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[2012] ZAKZDHC 8
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Metmar Trading (Pty) Ltd t/a West African Group v Summer Sun Trading 99 (Pty) Ltd t/a Plasti-Pak and Others (6010/11) [2012] ZAKZDHC 8 (24 February 2012)
In
the KwaZulu-Natal High Court, Durban
Republic
of South Africa
Case
No : 6010/11
In
the matter between :
Metmar
Trading (Pty) Ltd t/a
West
African Group
…..........................................................................................
Plaintiff
and
Summer
Sun Trading 99 (Pty) Ltd t/a
Plasti-Pak
….............................................................................................
First
Defendant
Prakash
Bissoon
….............................................................................
Second
Defendant
Nolan
Daniel
….......................................................................................
Third
Defendant
Prakash
Nirmal
….................................................................................
Fourth
Defendant
Judgment
Lopes J
[1] The plaintiff seeks summary
judgment against the defendants jointly and severally, the one paying
the others to be absolved,
for payment of the sum of R301 139,18
together with interest thereon and costs.
[2] The plaintiff’s cause of
action against the first defendant is based upon an acknowledgement
of debt and its cause of
action against the second, third and fourth
defendants is based upon suretyship agreements signed by these
parties. The defendants
have delivered opposing affidavits resisting
the grant of summary judgment, in which they have raised a number of
defences. Included
in those defences is that the second, third and
fourth defendants (who signed as sureties for, and co-principal
debtors with, the
first defendant for its indebtedness to the
plaintiff) were all married in community of property and that their
spouses -:
(a) did not consent to the suretyship
obligations as required by
s 15(2)(h)
of the
Matrimonial Property
Act, 1984
; and
(b) were not joined in the action when
they should have been.
The plaintiff’s counsel, Ms
Oliver
conceded that the usual order refusing summary judgment
should be granted in respect of the second, third and fourth
defendants.
[3] The sole defence raised by Mr
Oberholzer,
the attorney for the first defendant, is that the
acknowledgement of debt upon which the plaintiff’s claim is
founded, is
subject to the provisions of the National Credit Act,
2005. (‘the Act’). That being so, the plaintiff was
obliged to
have given the first defendant proper notice in terms of
ss 129 and 130 of the Act which it failed to do. It also failed to
register
as a credit provider in terms of the Act. The plaintiff’s
claim is accordingly unenforceable.
[4] Ms
Oliver
submitted that
the acknowledgement of debt, whilst constituting a credit transaction
as defined in subsec 8(4)(f) of the Act, was
nonetheless a ‘large
agreement’ as defined in terms of subsec 9(4)(b) of the Act,
and accordingly excluded from the
operation of the Act by virtue of
the provisions of subsec 4(1)(b).
[5] S 4(1) of the Act provides that :-
‘
(1) Subject
to sections 5 and 6, this Act applies to every credit agreement
between parties dealing at arm’s length and made
within, or
having an effect within, the Republic, except –
a credit agreement in terms of which
the consumer is –
a juristic person whose asset value
or annual turnover, together with the combined asset value or
annual turnover of all related
juristic persons, at the time the
agreement is made, equals or exceeds the threshold value determined
by the Minister in terms
of section 7(1);
...
a large agreement, as described in
section 9(4), in terms of which the consumer is a juristic person
whose asset value or annual
turnover is, at the time the agreement
is made, below the threshold value determined by the Minister in
terms of section 7(1);
...’
[6] No evidence was put before me
indicating the asset value of the plaintiff or its annual turnover,
and I accordingly assume that
subsec 4(1)(a) is not applicable to
this application. It was not suggested to me, and I do not believe
that it is so, that sections
5 and 6 of the Act are relevant to this
application. It is common cause that the threshold referred to in
subsec 7(1)(b) of the
Act has been set at R250 000 (see Government
Notice 713 of 2006 in Government Gazette 28893 of 1
st
June
2006).
[7] S 8(1) of the Act provides that :-
‘
(1) Subject
to subsection (2), an agreement constitutes a credit agreement for
the purposes of this Act if it is –
a credit facility, as described in
subsection (3);
a credit transaction, as described in
subsection (4);
...;
any combination of the above.’
[8] S 8(4) provides that :-
‘
An
agreement, irrespective of its form but not including an agreement
contemplated in subsection (2), constitutes a credit transaction
if
it is –
...
(f) any other agreement, other than a
credit facility or credit guarantee, in terms of which payment of an
amount owed by one person
to another is deferred, and any charge, fee
or interest is payable to the credit provider in respect of –
(i) the agreement; or
(ii) the amount that has been
deferred.’
[9] It is common cause that the
provisions of subsec 8(2) are of no consequence in this application.
In addition, the acknowledgement
of debt does not fall within the
definition of a ‘credit guarantee’ as defined in the Act.
[10] S 9(4) provides that :-
‘
A credit
agreement is a large agreement if it is –
...;
any other credit transaction except a
pawn transaction or credit guarantee, and the principal debt under
that transaction or guarantee
falls at or above the higher of the
thresholds established in terms of section 7(1)(b).’
[11] Mr
Oberholzer
submitted
that because the acknowledgement of debt constituted both a credit
facility and a credit transaction, the provisions
of subsec 8(3) of
the Act are applicable to the acknowledgement of debt. That
sub-section provides :-
‘
(3) An
agreement ... constitutes a credit facility if, in terms of that
agreement –
a credit provider undertakes –
to supply goods ... to the consumer
...; and
either to –
defer the consumer’s
obligation to pay any part of the cost of goods ... , or to repay
to the credit provider any part
of an amount contemplated in
subparagraph (i); or
...; and
any charge, fee or interest is
payable to the credit provider in respect of -
any amount deferred as contemplated
in paragraph (a)(ii)(aa);
...’
[12] In this regard Mr
Oberholzer
placed reliance
Carter Trading (Pty) Ltd v Blignaut
2010 (2)
SA 46
(ECP) at paragraphs 19 to 22.
[13] The facts in
Carter Trading
are similar to the present matter inasmuch as goods were supplied,
and an acknowledgement of debt for the amount outstanding was
proffered by the defendant. The question which had to be answered in
that case was whether the acknowledgement of debt was a credit
agreement as described in s 8 of the Act. After considering the
provisions of that section, the court held that the acknowledgement
of debt was in fact a ‘credit agreement’. This was on the
basis that the interest payable to the credit provider in
terms of
the acknowledgement of debt rendered it a credit facility, and
therefore it was to be considered a credit agreement in
terms of
subsec 8(1)(a).
[14] What did not have to be
considered in
Carter Trading
was whether the transaction
constituted a ‘large agreement’ in terms of the Act
which, in terms of subsec 4(1)(b) read
with subsec 9(4)(b), would be
excluded from the operation of the Act.
[15] The question to be answered then
is whether an agreement, which is both a credit facility and a credit
transaction, may constitute
a ‘large agreement’ and be
excluded from the operation of the Act, or whether, the fact that the
acknowledgement of
debt is a credit facility renders the provisions
of the Act applicable irrespective of whether it is a ‘large
agreement’?
[16] Whether the instalment sale
agreement is viewed as a ‘credit facility’ as defined in
subsec 8(3) and/or a ‘credit
transaction’ in terms of
subsec 8(4), it is defined as a ‘credit agreement’ for
the purpose of the Act in terms
of subsec 8(1)(a) or 8(1)(b) and/or
8(1)(d).
[17] Subsec 8(6) deals with the
situation envisaged in subsec 8(1)(d) and provides :-
‘
(6) If, as
contemplated in subsection (1)(d), a particular credit agreement
constitutes both a credit facility as described in subsection
(3) and
a credit transaction in terms of subsection (4)(d) –
(a) subject to paragraph (b), that
agreement is equally subject to any provision of this Act that
applies specifically or exclusively
to either –
(i) credit facilities; or
(ii) mortgage agreements or secured
loans, as the case may be, and
(b) for the purpose of applying –
(i) section 108, that agreement must
be regarded as a credit facility; or
(ii) section 4(1)(b) read with section
9(4), that agreement must be regarded as a large agreement if it is a
mortgage agreement.’
[18] The fact that subsection
8(6)(b)(ii) ensures that subsections 4(1)(b) and 9(4)(b) read
together will have the result that a
mortgage bond is treated as a
‘large agreement’ does not mean that other agreements
falling within the ambit of s 8(1)(d)
are excluded from being
regarded as ‘large agreements’. Were that the intention
of the legislature, it would merely
have provided in subsec 9(4)(b)
that mortgage bonds were excluded, and dispensed with the concept of
‘large agreements’.
[19] In my view, because of the
specific inclusion of both credit facilities and credit transactions
in subsec 8(1), the acknowledgement
of debt remains a ‘large
agreement’ as defined in subsec 9(4)(b).
[20] That being so, the provisions of
the Act do not apply to the acknowledgement of debt.
[21] I accordingly make the following
order :-
(1) summary judgment is granted in
favour of the plaintiff against the first defendant for :-
(a) payment of the sum of R301 139,18;
(b) interest on the sum of R293 257,15
calculated at the rate of 9% per annum from the 1
st
December 2010 to date of payment;
(c) costs of suit.
(2) (a) Summary judgment against the
second, third and fourth defendants is refused;
(b) the second, third and fourth
defendants are given leave to defend the action;
(c) the costs occasioned by the
application for summary judgment against the second, third and fourth
defendants are reserved for
decision of the trial court.
Date of hearing : 20
th
February 2012
Date of judgment : 24
th
February 2012
For the Plaintiff : Z Oliver
(instructed by Rina Rheeders Attorneys)
For the First Defendant : J Oberholzer
(instructed by Johan Oberholzer & Co)