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[2012] ZAECMHC 1
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SA Taxi Securitisation (Pty) Ltd v Xolile (1623/11) [2012] ZAECMHC 1 (26 January 2012)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE DIVISION: MTHATHA)
CASE NO: 1623/11
In the matter between:
SA TAXI SECURITISATION (PTY) LTD
…................................
PLAINTIFF
And
WILI XOLILE
…...........................................................................
DEFENDANT
JUDGMENT
PAKADE
ADJ
P.:
[1] This is an application for summary judgment in terms
whereof the plaintiff seeks relief provided for by Rule 32 of the
Uniform
Rules of the High Court.
[2] In terms of rule 32 (1), a plaintiff may apply for
summary judgment where the defendant has delivered a notice of
intention
to defend on a claim based on a liquid document, for a
liquidated amount in money, for delivery of movable property or for
ejectment
together with interest and costs.
[3] Rule 32(2) provides that in a summary judgment
application there must be a notice of application filed together with
an affidavit
deposed to by a person who can swear positively to the
facts verifying the cause of action and the amount, if any, claimed
and
stating that in his opinion there is no
bona fide
defence
to the action and that the notice of intention to defend has been
delivered for the purpose of delay.
[4] In terms of rule 32(3), a defendant may either
furnish security for any judgment that may be given or satisfy the
court by affidavit
or with the leave of the court, by oral evidence
given by himself or by any other person who can swear positively to
the facts
that he has a
bona fide
defence to the action. The
affidavit or oral evidence shall disclose fully the nature and
grounds of the defence and the material
facts relied upon by him.
[5] The drastic procedure of summary judgment provides
the plaintiff with a quick remedy against the defendant who has
entered notice
of intention to defend when he has no
bona
fide
defence but having entered notice of
intention to defend for the purposes of delay. The approach of the
court in deciding an opposition
to a summary judgment application is
set out by
Corbett JA
in
Maharaj vs Barclays National Bank
1
:
“
Accordingly, one of the ways in which a
defendant may successfully oppose a claim for summary judgment is by
satisfying the court
by affidavit that he has a bona fide defence to
that claim. Where the defence is based upon facts, in the sense that
material facts
alleged by the plaintiff in his summons, or combined
summons are disputed or new facts are alleged constituting a defence,
the
court does not attempt to decide these issues or to determine
whether of not there is a balance of probabilities in favour of the
one party or the other. All that the court enquires into is: (a)
whether the defendant has “fully” disclosed the nature
and grounds of his defence and the material facts upon which it is
founded, and (b) whether on the facts so disclosed the defendant
appears to have, as to either the whole or part of the claim, a
defence which is both bona fide and good in law. If satisfied on
these matters the court must refuse summary judgment, either wholly
or in part, as the case may be. The word “fully”
as used
in the context of the Rule (and its predecessors), has been the cause
of some judicial controversy in the past. It connotes,
in my view,
that while the defendant need not deal exhaustively with the facts
and the evidence relied upon to substantiate them,
he must at least
disclose his defence and the material facts upon which it is based
with sufficient particularity and completeness
to enable the court to
decide whether the affidavit discloses a bona fide defence.”
[6] The relief sought by the plaintiff is for an order:
(a) Confirming the termination of the agreement;
(b) Return of the motor vehicle, a 2008 model VW Crafter
50 80KW, 23 seater with engine number BJK026362 and chassis number
WVZZZ2EZ86016676;
(c) Forfeiture by the defendant of all the amounts paid
to date in terms of the agreement and;
(d) Costs.
[7] The relief sought is supported by an affidavit
deposed by a certain Phyllis Lombard, a manager of the Legal Section
of the plaintiff,
who was duly authorized to depose to this affidavit
on behalf of the plaintiff. Phyllis Lombard’s affidavit is to
the effect
that his position as a legal manager gives him possession
and control of all the files and records of the plaintiff concerning
the agreement between the plaintiff and the defendant as well as the
plaintiff’s dealings with the defendant in this matter.
He
states that by virtue of having familiarized himself with the
contents of these records and files, he has personal knowledge
of the
facts he has deposed to in his affidavit in this matter.
[8] His states that he has read the summons, particulars
of claim and summary judgment application issued by the plaintiff. He
says
that he can and do swear positively to the claim set out in the
summons and verify the cause of action. He verily believes that
the
defendant has no
bona fide
defence and has entered an
appearance to defend solely for the purpose of delay.
[9] I am satisfied that the affidavit of Phyllis Lombard
sets out the essential elements of rule 32 (2).
[10] The particulars of claim in the summons contains
allegations to which the defendant did not plead. The plaintiff is
the credit
provider duly registered and as defined in the
National
Credit Act, 34 of 2005
. During February 2008 the plaintiff entered
into a written lease agreement with the defendant in terms whereof
the plaintiff leased
to the defendant a motor vehicle referred to in
paragraph [6] above on a monthly rental of R10 887.55 payable on 7
April 2008 as
a first installment and monthly thereafter. The
agreement further stipulated that should the defendant fail to pay
the rental on
due date or fail to satisfy any of his other
obligations in terms of the agreement , the plaintiff shall, without
prejudicing any
of its other rights in law, be justified in:
1. Cancelling the agreement and claim return and
possession of the vehicle;
2. Be entitled to retain all payments already made by
the defendant;
3. Claim interest on the outstanding amount;
4. Costs on attorney and client scale.
[11] The defendant has breached the agreement in that he
has failed to pay the rental and as at the 3
rd
January
2011 he was in arrears with his payment in the sum of R25 971. 85.
[12] The plaintiff further avers that in compliance with
the provisions of
section 129
read with
section 130
of the
National
Credit Act, a
letter was sent by the plaintiff to the defendant by
registered post but the defendant failed to pay the arrears within
twenty
business days; failed , within the period prescribed by the
Act, to refer the agreement to a Debt Counselor, Alternative Dispute
Resolution Agent, Consumer Court or Ombud with jurisdiction to
resolve any dispute under the agreement or develop and agree on
a
plan to bring the payments under the agreement up to date.
[13] On 15 June 2011 the debt counselor delivered to the
plaintiff the notice contemplated in
section 86(4)(b)(i)
of the Act
(Form 17.1) which notice was declined by the plaintiff on 29 June
2011.
[14] Notwithstanding all this, the defendant has not
returned the vehicle to the plaintiff. The plaintiff further makes
the point
that it has terminated the agreement because of its breach
by the defendant.
[15] The defendant has raised some defences in terms of
the
National Credit Act. He
contends that in terms of those defences
he has a bona fide defence to the action. He states that he applied
for debt review on
13 June 2011. Thereafter his Debt Counselor made a
determination that he was over indebted and that therefore his
financial obligations
should be re-arranged by extending the period
of the credit agreement and by reducing the amount of each payment
due. A form 17.2
with a payment proposal was sent to all the affected
credit providers. He states that the applicant had, upon receipt of
form 17.1,
refused to negotiate with his Debt Counselor and sent a
letter declining his debt review application. Further the applicant
unequivocally
declined his Debt Counselor’s request for a
certificate of balance thus placing him in a predicament of not being
in a position
to properly conduct a restructure to the credit
agreement. Upon assessing his over indebteness, his Debt Counselor
determined that
his monthly debt repayment exceeded the balance
derived at by deducting his minimum living expense from the nett
income.
[16] The Debt Counselor further made an assessment of
the credit agreement and came to the conclusion that it was a
reckless credit.
The grounds for such a finding are:
1. The applicant failed to conduct a proper assessment
as required by
section 81(2)
in that the defendant did not understand
and appreciate the risks and costs of the acquired credit and of the
rights and obligations
of the consumer under the credit agreement,
2. There was a lack of demonstration by the consumer of
an understanding of what his taxi income would be in relation to the
operational
costs of running the business and the costs of his living
expenses.
3. He was not aware that there would be no ownership of
the vehicle he had purchased. His intention was to enter into a
purchase
and sale agreement and not a lease.
4. His debt repayment history on other credit agreements
was not available or did not warrant the credit granted to him at the
time.
5. The defendant was unemployed at the time and had no
sufficient income to timeously satisfy the debt obligations under the
agreement.
The defendant further avers that the plaintiff’s
assessment was not fair and objective in that it did not take into
account
the following:
1. Verification of the information he supplied to them
and/or verification of their own experience and projections against
the actual
income earned for the particular taxi route.
2. A business plan.
3. Costs of wear and tear, for example tyres.
4. Variation in-service based on kilometers travelled.
5. Unexpected mechanical breakdown.
6. Contingency plan for installments in the case of an
accident.
7. Number of taxis for the route finance he sought visa
vi the position in the area and the segments of the mode of transport
used.
8. The number of trips the taxi will complete per day.
9. Realistic fuel consumption on the number of trips per
route.
[17] The defendant also complains that the agreement
contains unlawful provisions such as insurance and tracker.
[18] In a nutshell the defendant’s defence to the
summary judgment application is that he had applied for a debt review
which
was unfairly declined by the plaintiff. The second defence is
that of over indebtedness, and the third defence is that of reckless
credit.
[19] I will consider, herein below each of the defences
raised by the defendant under the
National Credit Act.
Debt
review unfairly declined
[20]
Section 86
provides a mechanism for a debt review.
It provides:
“
(1). A consumer may apply to a Debt Counselor in
the prescribed manner and form to have the consumer declared
over-indebted.
(2) An application in terms of this section may not be
made in respect of, and does not apply to, a 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
to enforce that agreement.”
[21] The respondent applied for debt review on 13 June
2011 which was declined by the applicant on 29 June 2011. After the
section 29
notice had been issued and served on the defendant, it was
not possible for the defendant to invoke the
section 86
remedy for a
debt review because the applicant had already taken steps to enforce
the agreement.
Section 129
provides:
“
(1) if the consumer is in default under a credit
agreement, the credit provider-
may draw the default to the notice of the consumer in
writing and propose that the consumer refer the debt to a Debt
Counselor,
Alternative Dispute Resolution Agent, Consumer Court, or
Ombud with jurisdiction, with the intent that the parties resolve
any
dispute under the agreement or develop and agree on a plan to
bring the payments under the agreement up to date; and
Subject to
section 130(2)
, may not commence any legal
proceedings to enforce the agreement before-
first providing notice to the consumer, as
contemplated in paragraph (a), or in
section 86(10)
, as the case
may be; and
meeting any further requirements set out in
section
130.
”
[23] On 08 July 2011 the applicant approached the Court
for an order to enforce the credit agreement as the defendant was
still
in default and has been in default for at least 20 days of
business and 10 days have elapsed since the plaintiff had delivered
notice to him on the 04 January 2011. So, by the time the defendant
applied for debt review, the plaintiff had already taken steps
to
enforce the agreement and was correct, in my view, in declining the
debt review application (
Nedbank Ltd and
others v The National Credit Regulator and another
2
)
[25]
Further the defendant did not
respond to the
section 29
notice nor did he apply for debt review
within ten days after the
section 2
9 notice was given.
Reckless credit
[26] The plaintiff is not claiming damages but for the
return of the motor vehicle after the cancellation of the agreement
under
which the defendant possessed the motor vehicle. The
National
Credit Act does
not cater for a situation in which the consumer can
retain goods and the money. If he retains the money, he must return
the goods
and this is exactly what the plaintiff seeks in this
summary judgment application upon the defendant’s breach of
contract
to pay for the goods (
SA
Securitisation
(Pty)Ltd v T. Booi
and three other similar matters case nos 5065;4021 and
5069/2009 unreported ECG judgment).
Over indebtedness
[27]
Section 86
(2) provides that an application by a
consumer to be declared over indebted may not be made in respect of ,
and does not apply
to, a 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
to
enforce that agreement. This section has been interpreted as follows
in
Starita vs ABSA Bank Ltd and another
unreported case no 745/09 GSJ 26 March 2010, which
interpretation was followed by Plasket J in SA Securitisation Pty)
Ltd v Booi
and other similar matters, (supra) with which I agree:
“
Section 86
(2) therefore prohibits the
application for a debt review in respect of a particular credit
agreement where the credit provider
under that credit agreement has
proceeded to take the steps contemplated in
section 129
to enforce
the agreement . On a plain reading of these words, steps taken under
section 129
would include the giving of a notice under that section.
However,
section 129
(1) requires a credit provider in the notice
inter alia, to propose that the consumer refer the credit agreement
to the Debt Counselor
(clearly in terms of
section 86).
If the
consumer does so, the credit provider may argue that
section 86(2)
prohibits this. In order to avoid the resulting circuitous absurdity,
it seems to me that the proper construction of
section 86(2)
is that
the steps taken under
section 129
as referred to in
section 86(2)
are
the steps taken after the notice has been given, starting with the
issue of summons.”
[26] The defendant made the application to be declared
over indebted long after the expiry of the prescribed period from the
date
section 29
notice was given hence it was declined by the
plaintiff.
ORDER
[27] The following order is therefore made:
That summary judgment is granted infavour of the
plaintiff against the defendant for:
1. The confirmation of the termination of the credit
agreement between the plaintiff and the defendant;
2. The return of the motor vehicle described as 2008
Model VW Crafter 50 80KW 23 seater with engine number BJKO26362 and
chassis
number WVIZZZ2EZ86016676 to the plaintiff forthwith;
3. The forfeiture by the defendant of all the amounts
paid by him on the agreement and;
4. Costs of suit.
___________
LP Pakade
ACTING DEPUTY JUDGE PRESIDENT
For the Plaintiff : Mr Botma
Instructed by : Keightley Incorporated
For the Respondent : Mr Zilwa
Instructed by : Jolwana Mgidlana Inc
Date Heard : 29 September 2011
Date Delivered : 26 January 2012
1
1976(1)
SA 418 (A) at 426 A-D;
2
2011(3)
SA581(SCA) paragraph 14