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[2013] ZAFSHC 83
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Mostert and Another v Standard Bank of South Africa Ltd and Another (1368/2011) [2013] ZAFSHC 83 (30 May 2013)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 1368/2011
In
the matter between:
IZAK MOSTERT
................................................................
First
Applicant
KLARA
ERIKA MOSTERT
..........................................
Second
Applicant
versus
THE
STANDARD BANK OF SOUTH AFRICA
LIMITED
........................................................................
First
Respondent
ALEXANDER FOWLY
HEWETSON
.......................
Second
Respondent
_____________________________________________________
HEARD ON:
16 MAY 2013
_____________________________________________________
JUDGMENT BY:
LEKALE, J
DELIVERED ON:
30 MAY 2013
_____________________________________________________
INTRODUCTION AND
BACKGROUND:
[1] On or about 3 October
2000, 3 October 2005 and 18 December 2006 the applicants, a couple
married in community of property, and
the first respondent concluded
credit agreements in terms of which the former passed first, second
and third mortgage bonds over
their immovable property in favour of
the latter as security for loan amounts advanced.
[2] On 14 February 2011
the first applicant was declared over- indebted by the Welkom
Magistrates’ Court and a debt re-arrangement
order was issued
which included the loan agreements with the first respondent. The
said order, further, directed that the relevant
debt review in
respect of the first applicant resumes insofar as it may have been
terminated by any of the respondents, inclusive
of the first
respondent. In terms of the order in question the first applicant was
directed to pay R9 089.35 per month for the
benefit of all the listed
credit providers, inclusive of R557,57 per month in favour of the
first respondent.
[3] On 23 March 2011 the
first respondent issued summons out of this Court against the
applicants on the basis of the mortgage bonds
and eventually took
judgment in default of appearance to defend against them on 23 May
2011. On 15 September 2011 the mortgaged
property wasdeclared
executable by this Court and, on 27 September 2011, a warrant of
execution was issued against the same. The
relevant property was,
eventually, sold to the second respondent by way of public auction.
[4] The applicants feel
aggrieved by the default judgment and the sale of the property in
execution of the same and now move for
an order:
“
1.
Rescinding the default judgment granted by this Honourable Court on
23
rd
May
2011 under case number 1368/2011;
2. Rescinding the order granted by
this Honourable Court on 15
th
September 2011
under case number 1368/2011 in terms of which order the immovable
property known as Erf 3347 Welkom, held by Deed
of Title T38217/2000
was declared specially executable;
3. Rescinding the warrant of
attachment and execution granted by this Honourable Court on 27
th
September 2011 under case number 1368/2011 in terms of which
warrant the property known as Erf 3347 Welkom, held by Deed of Title
T38217/2000 was declared specially executable.
4. Cancelling the Deed of Sale in
terms of which the property known as Erf 3347 Welkom, held by Deed of
Title T38217/2000 was sold
by way of public auction;
5. Costs of the application be paid
by the respondent.
”
[5] The first respondent
opposes the motion on,
inter alia
, the ground that the
applicants have no
bona fide
defence against its action
insofar as it terminated the first applicant’s debt review in
terms of section 86(10) of National
Credit Act, 34 of 2005 (the NCA),
per notices dated 28 September 2010 which were sent to both
applicants per registered mail as
well as to the debt counsellor and
the National Credit Regulator. The second respondent was joined in
the application simply because
he has direct and substantial interest
in the prayer for cancellation of the Deed of Sale. No papers have
been filed in respect
of the second respondent. At the commencement
of the proceedings the first respondent secured leave to file
supplementary opposing
affidavit and was ordered to pay the costs
occasioned thereby.
ISSUE IN DISPUTE
[7] At the commencement
of the proceedings the parties announced that the dispute between
them is confined to the question as to
whether or not the applicants
have a
bona fide
defence with some prospects of success
against the first respondent’s claim.
CONTENTIONS FOR THE
APPLICANTS
[8] Mr Pienaar submits,
on behalf of the applicants, that the latter never received any
notice of termination of debt review at
any time prior to 14 February
2011 and that, if such a notice was sent, the first respondent has
failed to allege and prove that
same was sent to and received by the
post office servicing the applicants insofar as proof of despatch is
not sufficient for the
purposes of a notice sent in terms of section
129 of the NCA and, by analogy, in terms of section 86(10) of NCA,
That, even if
the debt review process was terminated, same resumed
when it was revived by the court order of 14 February 2011. At all
times material
to the summons the applicants complied with the debt
re-arrangement order insofar as the first applicant paid R9 089,35
per month
as ordered by the Court to the relevant payment
distribution agent (PDA).
CONTENTIONS FOR THE
FIRST RESPONDENT
[9] Mr Zietsman submits
to the effect that the first applicant’s debt review was
properly terminated in terms of section 86(10)
of NCA during
September 2010 per notices despatched on 28 September 2010. That if
it is found that the debt review in question
was never terminated or
that, if it was terminated, it was revived by the debt re-arrangement
order of 14 February 2011, then and
only in that event, the first
respondent was entitled to enforce its rights against the applicants
through legal process in terms
of section 88(3) of NCA, because the
applicants defaulted under both the credited agreement and the debt
re-arrangement order insofar
as only R541.40 was paid over to the
first respondent for the months of February 2011 and March 2011
instead of R557.57 as ordered
by the Court.
APPLICABLE LEGAL
PRINCIPLES
[10] One of the essential
elements of “sufficient cause” for rescission is
existence of a
bona fide
defence which
prima facie
carries some prospects of success. It suffices, for the purposes of
rescission, if the applicant makes out a
prima facie
defence
by setting out averments which, if established at the trial, would
serve as a defence to the claim. (See
Chetty v Law Society,
Transvaal
1985 (2) SA 756
(A) at 765 B – C and
Grant
v Plumbers (Pty) Ltd
1949 (2) SA 470
(O).)
[11] In order to prove
adequately that a notice in terms of section 129 of NCA has been
delivered as required by section 130 of
NCA, the credit provider must
allege that the relevant notice was delivered to the relevant post
office and that the post office
in question would, in the normal
course, have secured delivery of a registered item notification slip,
informing the consumer that
a registered article was available for
collection. (See
Sebola and Another v Standard Bank of South
Africa Ltd and Another
2012 (8) BCLR 785
(CC) at par [77].)
[12] As Mr Zietsman
correctly points out, only the court which is seized with the
enforcement of the credit agreement relating to
the credit provider,
who has terminated a debt review in terms of section 86(10) of NCA,
has the power to revive such debt review
in terms of section 86(11)
of the NCA. (See
Collett v Firstrand Bank Ltd
2011 (4)
SA 508
(SCA).)
[13] A credit provider is
entitled to enforce its legal rights against the consumer by way of
litigation where the latter is in
default under the credit agreement
as well as in terms of the debt re-arrangement order. (See section
88(3) of NCA.)
APPLICATION OF
LEGAL PRINCIPLES AND FINDINGS
[14] The parties are,
effectively, in agreement that, if the consumer complies with a debt
re-arrangement order, the credit provider
is not entitled to enforce
its rights in terms of the credit agreement. The dispute in this
regard is limited to the question whether
or not the debt review of
the first applicant was terminated in the sense that summons
contained sufficient allegations leading
to the conclusion that
termination notices were delivered to the applicants. If so, they are
in dispute over whether or not such
debt review was, in law, revived
by an order of 14 February 2011. In the event of the aforegoing
question being decided in the
affirmative, they are at variance on
whether or not the applicants were in default in terms of the debt
re-arrangement order, insofar
as it relates to the first respondent,
as at the date of summons.
[15] I am, however, not
satisfied that the determination of the question as to whether or not
the debt review in question was terminated
is of any consequence in
the instant application in the light of the fact that the court
order, which purports to revive such debt
review, has not been set
aside. Its
prima facie
effect, in my view, reflects on the
bona fides
of the applicants’ defence and its
prima
facie
prospects of success. The question as to whether or not the
first applicant was in default in respect of the debt re-arrangement
order, as at the date on which the proceedings that gave cause to the
impugned judgment were commenced, falls to be determined,
with
certainty, by the trial court. For the purposes of this court,
sitting as it is, the question is whether or not the applicants’
defence that the first applicant was not in default in terms of the
court order at the relevant time, when summons was issued,
is
bona
fide
and carries some prospects of success. In my judgment that
question stands to be answered in the affirmative regard being had to
the fact that, it is not in dispute that, the first applicant was
ordered to pay a global amount of R9 089.35 per month and
that
he was in compliance with that part of the debt re-arrangement order
as at the date of summons.
COSTS
[17] The parties are,
further, in dispute over the question of costs with the applicants
contending that costs should follow the
event in line with applicable
principles while the first respondent, on its part, submits
thatapplicants should, in any event,
be saddled with costs, inclusive
of reserved costs, because they seek an indulgence.
[18] Having regard to the
reason furnished by the applicants for the default, which explanation
has, correctly and effectively,
been conceded as sufficient and
acceptable by the first respondent, I am of the view that it is only
fair to allow costs herein
to be costs in the cause. In this regard
it should be noted that the applicants attribute the default to
efforts, on the part of
the debt counsellor, to resolve the matter
with the first respondent extra-judicially by drawing the latter’s
attention to
the debt re-arrangement order and payments already made
in its favour.
ORDER
[19] An order is,
therefore, granted in terms of prayers 1, 2, 3 and 4 in the notice of
motion.
[20] Applicants are
granted leave to defend the matter by entering appearance to defend
the action within 10 (ten) days of the date
of this judgment and
generally in terms of applicable rules of court.
[21] Costs of the
rescission application, inclusive of reserved costs, are costs in the
cause.
______________
L.J. LEKALE, J
On behalf of applicants:
Adv C.D. Pienaar
Instructed by:
Wessel & Smith
Attorneys
BLOEMFONTEIN
On behalf of respondents:
Adv P Zietsman SC
Instructed by:
Matsepes Inc.
BLOEMFONTEIN
/spieterse