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[2012] ZAFSHC 13
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Firstrand Bank Ltd v Britz and Another (5243/2011) [2012] ZAFSHC 13 (9 February 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 5243/2011
In the matter between:-
FIRSTRAND BANK
LIMITED
….................................................
Plaintiff
and
GERHARDUS PETRUS
BRITZ
….....................................
1
st
Defendant
STEPHANIE DANELIA
BRITZ
….....................................
2
nd
Defendant
_____________________________________________________
HEARD ON:
2
FEBRUARY 2012
_____________________________________________________
JUDGMENT BY:
PHALATSI, AJ
_____________________________________________________
DELIVERED ON:
9 FEBRUARY 2012
_____________________________________________________
[1]
This
is an application for summary judgment. The plaintiff’s cause
of action is based on a Home Loan Agreement entered into
between the
parties on 11 July 2007.
[2] The plaintiff avers
in the particulars of claim that the defendants failed and/or
neglected to maintain the instalments and,
consequently, the full
outstanding amount has become due and payable, in terms of the
agreement.
[3] On 3 May 2010, Adri
Kleinhans, debt counsellor, sent the notification to all the
defendants’ credit providers in terms
of
Section 86(4)(b)
of
the
National Credit Act, 34 of 2005
, advising them that the
defendants have applied for debt review.
[4] On 5 August 2010, the
plaintiff sent a notice in terms of
Section 86(10)
of Act 34 of 2005,
terminating the review with immediate effect.
[5] The defendants,
however, proceeded with the application and a rearrangement order was
granted by the Hennenman magistrate’s
court on 12 August 2010.
[6] In terms of the said
order, the defendants were ordered to pay the monthly instalments of
R11 453-20, for distribution to the
defendants’ credit
providers.
[7] The plaintiff avers
that the defendants defaulted on the rearrangement order and the
plaintiff is therefore entitled to proceed
to enforce the credit
agreement without further notice to the defendants, in terms of
Section 88(3)
of the
National Credit Act.
[8
] The defendants filed
the opposing affidavit, detailing the reasons for their financial
problems which prompted them to apply for
debt counselling.
[9] They further state
that they are now both employed and they collectively earn an amount
of about R32 000-00 per month, which
enables them to comply with the
rearrangement order.
[10]
They, however, concede that during August 2011, they made a payment
of R8 000-00, instead of R11 000-00 as set out in the rearrangement
order and asked African bank, the agent, to distribute that amount
pro rata,
among
the creditors.
[11] They later tried to
enquire from the plaintiff as to what amount was in arrears, to no
avail.
[12] In an attempt to
rectify the situation, over and above the monthly payments made in
terms of the rearrangement order, they
made two extra payments
directly to the plaintiff, totalling R1 700-00.
[13] The plaintiff does
not provide any details in the particulars of claim as to when did
the defendants default and what the amount
of the arrears is, but
only avers that the whole outstanding amount has become due and
payable because of the default.
[14] In the absence of
such details, I am bound to accept the averments of the defendants in
this regard.
[15] Mr. Groenewald, who
appeared for the plaintiff, argued that since the defendants have
conceded that they defaulted by short
payment in August 2011, the
fact that they later paid in an extra amount to try and remedy the
default is of no consequence, and
that summary judgment should
therefore be granted against the defendants.
[16] He further argued
that the defendants, on their own version, conceded that the payments
were not always done on or before the
end of the month, as it should
be done in terms of the rearrangement order.
[17] He also referred me
to the unreported case of
FIRST BANK LIMITED v GROBLER
(Case Number 6446/2010 SA (O), where Musi JP held that, where a
consumer has defaulted on his obligation under an order of
rearrangement,
neither a
Section 129(1)
notice nor a
Section 86(10)
notice is required before a credit provider can issue summons.
[18] He further referred
to the case of
FIRSTRAND BANK v FILLIS
2010 (6) SA 565
(ECP) 569, where it was held that if a consumer is unable to comply
with his or her restructured debt commitment, the Act permits
the
common law to run its course.
[19] Mr. Heymans, who
appeared on behalf of the defendants, contended that the Section 86
(10) notice, which was sent by the plaintiff
to the defendants, was
premature, in that the words “being reviewed”, in the
subsection, refers to a review which was
granted by a court, in terms
of Section 86. I do not agree with this contention, as the subsection
clearly states that the notice
may be sent “at any time at
least 60 days after the date on which the consumer
applied
for
debt review. (my own emphasis). This was also confirmed in the as yet
unreported case of
COLLETT v FIRSTRAND BANK
(766/2010)
[2011] ZASCA 78
(27 May 2011).
[20] Mr. Groenewald also
argued, correctly in my view, that the Section 86(10) notice which
was sent to the defendants is of no
force and effect in that the
rearrangement order, which included the plaintiff, was finally
granted by the court. I will therefore
not refer to this notice any
further.
[21] The only issue that
remains to be considered is whether, on the facts as set out above,
summary judgment should be granted
against the defendants.
[22] The problem that I
have with this matter is three fold:
firstly, whether the
default relied upon by the plaintiff, as explained by the
defendants, is of such a nature that the defendants
should not be
given an opportunity to continue with the fulfilment of their
obligations, as they are still doing;
secondly, whether the
defendants are still in arrears, given the scarcity of the details
provided by the plaintiff on this aspect,
and the payments made by
the defendants to rectify those arrears that may have arisen out of
the short payment made in August
2011;
thirdly, whether the
defendants are
unable
to comply with their
restructured debt commitment, as held in the
FILLIS
-case,
supra.
(my own emphasis).
[23] Mr. Groenewald
argued that although it might be unfair to the defendants to grant
summary judgment against them under these
circumstances, the law
entitles the plaintiff to summary judgment.
[24] The preamble to the
National Credit Act states
that the Act is there
“
to promote a
fair marketplace for access to consumer credit…”
and Section 3 of the Act
states some of the purposes of the Act as to promote a fair and
transparent credit market and industry,
and to protect consumers.
[25] It is common cause
that this matter falls within the purview of this Act and should be
decided pursuant to the purpose and
import thereof.
[26] In the light of the
above, I come to the following conclusions:
that on the facts
before me, I cannot find that the defendants are still in arrears;
that the defendants
have demonstrated both their willingness and ability to comply with
their restructured debt commitment;
and
that, in the
circumstances, summary judgment cannot be granted against them.
[27] In the light of my
conclusions, the further matter which was argued, being whether the
property should be declared specially
executable, falls away.
[28] I accordingly
dismiss the application for summary judgment, grant leave to
defendants to defend the matter and that costs will
be costs in the
main case.
_________________
N.W. PHALATSI, AJ
On
behalf of plaintiff: Adv. W.J. Groenewald
Instructed
by:
Symington
& De Kok
BLOEMFONTEIN
On
behalf of defendants: Adv. P.J. Heymans
Instructed
by:
E
G Cooper Majiedt Inc
BLOEMFONTEIN
/sp