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[2014] ZAGPPHC 135
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Botha N.O and Others v Gericke N.O and Another (32759/13) [2014] ZAGPPHC 135 (7 February 2014)
IN THE NORTH
GAUTENG HIGH COURT, PRETORIA
REPUBLIC OF SOUTH
AFRICA
CASE
NO: 32759/13
DATE:
7/2/2014
In the matter
between
JOHANNES WILLEM
BOTHA
N.O.
..........................................................
1ST
PLAINTIFF
JAN JONATHAN
DURAND BOTHA N.O.
..............................................
2ND
PLAINTIFF
JOHN NELSON SMITH
N.O.
...................................................................
3RD
PLAINITFF
(In their
capacities as trustees of the Willem Botha Family Trust IT No.
5443/02)
And
PETRUS PAULUS
GERICKE
N.O.
.......................................................
1ST
DEFENDANT
ELIZABETH GERICKE
N.O.
...............................................................
2ND
DEFENDANT
(In their
capacities as trustees for the time being of the Gericke Family Trust
IT No. 11683/04)
JUDGMENT
THULARE AJ
[1] The Plaintiffs
filed an exception against the Defendant’s plea on the basis
that the plea does not disclose a defence.
The Plaintiffs claim is
based on a loan agreement entered into between the parties on 11 May
2011 in terms of which the Willem
Botha Family Trust lent to the
Gericke Family Trust an amount of R600 000, with no interest payable
in respect of the loan, and
the loan was to be repaid in full on or
before 31 December 2011.
[2] The Plaintiffs
avers that the National Credit Act, 2005 (Act No. 34 of 2005) is not
applicable to the loan agreement.
[3] The only issue
raised by the Defendants in their plea is the application of the
National Credit Act.
[4
] The Defendants
aver that the loan agreement constitutes a credit agreement as
defined in
section 8(1)
read with
section 8(4)(f)
; that in terms of
section 49(1)(b)
read with
section 42(1)
and the applicable
Regulations a person must apply to be registered as a credit provider
if the total principal debt owed to that
credit provider under all
outstanding credit agreement exceeds R500 000-00 and that despite
this the Plaintiffs makes no allegations
that they were duly
registered as credit providers at the date of conclusion of the loan
agreement and that
section 89(2)(d)
stipulates that a credit
agreement is unlawful if, at the time of the conclusion of the said
agreement, it was required of the
credit provider to have been
registered as such and the Plaintiff was in fact not registered.
[5] It seems to me,
on a simple reading of the applicable provisions of the National
Credit Act, 2005 (Act No.34 of 2005) (the Act)
that a distinction
must be drawn between any credit granted, and a credit agreement for
purposes of the Act.
The point of
departure is having regard to the definitions in section 1 of the
Act, more specifically of the word “credit”
and “credit
agreement”. They read:
“credit”.
When used as a noun, means-
(a) A deferral of
payment of money owed to a person, or a promise to defer such a
payment; or
(b) A promise to
advance or pay money to or at the direction of another person.
“credit
agreement” means an agreement that meets all the criteria set
out in section 8”.
Not every credit
granted constitutes a credit agreement for purposes of the Act.
[6] Guidance is
provided in section 2, as regards interpretation of the Act. Section
2(1) provides as follows:
“2(1) This Act
must be interpreted in a manner that gives effect to the purposes set
out in section 3.”
Section 3 gives the
purpose as “to promote and advance the social and economic
welfare of South Africans, promote a fair,
transparent, competitive,
sustainable, responsible, efficient, effective and accessible credit
market and industry, and to protect
consumers, by- …”
The Act strives to
balance the interests of both credit consumers and credit grantors.
[7] It is from this
premise that section 8(1) read with section 8(4)(f) is understood and
interpreted. The applicable provisions
of section 8(1), reads:
“8. (1)
Subject to subsection (2), an agreement constitutes a credit
agreement for the purposes of this Act if it is:
(b) a credit
transaction, as described in subsection (4);” (my emphasis)
Section 8(4)(f)
reads:
“(4) An
agreement, irrespective of its form but not including an agreement
contemplated in subsection (2), constitutes a credit
transaction if
it is-
(f) any other
agreement, other than a credit facility or credit guarantee, in terms
of which payment of an amount owed by one person
to another is
deferred, and any charge, fee or interest is payable to the credit
provider in respect of-
(i) the agreement;
or
(ii) the amount that
has been deferred.” (my emphasis). ]
In my view, the
language in the Act is plain and unambiguous. There are two
requirements to be met by the agreement to constitute
a credit
transaction in terms of this subsection. Simply put, these are that
(1) the payment is postponed to a later time, and
further that (2) a
consideration is charged in respect of the agreement or the amount
for which payment is postponed.
In ABSA Technology
Finance Solutions v Pabi’s Guest House CC and Others 2011(6) SA
606 (FB) at 612 paragraph 22 Kruger J said
the following:
“[22] …
In HCJ Flemming Flemming’s National Credit Act (2009) in the
commentary under s 8 the author is of the
view that s 8 (4)(f) of the
Act operates with a dragnet effect, and clarifies the main target of
the Act as follows:
“It aims to
govern a contract once there is some cost, under whatever name,
attached to the deferment of payment.””
Speaking of this
consideration, Binns-Ward J had this to say in Evans v Smith and
Another 2011(4) SA 472 (WCC) at paragraph 17:
[17] In my view,
read in context, and with regards to the long title of the Act and
the provisions of ss 2 and 3, the words ‘any
charge, fee or
interest’ in s 8(4)(f) of the NCA are seen to be intended to be
of wide import and to include any consideration
payable in respect of
any agreement, such as a loan, in terms whereof payment of an amount
owed by one person to another is deferred,
or in terms of which a
consideration is charged by the grantor for the extension of credit
to the grantee. The label attached by
the parties to the
consideration in their agreement is not important. It is the nature
as an amount payable as consideration in
respect of the agreement or
the deferment of the payment of the capital amount owed that is
determinant.”
[8] Furthermore,
Mathopo J in Bridgeway Ltd v Markam
[2008] ZAGPHC 251
;
2008 (6) SA 123
(WLD), at page
128 paragraph 24, with reference to Tucker v Ginsberg
1962 (2) SA 58
(W), correctly so in my view, held that regard must be had to the
nature of the transaction, the substance of the transaction,
and the
intention of the parties gathered from their conduct.
[9 The Plaintiffs
lent money to the defendants and the payment thereof was postponed to
a later time, and no consideration was charged
in respect of the
agreement or the amount for which payment was postponed. The second
requirement for the agreement to qualify
as a credit transaction in
terms of the Act has not been met and I conclude that the agreement
falls short of the requirements
set out in section 8(4)(f) of the
Act.
The agreement
between the parties does not constitute a credit agreement for the
purposes of the Act.
It follows that the
Plaintiffs are not credit providers as envisaged in the Act, simply
because there is no credit agreement for
purposes of the Act between
the parties, and I conclude that the argument that the Plaintiffs
should have registered as credit
providers must fail. The argument of
the agreement being unlawful for want of that registration is without
merit.
[10] In my view,
having regard to the nature and substance of the defence raised in
the papers before me, this is one of those rare
opportunities where
there is no need for the court to consider granting the Defendants an
indulgence, which includes an opportunity
to amend their papers if so
advised. The Defendants admit all the other material averments made
by the Plaintiffs. There is no
basis, in my view, to deny the
Plaintiffs the benefit of a judgment to which they are entitled,
under the circumstances.
I make the following
order:
1. The exception is
upheld.
2. Paragraph 7 of
the Defendants’ plea is set aside.
3. Judgment is
granted in favour of the Plaintiffs against the Defendants for
payment of an amount of R600 000-00 plus interest
at 15.5% per annum
from 1 January 2012 to date of payment
4. Defendants to pay
the costs.
DM
THULARE
ACTING JUDGE OF
THE HIGH COURT