entitled to enforce the agreement
after having given notice of termination of
the debt review on the 16
April 2013 in terms of section 86(10). A brief background to the
dispute is necessary.
[4] On the 2 January
2031 Debtsafe Debt Counselors gave notice in terms of section
86(4)(b)(i)(ii) of the Act. The section provides
as follows:
“
(4)
On receipt of an application in terms of subsection (1), a debt
counsellor must-
(a)
...
(b) notify, in
the prescribed manner and form-
(i) all credit
providers that are listed in the application; and
(ii) every
registered credit bureau”.
[5] On the 16 April
2013 Debtsafe Debt Counsellors gave notice terminating debt review
application because of the defendant’s
‘non-payment’.
[6] Subsequent
thereto, the plaintiff gave notice of termination of debt review
proceedings in terms of section 86(10). Section
86(10) provides as
follows:
“
If
a consumer is in default under a credit agreement that is being
reviewed in terms of this section, the credit provider in respect
of
that credit agreement may give notice to terminate the review in the
prescribed manner to-
(a) the consumer;
(b) the debt
counsellor; and
(c) the National
Credit Regulator, at any time at least 60 business days after date on
which the consumer applied for the debt review”.
[7] In the notice,
under section 86(10) referred to above, the plaintiff stated as
follows:
“
2.4
On
25 April 2013
plaintiff
duly served section 86(10) notices upon the defendant, the National
Credit Regular and the debt counsellor Debtsafe, the
relevant part of
which statutory notice reads as follows:
On behalf of
Nedbank we hereby give notice in terms of
section 86(10)
of the
National Credit Act of Nedbank
’s withdrawal from your
application for debt review, as a period of sixty (60) business days
have lapsed since receipt of
such application without any decision
and/or referral to a competent court. Your payments are furthermore
not in accordance to
industry guidelines and does not make economic
sense.
As your account
remains in default without just cause, our client hereby give notice
of their (sic) intention to immediately enforce
their rights in terms
of the agreement in accordance with the provisions of the National
Credit Act.”
[8] On the 15
October 2013 another debt counsellor Sparkman Consulting gave a
notice as envisaged in section 86(4)(b)(i)(ii). On
the 10 December
2013 the debt counselor aforesaid, found the defendant to be
over-indebted and a proposal was made.
[9] On the 22 May
2014 the defendant applied to the Magistrate’s Court White
River purportedly in terms of section 86(8)(b)
subsequent to the
notice issued by debt counsellor Sparkman Consulting on the 15
October 2013. Subsection (8)(b) provides as follows:
“
If
a debt counselor makes a recommendation in terms of subsection (7)
(b) and-
“
(b)
if paragraph (a) does not apply, the debt counselor must refer the
matter to the Magistrate’ Court with the recommendations.”
Paragraph (a)
deals with a situation where a recommendation is made unlike in the
present case where the first debt counselor made
no recommendations
and neither did he refer it to the Magistrate’ Court.
[10] Subsection
(7)(b) referred to above reads as follows:
“
If,
as a result of an assessment conducted in terms of subsection (6), a
debt counsellor reasonably concludes that-
(a) ...
(b) the consumer
is not over-indebted, but is nevertheless experiencing, or likely to
experience, difficulty satisfying all the
consumer’s
obligations under credit agreements in a timely manner, the debt
counsellor may recommend that the consumer and
the respective credit
providers voluntarily consider and agree on a plan of debt
re-arrangement;...”
[11] On the 14 July
2014 the plaintiff through its attorneys gave notice of termination
of the agreement due to the defendant’s
default in his
obligations to make monthly payments in terms of the sale installment
agreement.
[12] The defendant’s
counsel, in paragraph 6.2 of his written heads of argument moves from
the premise that the defendant’s
application to be placed under
the first debt review was terminated before the defendant was placed
under debt review thereof and
that ‘subsequently the section
86(10) delivered by the plaintiff purports then to withdraw, from a
debt review, no longer
in existence. Then in paragraph 7.1 of the
defendant’s written heads of argument, is stated as follows:
'7
.1
Pursuant to the fact that it can be accepted that the defendant
was
not
under debt review when the notice was sent, nor was there any such
application pending, it is submitted that the section 86(10)
notice
is irregular and void of any effect”.
[13] Subsections (1)
and (2) of section 86 provide as follows:
"86.
Application for debt review
-
(1) A consumer may apply to a debt counsellor in the prescribed
manner and form to have the consumer declared over-indebted.
(2) An
application in terms of this section may not be made in respect of,
and does not apply to, a particular credit agreement
if, at the time
of that application, the credit provider under that credit agreement
has proceeded to take the steps contemplated
in section 129 to
enforce that agreement".
[14] It is clear
from subsection (2) that a consumer is not entitled to make an
application to a debt counsellor to be declared
over-indebted if at
the time of the application in terms of subsection (1) the credit
provider has already taken steps to enforce
the agreement.
[15] Now on the 25
April 2013, the plaintiff took steps to enforce the agreement against
the defendant. As quoted earlier in paragraph
7 of this judgment, the
defendant was told that his account remained in default and that the
plaintiff intended to immediately
enforce its rights in terms of the
agreement in accordance with the provisions of the
National Credit
Act.
[16
] The defendant
relies on an application to be declared indebted, which was filed
after the 25 April 2013 by the second debt counselor.
In my view, it
does not matter whether the steps to enforce the agreement were taken
in terms of
sections 86(10)
or
129
. The defendant was in default, at
least 60 days after the date on which the defendant applied for debt
review, the defendant having
applied for debt review in January 2013
and the notice in terms of
section 86(10)
having been given on 25
April 2013.
[17] Strictly
speaking, the plaintiff was within its right to terminate the debt
review during April 2013 in terms of
section 86
(10). The purported
termination of the first debt review on the 16 April 2013 by the
first debt counselor, was, in my view, not
a bar to proceeding with
termination of the debt review by the plaintiff in terms of
section
86(10).
That was one step towards enforcement of the plaintiffs
rights in terms of the credit agreement.
[18] In terms of
section 130(1)
a credit provider is entitled to approach the court
for an order to enforce a credit agreement, provided at that time,
the consumer
is in default and has been in default under the credit
agreement for at least 20 days and at least 10 business days lapsed
since
the credit provider delivered a notice to consumer as
contemplated in
sections 86(10)
and
129
(1) as the case may be.
[19] In terms of
section 129(1)
(b), if the consumer is in default under a credit
agreement, the credit provider subject to
section 130(2)
may not
commence any legal proceedings to enforce the agreement before
firstly providing notice to consumer, of relevance, as contemplated
in
section 86(1)
and in
section 86(10)
and having met any requirement
set out in
section 130.
The plaintiff met both the requirements of
sections 86(10)
and
130
. The contention by the defendant on this
point cannot be sustained.
[20] The plaintiff
has been given a notice in terms of
section 86(10)
during April 2013
and the dies mentioned in in
section 130
(1) had lapsed. Clearly, the
notice in terms of
section 86(10)
is a step to enforce the credit
agreement. In the circumstances, the defendant was not entitled to
proceed with the second debt
review on 15 October 2013, the notice to
enforce the agreement in terms of
section 86(10)
having been given on
the 25 April 2013.
[21] There is
another issue that worries me. That is, whether the credit counsellor
was entitled to terminate the debt review proceedings
in terms of
which he gave a notice of on the 22 January 2013.
[22] The debt
counsellor accepted the debt review application dated the 14 January
2013. Subsequent thereto he made a determination
to the effect that
the defendant was over-indebted. Section 86 (7) (c) of the Act
provides as follows:
“
If
as a result of an assessment conducted in terms of subsection (6), a
debt counsellor reasonably concludes that-
(a) ...
(b) ...
(c) the consumer
is over-indebted, the debt counsellor may issue a proposal
recommending that the Magistrate’s Court make
either or both of
the following orders-
(i) that one or
more of the consumer’s credit agreements be declared to be
reckless credit, if the debt counsellor has concluded
that those
agreements appear to be reckless; and
(ii) that one or
more of the consumer’s obligations be rearranged by_
(aa) extending
the period of the agreement and reducing the amount of each payment
due accordingly;
(bb) postponing
during a specified period the dates on which payments are due under
the agreement;
(cc) extending
the period of the agreement and postponing during a specified period
the dates on which payments are due under agreement;
or
(dd)
recalculating the consumer's obligations because of contraventions of
Part A or B of Chapter 5, or Part A of Chapter 6.
[23] Now instead of
referring the matter to the Magistrate’s court to make either
or both of the orders or steps proposed
in subsection (7)) of section
86, the first credit provider cancelled the debt review proceedings.
I am of the view that the credit
counsellor was not entitled to
cancel the debt review. Therefore, termination of the first debt
review by the plaintiff was valid.
The plaintiff was entitled to
cancel the debt review as the defendant was in default at least 60
business days after the date on
which the defendant applied for the
debt review. Lastly, the plaintiff had given notice of cancellation
of the agreement. Such
cancellation was due to the fact that the
defendant failed to honour its obligations in terms of the
installment sale agreement.
The plaintiff therefore, should be found
to be entitled to the relief sought, that is, the return of the motor
vehicle in question.
[24] Consequently an
order is hereby made as follows:
24.1 The defendant
is ordered to forthwith return to the plaintiff the following asset
and to hand it over to a duly authorized
representative of the
plaintiff and or the sheriff:
ONE USED HYUNDAI
ACCENT 1.6 GLS 2008 MODEL, ENGINE NUMBER: G4E D 8010567, CHASSIS
NUMBER: KMHCN41 CR 84249204
24.2 That the
sheriff is authorized to attach and seize the asset aforesaid
wherever it might be found and hand over same to the
plaintiff or
duly authorized representative of the plaintiff;
24.3 Forfeiture of
all monies paid by the defendant to the plaintiff in terms of the
agreement annexed to the plaintiffs summons
as annexure “A”.
24.4 Leave is
granted to the plaintiff to apply for judgment on the same papers in
respect of;
24.4.1 damages if
any, in the amount to be calculated by subtracting the current market
value of the aforesaid goods as well as
the rebate on unearned
financial charges from the balances outstanding, if applicable,
24.4.2 interest on
the said damages at the rate of 10.05%
24.5 Costs of the
application on the scale as between attorney and client to be taxed.
M F LEGODI
JUDGE OF THE HIGH
COURT
FOR THE APPLICANT:
STEENKAMP ATTORNEYS
1 LARCH NOOK
ZWARTSKOPS,
CENTURION
REF: Steenkamp/WS168
TEL: 012 6635200
FOR THE RESPONDENT:
VAN HEERDEN’S INC.
748 Church Street
ARCADIA
Ref: W Van
Heerden/KM1010
Tel: 012 430 6600/1