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[2014] ZAGPPHC 38
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Standard Bank of South Africa Limited: Vehicle And Asset Finance Division v Phoshoko (44040/2013) [2014] ZAGPPHC 38 (27 February 2014)
IN THE HIGH COURT
OF SOUTH AFRICA,PRETORIA
(REPUBLIC OF
SOUTH AFRICA)
CASE
NO: 44040/2013
DATE:
27/2/2014
In the matter
between:
THE STANDARD BANK
OF SOUTH AFRICA LIMITED
:.............................
Applicant
VEHICLE AND ASSET
FINANCE DIVISION
And
LLALA PETER
PHOSHOKO
...........................................................................
Respondent
JUDGMENT
MURPHY J
1. The applicant
seeks summary judgment against the respondent in the form of an order
confirming the cancellation of the instalment
sale agreement entered
into between the parties and the return of a 2001 Toyota Hilux Raider
motor vehicle, being the subject matter
of the sale.
2. It appears from
the particulars of claim that the instalment sale agreement was
concluded between the parties more than eight
years ago on 29
September 2005. The respondent agreed in terms of the agreement to
pay 59 monthly instalments of R3202,43 with
effect from 1 November
2005 with the final instalment to be paid on 27 September 2010.
3. The respondent
avers in the affidavit resisting summary judgment that he applied for
debt review on 11 July 2007 with a debt
counsellor, Octogen, in
Edenvale. Although not stated as such, I assume the application was
made in terms of
section 86(1)
of the
National Credit Act 34 of 2005
which provides that a consumer may apply to a debt counsellor in the
prescribed manner and form to have the consumer declared
over-indebted. Although there is no positive averment to that effect
in the opposing affidavit, it seems that Octogen determined
that the
respondent was indeed over-indebted.
Section 86(7)(c)
of the NCA
provides that where a debt counsellor concludes that the consumer is
over-indebted, the debt counsellor may issue a
proposal recommending
that the Magistrate’s Court make an order that one or more of
the consumer’s obligations be re-arranged
as contemplated in
that subsection. The NCA is silent on the process to be followed in
relation to obtaining the order envisaged
in
section 86(7)(c)
, but
it would seem that both the consumer and the debt counsellor have the
necessary locus standi to make such an application.
4. According to the
respondent, a declaration of his over-indebtedness and proposals for
future payments were sent by the debt counsellor
to all his
creditors during July and August 2007.
5. For reasons which
have not been explained, the application as envisaged in
section
86(7)(c)
of the NCA was only instituted in the Germiston Magistrate’s
Court during 2009 and the matter was set down for 2 September
2009.
The application was not proceeded with. The respondent’s
explanation for the failure to proceed with the application
is vague
and incomplete. He places the responsibility for the lapse on two
firms of attorneys, without explaining whether such
attorneys were
mandated by him or the debt counsellor to bring the application. He
states that “thereafter a matter was lodged”
in the
Randburg Magistrate’s Court and was set down on 27 May 2011. He
then avers that he is “not aware why the Randburg
matter did
not continue or why an order was never granted in that Court”.
He offers no explanation, and nor did he file any
supporting
affidavit, from the debt counsellor, accounting for the matter not
being processed to finality.
6. An application
was then made to the Polokwane Magistrate’s Court and set down
for 22 July 2013, that is six years after
the debt counsellor sent
his recommendations proposing a re-arrangement to the respondent’s
creditors. On 22 July 2013 the
matter was postponed. It was set down
again on 29 October 2013, on which date it was postponed to 3
December 2013, when it was
again postponed to an undisclosed date in
February 2014. Neither the respondent nor the debt counsellor has
furnished the court
with any satisfactory explanation for these
delays and postponements. The application to the Magistrate’s
Court in terms
of
section 86(7)(c)
of the NCA remains pending almost
7 years after the recommendation proposing re-arrangement was made by
the debt counsellor.
7.Annexure OP1 to
the opposing affidavit is a statement issued by the applicant
setting out the history of all entries made to
the respondent’s
account from 28 September 2005 until 27 August 2013. The current
balance on the account is reflected as
R155 930,08. The respondent’s
payment of the instalments over the period has been erratic. Before
the debt counsellor’s
recommendation he intermittently paid the
contractual monthly instalment, but on most occasions paid a lesser
amount or nothing.
From July 2007 until July 2013 he paid instalments
in the amount of between R1100 and R1800. It does not seem that he
paid an
instalment each and every month. He thus made irregular
payments of different amounts. He avers though that he “made
payment
of the proposed amount to the plaintiff in the amount of R1
292, 22 as regularly as possible and in various instances I paid more
than the proposed amount”.
8. On 2 July 2013
the applicant’s attorneys addressed a letter to the respondent
in which they said:
“2. Our client
was notified of your Application to be placed under Debt Review in
terms of the provisions of the National
Credit Act No 34 of 2005
(“the Act”), by your Debt Counsellor.
3. You are in
default with your obligations in terms of the abovementioned credit
agreement and more than 60(sixty) business days
have lapsed since you
applied for debt review. We hereby give you notice in terms of
section 86(10) of the Act, terminating the
debt review with immediate
effect.”
9 Section 86(10) of
the NCA provides that if a consumer is in default under a credit
agreement that is subject to debt review,
the credit provider may
give notice to terminate the review at any time at least 60 business
days after the date on which the
consumer applied for the debt
review. The NCA does not prohibit the termination of a debt review
by a credit provider while an
application for a re-arrangement order
is pending before the Magistrate’s Court. The credit provider
has an unequivocal statutory
right to terminate a debt review at any
time 60 business days after the application for debt review is made
to the debt counselor
in terms of section 86(1) of the NCA. The
remedy against any unjustifiable termination of the debt review by
the credit provider
lies with the court called upon to enforce the
agreement. Section 86(11) of the NCA provides that if a credit
provider who has
given notice to terminate a review as contemplated
in section 86(10) of the NCA proceeds to enforce the agreement, the
Court hearing
the matter may order that the debt review resume on any
conditions the court considers to be just in the circumstances.
10. In Changing
Tides 17 (Pty) Ltd v Grobler and another
[2012] 3 All SA 518
(GNP) at
para 19, commenting on the judgments in Collett v Firstrand Bank
2011
(4) SA 508
(SCA) and Mercedes Benz Financial Services South Africa
(Pty) Ltd v Dunga
2011 (1) SA 374
(WC), I observed:
“It is thus
clear that the SCA considered that the enforcement of a credit
agreement should not be postponed indefinitely
simply once steps have
been taken to seek a re-arrangement order. The purpose and objects of
the Act will best be served by allowing
the consumer a 60 day period
of grace during which alternative means of resolving the dispute may
be attempted and thereafter for
the enforcing court (being either the
Magistrate’s Court or the High Court) to exercise the
discretion to resume the debt
review on the basis of more complete
evidence regarding the earlier debt review process. The enforcing
court is required to decide
whether there would be any benefit or
meaningful prospect of a better outcome in the event of the debt
review resuming. In this
regard the court will take into
consideration the history of the dispute, the good faith
participation of both parties in any prior
negotiations designed to
result in responsible debt re-arrangement, and the prospect of any
satisfactory re-arrangement and compliance
with it. An approach along
these lines, the SCA held, would strike a fairer balance between the
interests of consumers and those
of credit providers and would give
effect to the intention of the legislature as expressed in the
language of sections 86(10) and
86(11) of the Act.”
11.The respondent
contends that the termination of the debt review is unreasonable. He
submitted that the proposed repayment plan
is reasonable and will
lead to the satisfaction of all his financial obligations in terms
of the credit agreement within a reasonable
period. He stated
further that should summary judgment be granted, and he be ordered
to return the vehicle, he would be prejudiced
in that he required
transport for the purpose of his employment. He explained that his
over-indebtedness arose from his requiring
brain surgery in 2007 and
the costs associated with that. He also indicated that he had laid a
complaint with the National Credit
Regulator regarding the conduct of
the debt counsellor. And finally he tendered henceforth to pay an
amount of R3500 per month
to the applicant to extinguish his debt. He
accordingly requested the court to order that the terminated debt
review resume on
the condition that he pay the applicant R3500 per
month.
12.The applicant
opposes the grant of an order resuming the debt review. It points out
that if the respondent is now able to pay
R3500 he is able to acquire
another vehicle and thus his employment is not in jeopardy.
13.I am satisfied
that the applicant lawfully terminated the debt review in terms of
section 86(10) of the NCA. I am also not persuaded
that it will be
just to order the
debt review to resume. The principal debt in this instance should
have been fully repaid by 27 September 2010,
more than 3 years ago.
The arrears now outstanding, R155 930,08, are more than the original
principal debt of R121 929,82. This
is a clear indication that in a
debt period of almost 9 years the respondent has been unable to
service his debt and fulfill his
obligations to the applicant.
Moreover, the respondent has failed to disclose his present financial
situation and has furnished
no supporting evidence that he is in a
position to pay R3500 per month. On the evidence before me there is
no meaningful prospect
of a better outcome in the event of the debt
review resuming, especially when such prospects are assessed in the
light of what
has gone before. While it may be that the debt
counsellor should have been more proactive, there was equally a duty
on the respondent
to drive the process to obtain a re-arrangement
order. His supine attitude in this regard does not inspire confidence
that he will
take steps to extinguish his debt. I am accordingly not
prepared to make an order in terms of section 86(11) of the NCA that
the
terminated debt review be resumed.
14.I am left then
with the application for summary judgment. The only defence raised by
the respondent, beyond his plea for the
terminated debt review to be
resumed, is a point in limine that the deponent to the affidavit in
support of summary judgment is
not a person who can swear positively
to the facts verifying the cause of action or able to state that
there is no bona fide defence
to the action, as required in terms of
rule 32(2).
15.The deponent, Ms
Zenobia Harmen, is the Manager, Legal of the Standard Bank of South
Africa Limited, Vehicle and Asset Finance
Division, Johannesburg (the
applicant). She states in the affidavit that through her position she
has access to all records and
information in the possession of the
applicant pertaining to this matter. She avers further that she has
perused the records in
her possession and acquainted herself with
the contents thereof and is able to state that the respondent is
indebted to the applicant
on the grounds stated in the summons and
particulars of claim and that the respondent has no bona fide defence
and has delivered
the notice of intention to defend solely for the
purpose of delay.
16.The respondent
contends that the deponent’s averments are insufficient basis
for her conclusion that he is indebted and
lacks a bona fide
defence.However, her averments are in fact corroborated by Annexure
OP1 to the respondent’s affidavit
and the fact that he raises
no defence. The content of the opposing affidavit make the in limine
attack pointless. A challenge
to the deponent’s personal
knowledge of the facts is irrelevant if no bona fide defence is
discernible or where there is
no averment that the amount claimed is
wrong or that the claim is false - Herbstein and van Winsen:
The Civil Practice
of the High Courts of South Africa (5th Ed) 525; and Cape Town
Transitional Metropolitan Substructure v Ilco
Homes
1996 (3) SA 492
(C). Moreover, as a legal advisor with access to the respondent’s
statement of account within the undisputed records of the
applicant,
the deponent is probably in as good a position as anyone else to
swear to the facts - Nedcor Bank Ltd v Behardien
2000 (1) SA 307
(C)
at 311C-D. I do not share the opinion sometimes put forward in these
kind of cases that a deponent’s personal knowledge
must extend
to an involvement in negotiations and discussions with the consumer.
The fact deposed to is that the records of the
applicant, in other
words the relevant bank account, reflecting all debits and credits,
reveals a particular indebtedness giving
rise to a right of action.
Where that indebtedness is common cause it would be pedantry to
insist on further evidence from persons
who had direct dealings
with the respondent. It appears from the nature of the evidence that
the facts are within the knowledge
of the deponent and that she was
able to positively swear to them. The point in limine must
accordingly be dismissed.
17. The respondent
raises no other bona fide defence to the application and accordingly
the applicant is entitled to summary judgment.
18.In the premises
an order is granted in terms of prayers 1-4 of the application for
summary judgment dated 9 September 2013.
JR MURPHY
JUDGE OF THE HIGH
COURT
Date Heard: 24
January 2014
For the
Applicant: Adv E Botha
Instructed
By: Newtons Attorneys
For the
Respondent: Adv GVR Fouché
Instructed
By: JF van Zyl & Associates