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[2012] ZAKZPHC 19
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SA Taxi Securitisation (Pty) Ltd v Phambuka (8821/11) [2012] ZAKZPHC 19 (30 March 2012)
REPORTABLE
IN THE KWAZULU-NATAL HIGH
COURT
PIETERMARITZBURG
REPUBLIC OF SOUTH AFRICA
CASE
NO.8821/11
In
the matter between
SA
TAXI SECURITISATION (PTY) LIMITED
….....................................
Plaintiff
and
L.B.
PHAMBUKA
(ID
NO.)
…...............................................................................................................
Defendant
JUDGMENT
Delivered: 30 March 2012
WANLESS, AJ.
Introduction
[1] This is an application for
summary judgment by the Plaintiff against the Defendant. The
Plaintiff is a registered credit provider
and duly registered as
such as defined in section 40 of the National Credit Act 34 of 2005
(hereafter referred to as "the
Act"), The Plaintiff and
one Lindelani Blessing Phambuka (hereafter referred lo as ''the
Defendant") entered into a
written agreement which, it is
common cause, is a credit agreement in terms of section 8 of the
Act.
[2] The Plaintiff has
instituted an action against the Defendant wherein the Plaintiff
relies on a breach by the Defendant of
the aforesaid agreement and
claims the following relief, namely: "
1.
Confirmation of termination of the agreement:
2. Return of the 2010 CMC
AMANDLA with engine number E3447G and chassis number
LA61BAS31AB5G6153 to the Plaintiff forthwith;
4.
Expenses
incurred for removal, valuation storage and sale of the vehicle;
5.
Attorney
and client costs to be taxed;
6. Further and'or alternative
relief."
[3] The action has been
defended by the Defendant and the Plaintiff has instituted this
application for summary judgment wherein
the Plaintiff claimed the
same relief as sought by it in the action. However, at the hearing
of this application I was advised
by Mr Moodley, who appears for the
Plaintiff, that the Plaintiff would only be seeking the relief for
confirmation of the termination
of the agreement; the return of the
motor vehicle which is the subject matter of the agreement entered
into between the parties,
together with attorney and client costs to
be taxed
H
Arising therefrom the Plaintiff
essentially seeks summary judgment in terms of Rule 32 (l)(c) for
the return of the motor vehicle
to the Plaintiff and that in terms
of Rule 32(6)(b) the Defendant be given leave to defend the claim
for damages which is the
remainder of the relief sought by the
Plaintiff in the action.
The Salient Facts
[4] Arising from the Plaintiffs
Particulars of Claim in the action together with the Defendant's
affidavit in terms of rule 32(3J(b)
the following facts are either
common cause or cannot be disputed, namely:
(a) On the 12
r]l
of October 2010 the Plaintiff
and the Defendant entered into the agreement;
(b) The Defendant has breached
the agreement in that the Defendant has fallen into arrears in
respect of his payments in terms
of the agreement;
(c) On the 5
th
of March 2011 the Plaintiff
sent by registered post a letter to the Defendant which complied
with the provisions of section 129(l)(a)
of the Act and which
advised the Defendant that he could refer the matter to a debt
counsellor to resolve any dispute or to develop
a plan that would
be acceptable to both the
Plaintiff and the Defendant in order to bring the Defendant's
payments up to date;
(d) The Defendant referred the
matter to a debt counsellor;
(e) In terms of section S6(4)
of the Act the debt counsellor notified all the credit providers to
whom the Defendant was indebted
that the Defendant had applied for a
debt review. This was done by the debt counsellor on the 28
,h
of July 2011;
(f) On the 11
th
of August 2011 the debt
counsellor, having found the Defendant to be over-indebted, launched
an application on behalf of the Defendant
in the Magistrates* Court
(Pinetown) for an order declaring the Defendant to be over-indebted
and re-arranging the credit agreement
obligations of the Defendant
(including the Defendant's obligations to the Plaintiff);
(g)
By
way of a letter dated 12 August 2011 which was sent by
registered
post on the 15
lh
of August 2011 the Plaintiff
advised the debt counsellor, inter alia, that "the Consumer's
application for debt review is
declined";
(h)
No
notice as prescribed in terms of section 86(l0)(a); (b) or (c) of
the Act
was given by the Plaintiff to terminate the Defendant's
application for
debt review;
(i)
On
the 31
st
of August 2011 notice of
the Defendant's application to the
Magistrates' Court, Pinetown,
was served on the Plaintiff;
(j) The Plaintiff did not serve
or file any notice of opposition in respect of the aforesaid
application and did not file any
affidavits in opposition thereto;
(k) On the 28
111
of September 2011 the
Magistrates' Court (Pinetown) granted an order in terms of which the
Defendant was declared to be over-indebted
and in terms of the
provisions of section 86(7)(c) of the Act the Defendant's credit
agreement obligations (including the Defendant's
obligations to the
Plaintiff) were re-arranged by extending the period of each
agreement and reducing the amount of the monthly
payments required.
Apart from the Defendant's obligations to the Plaintiff as aforesaid
the Defendant's obligations to "Standard
Bank" were also
subject to the provisions of the said order; (1) On the ll"
1
of October 2011 the Plaintiff
served the Plaintiffs Combined Summons upon the Defendant, The
Plaintiff purported to cancel the
agreement by, inter alia, service
of its Combined Summons.
The
Issues
[5] In his opposing affidavit
to summary judgment the Defendant set out two grounds upon which the
Defendant averred 1 should
refuse summary judgment.
[6] In the first instance the
Defendant relies upon the fact that there is a valid and binding
court order being the order being
the order of the Magistrates'
Court (Pinetown) granted on the 28
,h
of September 2011 which remains
in existence and is binding upon both the Plaintiff and the
Defendant. It is the Defendant's contention
that until the Plaintiff
takes the necessary steps to set this order aside the order
restructuring the Defendant's indebtedness
to the Plaintiff remains
in force and the Plaintiff is precluded from proceeding with the
present action instituted against the
Defendant.
[7] The second ground relied
upon by the Defendant in
r
his opposition to summary
judgment is that he did not receive the Plaintiffs notice in terms
of section 129(I)(a) of the Act.
[8] When this matter was argued
before me Mr Blomkamp, who appeared on behalf of the Defendant,
indicated that the Defendant was
not persisting with this latter
gi-ound in light of the fact that it has become settled law that
once the said notice has been
sent by the credit provider in
compliance with the Act it does not necessarily have to come to the
attention of the credit receiver,
[9] In light of the aforegoing,
it was only necessary for me to consider the first ground raised by
the Defendant in opposition
to the Plaintiffs application for
summary judgment.
The Arguments
[10] Mr Moodley, on behalf of
the Plaintiff, submitted that section 86(2) of the Act provides that
an application in terms of
section S6 of the Act (debt review) may
not be made in respect of and does not apply to
5
that particular credit
agreement if, at the time of that application, the credit provider
under that credit agreement has proceeded
to take the steps
contemplated in section 129 of the Act to enforce that agreement.
[11] In support of this
contention he relied upon the decision
ofNedbankLtd
and Others
v
National Credit
Regulator and Another
2011
(3) SA 581
(SCA), In this matter it was held, inter alia, that by
giving the notice envisaged by s 129(l)(a) the credit provider "has
proceeded to take the steps contemplated in s 129 to enforce the
agreement; a debt review relating to that specific agreement
U
thereafter excluded (at 590 F)'\
[12] I am, of course, insofar
as this principle is ultimately applicable to the facts of the
present matter, bound thereby.
[13] In amplification of the
above argument, Mr Moodley also relied upon the fact that the
provisions of s 86(7)(c)(ii) do not
authorise a Magistrates
1
Court seized with a debt review
application to
u
re-instate"
a credit agreement that has been properly cancelled-
[14] Also, it was argued on
behalf of the Plaintiff that following the cancellation of an
agreement the only "amount"
that the magistrate may reduce
and the only dates for payment that may be postponed as contemplated
in terms of s 86(7) of the
Act arc those pertaining to the
obligations that remain in place once the subject matter of that
credit agreement has been surrendered
in terms ofs 127 of the Act,
Accordingly, it was contended that once an agreement was cancelled
and even where a debt review
was held with an older made by a
magistrate as set out above the credit receiver was not entitled to
retain the subject matter
or "merx" of the agreement and
the credit provider was entitled to the return thereof
[15] In support of the
aforesaid principles Mr Moodley sought to rely primarily upon the
decisions of
Motimba
Management and Labour Services cc and Others v SA Taxi
Securitization (Pty) Ltd and Another
(a
decision of the South Gauteng High Court delivered on 24 March 2010
under Case NoJ6490/2009, at this time unreported, at pages
11 and
12) and the decision of
BMW
Financial Services (SA) (Pty) Ltd
v
Donkin
2009
(6) SA 63
(KZD). Reliance was also placed upon the decisions of
Standard Bank of SA
v
Newman,
an
unreported decision of the Western Cape under Case No.2777l/20\0
delivered on 15 April 2011 at paragraph 11;
Wesbank
v
Mohideen
(Western Cape) an
unreported decision under Case No,10870/2010 (at paragraph 11);
SA
Taxi Securitization (Pty) Ltd
v
Chesane
2010
(6) SA 557
(GSJ) at paragraph 27.
[16] Mr Blomkamp (on behalf of
the Defendant) has submitted that whilst I am bound to accept the
judgment of the Supreme Court
of Appeal in the matter of
Nedbank
Ltd and Others
v
National Credit
Regulator and Another (supra)
in
mat where a notice has been provided by a credit provider in terms
of section
129(l)(a) of the Act a debt
review relating to that specific agreement is thereafter excluded,
this is distinguishable from a
case where, despite the provision of
such a notice, an order has been made by a Magistrates' Court in
terms of s 87 of the Act,
[17] Put simply, Mr Blomkamp's
argument is that where a credit provider has given notice in terms
of section 129(l)(a) of the
Act and the credit receiver then gives
notice that he wishes to apply for a debt review that credit
receiver is not excluded
horn doing so. In other words, it is open
for the credit provider to either give the requisite notice in terms
of s 86(10) of
the Act terminating the debt review process or oppose
the application for debt review in the Magistrates' Court, If
neither of
these steps are taken it must follow (on the argument as
put forward by Mr Blomkamp) that the order of the Magistrates' Court
is a valid one until it has been set aside.
[18] in support of the
aforegoing Mr Blomkamp relied on the yet unreported judgment in the
matter of
Reid and
Another
v
Standard
Bank of SA Ltd
Case
No,AR.6/l 1, a decision of the Full Bench of the ICwaZulu-Natal High
Court, Pietermaritzburg. In this matter Lopes J (Jappie
J and Ndlovu
J concurring) held, inter alia, that the provisions of ss 86(2) do
not necessarily render a decision by a magisu"ate
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 bns taken steps in terms of s 129 but there is nothing in
the Act to indicate that once having done
so, it is visited with a
nullity (at subparagraph 9(c)) of the judgment). Further, also
at sub-paragraph 9(c) of the judgment
the learned Judge held the
following:
"In
my
view il was
incumbent on ihe respondent to have applied to set aside the
Magistrates* Ccurt orders rather than seeking simply
to ignore ihem.
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 other patties to the
order"
[19] Whilst T am bound by the
decision of
Nedbank
and Others v National Credit Regulator and Another (supra)
J
am likewise bound by the decision of
Reid
and Another v The Standard Bank of SA Ltd (supra).
See
also;
Jacobs v
Baumann NO
2009 (5)
SA <132 (SCA) at paragraph 20;
Twit
v Ipser
1993 (3) SA
577
(A) at 589 C;
Clipsal
Australia (Pty) Ltd and Others
v
Gap Distributors
(Pty) Ltd and Others
2010
(2) SA 2S9
(SCA) at paragi-aph 2 1.
[20] With regard to the
Plaintiffs reliance on the decisions of
Matimba
Management and Labour Services cc and Others v SA Taxi
Securitization (Pty) Ltd and Another (supra); BMW Financial Services
SA (Pty) Ltd v Donkin (supra)
and
Standard Bank of SA v
Newman (supra)
Mr
Blomkamp submitted that all of these decisions were distinguishable
from the present matter on the basis that in
Matimba
the credit provider
had given notice in terms of s 86(10) of the Act; in
Donkin
the credit provider
had cancelled the agreement before issuing summons and in
Newman
the credit receiver
had failed to refer the matter to a debt counsellor.
[21] Relying on the aforegoing
Mr Blomkamp submitted that the Plaintiffs application for summary
judgment should be dismissed
with costs.
Conclusion
[22] It is common cause in this
matter that the Defendant was in arrears in respect of the
instalments payable by him to the Plaintiff
in terms of the
agreement. Relying on the Defendant's breach of the agreement (which
Is also common cause) the Plaintiff seeks
to have the motor vehicle
returned to it through the remedy of summary judgment and that the
remainder of the Plaintiffs claim
against the Defendant be
adjudicated upon at-trial.
[23] To my mind the answer as
to whether or not the Plaintiff is entitled to the mum of the motor
vehicle largely (if not solely)
depends, within the framework of the
Act and the remedy of summary judgment, when cancellation of the
agreement takes place.
In this regard Mr Moodley also submitted that
I
should
construe the Plaintiffs notice in terms of s 129(l)(a) of the Act to
be the Plaintiffs lawful cancellation of the agreement.
Whilst I
understand Mr Moodley's desire to have me construe this notice to be
the Plaintiffs cancellation of the agreement in
that it obviously
preceded the Defendant's referral to the debt counsellor, I cannot
do so. In the first instance the said notice,
apart from the fad
that it describes itself as a notice in terms of s 129 read with s
130 of the Act also bears the heading "Letter
of Demand".
Moreover, it contains no reference whatsoever to any purported
cancellation of the agreement. Finally, clause
8 of the agreement
(clause 8.2,2 thereof) specifically provides for cancellation of the
agreement after due demand,
[24] In addition to the
aforegoing paragraph 12 of the Plaintiffs Particulars of Claim
simply makes the broad averment that "die
Plaintiff terminated
the agreement". There is nothing to support this averment. In
the alternative thereto, it is averred
that "the agreement is
terminated herewith
11
.
Accordingly, it must be accepted that the agreement was only
cancelled on the 11"
1
of October 2011 by way of
service of the Plaintiffs Combined Summons upon the Defendant.
See;
Swart
v Vosloo
1965 (1)SA
100 (AD);
Middelburgse Stadsraad v
Trans-Natal Steenkoolkorporasie Bpk
1987
(2) SA 244(TPD)at249(A-C)
;
Phone-a-Copy Worldwide (Pty)
Ltd. v Orkin and Another
1986
(1) SA 729
(AD) at 751 A- C
[25] There is no averment in
the Plaintiffs Particulars of Claim that the Plaintiff terminated
the debt review procedure by the
requisite notice in terms of s
86(10) of the Act. Annexure "E'\ which is not referred to in
the Plaintiffs Particulars of
Claim but appears at pages 18 and 19
of the papers in this application for summary judgment, is a letter
from the Plaintiff dated
thel2th of August 2011 and which appears to
have been sent by registered post on the 15th of August 2011 (at
page 19 of the application
papers). This letter is addressed solely
to the debt counsellor and has not been addressed either to the
consumer or the National
Credit Regulator in terms of s 86(10)(a)
and (c) of the Act. In addition thereto paragraph 3 of the letter
states:
“
In the above
circumstances, the Consumer's application for debt review is
declined".
[26] Not only is there no
provision in the Act for a credit provider to "decline" a
credit receiver's application for
debt review but this letter
clearly does not comply with the provisions of s 86(10) of the Act.
Further, in light of the fact
that no reference is made thereto in
the Plaintiffs Particulars of Claim, I should have little or no
regard to the contents thereof.
In the premises the Plaintiff cannot
rely on a termination of the debt review process in terms of s
86(10) of die Act to entitle
the Plaintiff to enforce the agreement
as contemplated by the provisions of s 129(1)(b)(i) of the
Act.
[27] Accordingly, the order
granted by the Magistrates' Court on the 28
11
'
of September 2011 is a valid and binding order between the Plaintiff
and the Defendant (and between the Defendant and Standard
Bank). On
the facts of this matter it is clear that the Plaintiff seeks
summary judgment arising horn an action instituted after
the
aforesaid order of the Magistrates' Court without seeking to set
aside that order. As set out above, the Plaintiff has not
complied
with the provisions of a 86(10) of the Act and it is further common
cause that (despite having been given the opportunity
to do so) the
Plaintiff did not oppose the Defendant's application for debt review
in the Magistrates' Court.
[28] On the basis of the
reasoning and judgment in
Reid
and Another
v
The
Standard Bank of SA Ltd (supra)
the
Plaintiffs application for summary judgment against the Defendant
must fail.
[29] At this stage 1 feet that
it is incumbent upon me to note that the decision of
Reid
and Another v The Standard Bank of SA Ltd (supra),
insofar
as it has been referred to herein, is not (as it might
prima
facie
appear) in
conflict with the decision of
Nedbank
Ltd and Others
v
National Credit
Regulator and Another (supra).
Indeed,
when the Full Bench of the KwaZulu-Natal High Court
(Pietcrmarilzburg) was seized with the matter
of
Reid (supra)
the
learned Judges must have been well aware of the decision of die
Supreme Court of Appeal in
Nedbank
(supra).
[30] I say this because the
decision in
Nedbank
(supra)
does not
exclude the steps that may be taken by a credit receiver after
receipt of a notice from the credit provider in terms
of s 129(l)(a)
of the Act. This would, as highlighted in that judgment and in other
judgments which preceded it, be absurd,
(Starita
v ABSA Bank Ltd and Another
2010
(3) SA 443
(GSJ);
BMW
Financial Services (SA) (Pty) Ltd
v
Mudafy
2010
(5) SA 618
(KZD)), Accordingly, a credit receiver is entitled to
take die said steps and institute an application for debt review in
terms
of s 86 of the Act. Likewise the credit provider is entitled
to take appropriate steps within the parameters of the Act, This
accords with the policy behind the Act as clearly set out in the
matter of
SA Taxi
Securitisation (Pty) Ltd v Mbatha and two similar cases
2011
(1) S A 310
(GSJ) at 316 B-J.
[31 ] Whilst the decision m
Nedbank and Others v
National Credit Regulator and Another (supra)
excludes
(based on s 86(2) of the Act) a debt review where a credit provider
has given notice to a credit receiver in terms of
s 129(l)(a) of the
Act the Court did not deal with the situation where an order is made
in respect of debt review after that
notice and the effect thereof.
[32] In the premises I am bound
to follow the decision of
Reid
and Another v The Standard Bank o/SA Ltd (supra)
unless
that case is clearly distinguishable from the facts of the present
matter. In this regard it is not and it was never argued
before me
that such a distinction could be drawn.
[33] I also wish to add at this
stage that in light of, inter alia, the decision of
Reid
and Another v The Standard o/SA Ltd (supra)
the
contention by Mr Moodley that any order by the Magistrates^ Court
could not "re-instate" an agreement which had
been
lawfully cancelled cannot be sustained. Apart from the fact that (as
dealt with above) the Plaintiff only sought to cancel
the agreement
after the order was made by the Magistrates' Court,
Reid
(supra)
is clear
that the said order must stand.
[34] The only remaining issue
to be decided is the argument as put forward on behalf of the
Plaintiff that the magistrate could
only make an order in terms of s
86(7) of the Act and more particularly in respect of a debt review,
in relation to the monetary
obligations as between the Plaintiff and
the Defendant and not in respect of the subject matter of the
agreement (the motor vehicle).
Firstly, I am satisfied that in terms
of the agreement the return of the motor vehicle by the Defendant to
the Plaintiff can
only follow upon the lawful cancellation of the
agreement by the Plaintiff. As dealt with above this cancellation
only took place
after the order granted by the Magistrates' Court-
In tight thereof this argument cannot carry any weight.
[35] Even if this were not the
case I am satisfied that the decisions relied upon by the Plaintiff
(dealt with above) are indeed
distinguishable on the facts as
submitted by Mr Blomkamp in his argument and also dealt with herein.
This is also true in respect
of the other cases cited by Mr Moodley
in his Heads of Argument.
[36] Further, I am satisfied
that in light of the agreement itself the monetary obligations of
the Defendant to the Plaintiff
cannot be separated from the subject
matter or merx of the agreement. Put simply, in order to enforce the
agreement, including
the return of the motor vehicle the Plaintiff
must cancel the entire agreement. The agreement ha?, not been
cancelled but is
subject to the Magistrates' Court order. This
includes the possession of die motor vehicle.
[37] Lastly, it was also argued
on behalf of the Defendant that summary judgment could not be
granted as prayed since should it
be ordered that the Defendant
return the motor vehicle to the Plaintiff and same be sold in
reduction of the Defendant's indebtedness
to the Plaintiff this
could well affect the restructuring of the Defendant's indebtedness
to Standard Bank as dealt with in the
order of the Magistrates
1
Court, Support for this
argument is to be found in the matter of
Reid
and Another
v
Standard Bank of SA
Ltd (supra),
at
subparagraph
9(c)
where it was held
that any assumption of invalidity in respect of such an order would
possibly affect other parties to the order.
This is a valid argument
and is further support for not only the validity of the Magistrates'
Court order but also why summary
judgment should not be granted in
this matter.
[38] in the past the remedy of
summary judgment was often described as
1
'extraordinary
1
'.
Today it is merely "ordinary" in that the principles
applicable thereto are fairly trite. For that reason I do not
intend
to burden this judgment by setting out same.
[39] Having regarding to the
aforegoing.
I
am
satisfied that the Defendant has placed before this Court material
facts from which 1 can conclude that the Defendant has a
bona
fide
defence to the
Plaintiffs action within the meaning o f Ru 1 e 3 2 (su mmary j u
dgment),
Order
[40] In the premises T make the
following order namely:
(a) The Plaintiffs application
for summary judgment is dismissed with costs.
(b)
The Defendant is given leave to defend the action.
B C WANLESS AJ
DATE OF HEARING : 15 MARCH 2012
DATE OF JUDGMENT: 30 MARCH 2012
PLAINTIFFS COUNSEL: MR V
MOODLEY
PLAINTIFFS ATTORNEYS: NICHOLSON
& COMPANY
DEFENDANT'S COUNSEL: MR P.J.
BLOMKAMP
DEFENDANTS ATTORNEYS: WHA
COMPTON ATTORNEYS