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[2013] ZAKZDHC 5
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Firstrand Bank Ltd t/a Wesbank v Jili (5200/2012) [2013] ZAKZDHC 5 (25 February 2013)
9
IN
THE KWAZULU-NATAL HIGH COURT, DURBAN
REPUBLIC
OF SOUTH AFRICA
CASE NO:
5200/2012
In
the matter between:
FIRSTRAND
BANK LIMITED trading as WESBANK
.............
APPLICANT
and
HELEN
NOKUBONGA JILI
.............................................
RESPONDENT
JUDGMENT
(delivered on 25
February 2013)
KRUGER
J:
[1] The Plaintiff seeks
summary judgment against the Defendant for an order directing the
Defendant to return a motor vehicle, viz,
a 2007 Volkswagen Jetta 1.6
Trendline (“the vehicle”), to the Plaintiff. In the event
of the Defendant failing to do
so, the Plaintiff seeks an order
authorising the Sheriff to attach the said vehicle and to hand over
same to the Plaintiff. Ancilliary
relief sought by the Plaintiff is
that the Plaintiff’s claim for whatever damages it may have
suffered as a consequence of
the Defendant’s breach of the
agreement, be postponed sine die, pending the return of the vehicle
to the Plaintiff, the subsequent
valuation and sale thereof and the
calculation of the amounts to which the Plaintiff is entitled in
terms of the agreement.
[2] The facts of the
matter are common cause and are briefly as follows:
[3] On 28
th
November 2007 the Plaintiff concluded a written instalment sale
agreement (“the agreement”) in respect of the vehicle
with the Defendant. The agreed selling price was R176 460,00.
The agreement provided for the payment of a deposit of R30 000,00;
sixty instalments of R3 157,05 per month and a final instalment of
R59 465,00.
[4] The Defendant
experienced financial difficulties and during 2011 applied for debt
review in terms of Section 86 of the National
Credit Act, 34 of 2005
(“the Act”). On 4
th
November 2011 the
Defendant was ordered, in terms of a Magistrate’s Court Order,
to pay to the Plaintiff a restructured instalment
of R1 714,44
per month.
[5] The Defendant
failed to pay the restructed instalments timeously and regularly and
as at 15
th
May 2012 was in default in the sum of
R3 428,86. On the 22
nd
May 2012, by virtue of the
Defendant’s breach, the Plaintiff cancelled the contract and
issued a summons claiming the relief
as hereinbefore stated. The
Plaintiff averred that it was entitled, by virtue of the provisions
of Section 88(3) of the Act, to
enforce by litigation its rights or
security under the agreement. On the 13
th
July 2012 the
Defendant paid the sum of R3 428,86 to the Plaintiff in an
attempt to make good the arrears.
[6] The Defendant
entered an appearance to defend and the Plaintiff launched this
application for summary judgment. In opposing
the opposing the
application for summary judgment, the Defendant raised three defences
– firstly that her debts have been
rearranged in terms of a
debt rearrangement order of court and accordingly the Plaintiff is
precluded from proceeding against her
without first having rescinded
or varied the existing court order; secondly, that the Plaintiff has
failed to negotiate in good
faith with her and thirdly, in the
alternative, that given the circumstances of this case, the Court
should order that the debt
review should resume in terms of Section
86(11) of the Act.
[7] Mr Blomkamp, who
appeared for the Defendant, did not pursue the latter two “defences”.
They were, in any event,
without merit and doomed to fail.
[8] Section 88(3) of
the Act provides:
“
(3)
subject to Section 86(9) and (10), a credit provider who receives
notice of court proceedings contemplated in Section 83 or
85, or
notice in terms of Section 86(4)(b)(i), may not exercise or enforce
by litigation or other judicial process any right or
security under
that credit agreement until –
(a) The consumer is in
default under the credit agreement; and
(b) One of the
following has occurred:
(i) An event
contemplated in sub-section (1)(a) through (c); or
(ii) The consumer
defaults on any obligation in terms of a re-arrangement agreed
between the consumer and credit providers, or ordered
by a court or
the Tribunal.”
[9] Mr Gounden, who
appeared for the Plaintiff, submitted that once the Defendant was in
default of the debt re-arrangement court
order, the Plaintiff was
entitled to proceed with the issue of a summons to enforce the
agreement without further notice to the
Defendant. In this regard he
relied on the decision of Eksteen J in
FirstRand Bank Ltd v
Fillis and another
, 2010(6) SA 565 (ECP)
. At
paragraphs 14 and 16, he held:
“
The
Act provides very extensive protection to a consumer who has become
over-indebted, whether it be of his or her own making or
through some
circumstances beyond his or her control. Not only does a
rearrangement afford him or her alleviation from the onerous
monthly
obligations that he or she has in all seriousness undertaken to his
or her credit providers, but he or she also enjoys
the protection of
Section 103(5) against the ravaging effect of escalating interest
whilst he or she remains in default under the
credit arrangement. If,
however, he or she fails to embrace this opportunity, or he or she
is, notwithstanding this very considerable
assistance, unable to
comply with his or her restructured debt commitment, the Act permits
the common law to run its course.
……
..…
It follows, in my view,
as a matter of interpretation, that once the jurisdictional
requirement set out in Section 88(3)(a) co-exists
with anyone of the
jurisdictional requirements set out in Section 88(3)(b),the credit
provider is at liberty to exercise and enforce,
by litigation or
other judicial process, any right or security under his credit
agreement, without further notice.”
See also;
FirstRand
Bank Ltd, formerly known as First National Bank of Southern Africa
Ltd v Fester and another
(14597/2011)[2011] ZAWCHC363
;
FirstRand Bank Ltd v Pieter Grobelaar
2011 JDR0227
(FB)
;
FirstRand Bank Ltd v Mdila
2012 JDR0729
(ECG)
;
Standard Bank of South Africa Bpk v Helene Du
Randt
(2985/2012)[2012] ZAFSHC219
.
[10] Mr Blomkamp’s
submission is that the Plaintiff is precluded from enforcing the
credit agreement unless and until the
court rearrangement order has
been rescinded, irrespective of the fact that the Defendant is in
breach of the provisions of the
debt rearrangement order. The
submission is based on a judgment of Lopes J in
Reid v Standard
Bank of South Africa Ltd
[2011] ZAKZPHC34
. At
paragraph 9, he held:
“…
The
provisions of sub-section 86(2) do not necessarily render a decision
by a Magistrate pursuant to a debt review application void.
It may
well be that a debt counsellor is precluded from bringing such an
application after the credit provider has taken steps
in terms of
Section 129, but there is nothing in the act to indicate that once
having done so, it is visited with a nullity. In
my view it was
incumbent upon the Respondent to have applied to set aside the
Magistrate’s Court orders rather than seeking
simply to ignore
them. Once a Court Order is granted, it is valid and enforceable
until and unless set aside. As pointed out by
counsel for the
appellants, any assumption of invalidity would possibly affect the
other parties to the order.”
[11] The facts in the
Reid
case however are clearly distinguishable from
those
in casu
. In the
Reid
case the debt
counsellor irregularly sought and obtained a debt rearrangement order
from the Magistrate’s Court after the
credit provider had
issued and served summons on the consumer. The Court held that this
irregularity did not render the Magistrate’s
Court order null
and void thereby entitling the credit provider to obtain summary
judgment in the High Court. The Learned Judge
was of the opinion that
in these circumstances, the Magistrate’s Court order had to be
set aside on the basis of the irregularity,
before the credit
provider would be entitled to judgment.
[12]
In casu
,
and as already outlined earlier in this judgment, the Defendant
defaulted and was in breach of the court rearrangement order.
There
is no allegation of the said order having been sought and obtained
irregularly. I am therefore of the opinion that the Plaintiff
was
entitled to proceed with the issue of summons to enforce its rights
under the agreement.
[13] Finally, Mr
Blomkamp has submitted that summary judgment ought to be refused as
the Defendant made good the arrears in terms
of the debt
rearrangement order. In this regard he relied on the judgment of
Phalatsi AJ in the case of
FirstRand Bank Ltd v G Britz and
another
(5243/2011) ZAFHC13
. The Court refused to
grant summary judgment on the basis that:
At the time of the
hearing, the Defendants had made good the shortfall and were no
longer in arrears and
The Defendants had
expressed and demonstrated a willingness and ability to comply with
the restructured debt commitment.
[14] The facts in the
Britz
case are similar to those
in casu
. The
Defendants defaulted and were in breach of the court rearrangement
order. The Plaintiff then proceeded, in terms of the provisions
of
Section 88(3), to enforce the agreement. After the issue and service
of the summons the Defendants made good the arrears in
terms of the
debt rearrangement order. I do not agree with the conclusions arrived
at the
Britz
case. In terms of the provisions of
Section 88(3) and the authorities cited earlier in this judgment,
once “the jurisdictional
requirement set out in Section
88(3)(a) co-exist with anyone of the jurisdictional requirements set
out in Section 88(3)(b)”(per
Eksteen J –
Fillis
–
supra
) the court re-arrangement order (in respect of that
particular credit provider) automatically terminates. The Act does
not provide
for an automatic reinstatement of the debt rearrangement
order once the consumer has made good the arrears. See also
FirstRand
Bank v Fester
-
supra
.
[15] In the
circumstances the Defendant has failed to show that she has a bona
fide defence to the Plaintiff’s claim.
[16] I accordingly make
the following order:
The Defendant is
ordered forthwith to return to the Plaintiff the motor vehicle
described as 2007 Volkswagen Jetta 1.6 Trendline,
with chassis
number AAVZZZ1KZ7U009263 and engine number BSF030836, failing which
the Sheriff is authorised to attach the vehicle
wherever he may find
same and to hand it to the Plaintiff.
That judgment for the
amount of damages that the Plaintiff may have suffered, together
with interest thereon be postponed sine
die, pending the return of
the vehicle to the Plaintiff, the subsequent valuation and sale
thereof and the calculation of the
amount to which the Plaintiff is
entitled.
The Defendant is
ordered to pay the Plaintiff’s costs incurred in respect of
the application and the action to date hereof.
DATE OF CAV: 12
February 2013
DATE OF JUDGMENT: 25
February 2013
FOR THE PLAINTIFF: K
GOUNDEN
INSTRUCTED BY: LEGATOR
McKENNA INC.
FOR THE DEFENDANT: P J
BLOMKAMP
INSTRUCTED BY: W H A
COMPTON ATTORNEYS