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[2012] ZAECMHC 3
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Standard Bank of South Africa (Pty) Ltd v Manyifolo (1865/11) [2012] ZAECMHC 3 (2 February 2012)
IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE HIGH COURT: MTHATHA
CASE NO: 1865/11
Heard on: 01/12/11
Delivered on: 02/02/12
In the matter between:
THE STANDARD BANK OF SOUTH AFRICA
LTD
….......................................................................................................
Applicant
and
NONTSIKELELO PATRICIA MANYIFOLO
….................................
Respondent
_____________________________________________________________
JUDGMENT
____________________________________________________________
NHLANGULELA J:
[1] This is an application for summary judgment in terms
of rule 32 of the rules of this Court.
[2] It appears from the particulars of claim, and
annexures thereto, that the plaintiff and the defendant concluded a
written instalment
sale agreement during or about 06 to 10 September
2007. It is alleged in the particulars of claim that in terms of such
sale agreement
the plaintiff sold to the defendant a motor vehicle
which is described as a 2007 Toyota Yaris T + 3 for the total sum of
R230 707,33.
The purchase price would be payable by means of 59
monthly instalment of R3 137,37, commencing on 01 October 2007
and a final
instalment of R45 604,50 to be made on 03 September
2012. It is a further term of the sale agreement that ownership of
the
vehicle would not pass to the respondent until the full purchase
price is paid in full. Further, in the event that the respondent
fails to pay any of the instalments in terms of the agreement, the
applicant would be entitled to,
inter alia
, put the respondent
in
mora,
cancel the agreement, retake possession of the motor
vehicle and recover the balance of the purchase price plus any
damages incurred
less the value of the motor vehicle as at the date
on which the applicant obtains possession of it.
[3] Accordingly, the motor vehicle was delivered to the
respondent who then commenced paying instalments as agreed with the
applicant.
However, in breach of the sale agreement, the respondent
failed to make due and punctual payments to the applicant with the
result
that, as on 20 June 2011, the total amount owing and payable
by the respondent to the applicant was a sum of R98 379,26.
[4] On 03 August 2011 the applicant duly issued summons
against the respondent seeking a relief in the following terms:
“(a) An Order authorizing the Sheriff of this Honourable Court
to attach, seize from the Defendant, or wherever it may be
found and
hand over the vehicle to the Plaintiff;
(b) That the Plaintiff be authorized to sell the motor vehicle in
execution;
(c) That the Plaintiff may approach the court for an order enforcing
the remaining obligations of the Defendant, if the vehicle
has been
attached and sold, and the nett proceeds of the sale are insufficient
to discharge all of the Defendant’s financial
obligations under
the agreement;
(d) Costs of suit as between attorney and client;
(e) An order declaring the agreement cancelled;
(f) Further and/or alternative relief.”
[5] Pursuant to the filing of a notice of intention to
defend the action by the respondent, the applicant filed an
application for
summary judgment seeking only the relief in
paragraphs (a), (d) and (e) on the basis that the respondent has no
bona fide
defence to the action and she filed a notice to
defend merely for the purposes of delaying the finalization of the
action. The respondent
opposed the granting of the application for
summary judgment.
[6] It is not in dispute that the sale agreement is a
credit agreement as defined in s 1 of the National Credit Act 34 of
2005 (the
Act). Therefore, the provisions of the Act apply to the
agreement. In terms of s 129 (1)(a) of the Act the credit provider
seeking
to enforce payment of a debt by litigation in terms of s 130
is obliged to deliver written notice to a defaulting consumer
encouraging
him/her to approach a debt counsellor, or a dispute
resolution agent, for the purpose of developing a plan suitable to
both the
consumer and credit provider to bring the payments under the
agreement up to date. Annexure “C” to the particulars of
claim is such a notice which the applicant delivered to the
respondent before the summons were issued. Compliance with s 129
(1)(a)
notice is conceded by the respondent.
[7] In opposing the summary judgment application the
respondent elected to file an affidavit as she was entitled to do so
in terms
of Rule 32 (3)(b) of the rules of this Court, which provides
as follows,
inter alia
:
“Upon the hearing of an application for summary judgment the
defendant may –
…
Satisfy the court by affidavit …that he has a
bona fide
defence to the action; such affidavit … shall disclose
fully the nature and grounds of the defence and the material facts
that he has therefor.”
[8] Certain defences have been disclosed by the
respondent in her affidavit. They are the following (I quote them as
they stands
on the affidavit):
“ 11.
As provided by the
National Credit Act, my
indebtedness can still be
referred to a Debt Counsellor even after the proceedings have started
for purposes of determining whether
one of the following courses
cannot be taken.
(i) That the instalment cannot be lowered to an amount that I can
afford and the period of payment be extended, taking into account
my
present financial circumstances, which are not the same as at the
time I signed the contract.
(ii) That the payment of the debt cannot be suspended for a certain
period until I have secured some employment and I am able to
resume
payments.
12.
I have been paying full instalments with no arrears since October
2007 and I started to have financial problems only in 2011. At
the
time the summons were issued I had four months arrears. The price of
the vehicle was R230 707,33, and at the time the
summons were
issued the capital balance was R98 37,26, meaning that I have paid
more than half of the original R230 379,36.
13.
In such circumstances it is not fair for the plaintiff to call for a
fore closure and ask for the orders it is asking to be granted
by
this Honourable Court.
14.
…
18.
My legal representative informs me and I believe her, that even after
an action has been initiated the Court hearing the matter
can still
direct that it be transferred back to a Debt Counsellor for such a
review. It is therefore not true that I do not have
a
bona fide
defence. My defence is that I am entitled to a debt review in terms
of the law if I have been paying properly over the two years
and I
have been temporarily disabled to continue with such payments by
circumstances beyond my control and if my history of payment
does not
reflect me as someone who has no intention of paying the debt.
19.
It may please this Honourable Court not to grant the Summary Judgment
prayed for, instead allow me to file a plea, in which plea
I will
raise the points I have in this affidavit.”
[9] In my reading of the contents of the opposing
affidavit of the respondent, and confirmed during argument, a defence
is raised
that since the balance outstanding is far too less than 50%
of the purchase price and the respondent’s “financial
problems”
do not permit payment of the instalments the Court
must not grant summary judgment but refer her indebtedness to the
debt counsellor
for reviewing in terms of the Act.
[10] It was submitted by
Mrs Voyi-Nyobole,
who
appeared on behalf of the respondent, that this Court is enjoined in
terms of the provisions of s 85 (1) of the Act to refer
the matter to
the debt counselor. The provisions of s 85 read as follows:
“Despite any provision of law or agreement to the contrary, in
any court proceedings in which a credit agreement is being
considered, if it is alleged that the consumer under a credit
agreement is over-indebted, the court may -
refer the matter directly to a debt counsellor with a request that
the debt counsellor evaluate the consumer’s circumstances
and
make a recommendation to the court in terms of section 86(7); or
declare that the consumer is over-indebted, as determined in
accordance with this Part, and make any order contemplated in
section 87 to relieve the consumer’s over-indebtedness.”
[11]
Mrs Voyi-Nyobole
contended that the
allegations made by the respondent in her affidavit are enough for
the Court to exercise its powers as provided
in s 85 of the Act.
[12]
Mr De La Harpe
, who appeared on behalf of
the applicant, submitted that the allegations which appear in the
opposing affidavit are inadequate.
He contended that the respondent
has failed to establish a defence and the material facts upon which
it is founded as required
in terms of Rule 32 in that she did not set
out in her affidavit any particularity regarding her financial
affairs or her estate
and has not, therefore, set out a basis upon
which this Court, or any other, could exercise its discretion in her
favour. Counsel
referred to the case of
First Rand Bank Ltd v
Olivier
2009 (3) SA 353
(SECD). In that case AR Erasmus J said
the following at 359A-B about the objectives of the Act which the
Court should consider
when exercising discretion under s 85:
“[14] A court is obliged to act simply on the defendant’s
allegation of over-indebtedness, but ‘may’ make
an
appropriate order in terms of para (a) or (b) [of s 85 of the Act].
The court will exercise this discretion judicially with
due regard to
the objectives of the NCA which, in the present regard, is to assist
the over-burdened consumer to rehabilitate his
affairs. In doing so,
the Act makes significant inroads into the credit provider’s
common-law rights, as well as its constitutional
right of access to
the courts (s 34 of the Constitution of the Republic of South Africa
Act 108 of 1996). The court will restrict
the statutory limitation of
the credit provider’s right, to the extent that it is
reasonable and justifiable to do so in
our democratic order while
promoting the objects of the NCA.”
[13] Masipa J in
Standard Bank of South Africa Ltd v
Panayiotts
2009 (3) SA 363
(WLD) makes an interesting
observation, with which I agree, on the interface between Rule 32 and
s 85 of the Act. He states as
follows at 371, para. [53]:
“In exercising its discretion the court ought to bear in mind
that, although the relief sought in terms of the NCA is
sui
generis, in a summary judgment application one cannot ignore the
requirements of rule 32 of the Uniform Rules of Court completely.”
He goes further to say the following at 372, para.[55]:
“The application in terms of s 85 must still be
bona fide
and not raised solely as a delaying tactic. The debtor must provide
sufficient information to support his allegation of
over-indebtedness.
This means a consumer who raises a defence of
over-indebtedness must plead and prove, on a balance of
probabilities, that he is
over-indebted as envisaged in s 79 of the
NCA.”
[14] In this matter, I am of the view that the
allegation that it would be unfair to grant summary judgment against
the respondent
on the basis that she has paid instalments which
exceed 50% of the purchase price, without more , is inadequate and,
consequently,
not within the contemplation of s 85 of the Act. The
Court would have been placed in a better position to exercise
discretion where
the full circumstances (the financial problems)
under which the debt was incurred was disclosed. Further, the
respondent would
be better served if she had told the Court on
affidavit if she is employed or has a source of income to pay off the
debt; why she
did not avail herself of the opportunity to approach a
debt counselor prior to debt enforcement; how it came about for her
to be
over-indebted as alleged, and whether it is possible for her
debt to be re-scheduled under the agreement. The respondent has not
even bothered to apply for condonation and explain these matters in a
supplementary affidavit. See:
The Guide to the
National Credit Act
by
Lexis Nexis
at 11 ̶ 21 para. [11:3.3.3]. It is plain from
the nature of the facts alleged in the opposing affidavit that
acceding to the
respondent’s mere say so that she is over
indebted would be prejudicial to the applicant.
[15] However, the
s 85
argument alone is not dispositive
of the application. There is a further submission, based on law,
raised in the heads of argument
for the respondent that the relief
sought in para. [a] cannot be granted because the instalment sale
agreement has not been cancelled,
and that cancellation is impossible
to the extent that the agreement does not authorize cancellation. For
this submission
Mrs Voyi-Nyobole
relies on the judgments in
Absa Bank v Havenga And Similar Cases
2010 (5) SA 533
(GNP);
and
Absa Bank Ltd v De Villiers & Another
2009 (5) SA 40
(C). These cases are the authority for a proposition that a relief
for the attachment of a vehicle under a written instalment sale
agreement can only be granted where the terms of the written
agreement as pleaded in the particulars of claim gives the credit
provider a right to cancel. A third case which was referred to the
Court on the same point, the case of
Absa Bank Ltd v De Villiers
2010 (2) All SA 99
(SCA), is irrelevant to this case because it
deals with judicial review of the decision of a magistrate.
Therefore, I will not
have regard to it.
[16] In this case, the instalment sale agreement has a
Default clause (at page 15 of the papers) which does not provide a
cancellation
clause. There is no clause which provides for it. The
situation prevailing is, therefore, that we have here the particulars
of
claim in which it is pleaded that the agreement gives a right to
the applicant to cancel the agreement whereas, in truth, it does
not.
For that reason the cause of action is defective. Without an
appropriate amendment, no relief based on the particulars of
claim as
they stand can be granted despite the finding I have made with regard
to the respondent’s defence based on the provisions
of s 85 of
the Act.
[17] In the circumstances, the application for summary
judgment ought to be refused. Inevitably, the applicant should pay
the costs
of the application because it ought not to have brought the
application for summary judgment based on a non-existent right to
cancel
the instalment sale agreement.
[18] In the result the following order shall issue:
“
The application for summary judgment be and is hereby
refused with costs.”
______________________________
Z.M.
NHLANGULELA
JUDGE
OF THE HIGH COURT
Counsel for the applicant : Adv. D.H. DE LA HARPE
Instructed by : Drake Flemmer & Orsmond Inc
c/o J H Heunis & Associates MTHATHA
Attorney for the respondent : Ms N. E. Nyobole
c/o Voyi-Nyobole Attorneys
MTHATHA
31/01/12
CASE NO: 340/12
In the
matter between:
THANDISWA
J. HEADBUSH Applicant
and
KUTLOANA
HEADBUSH First Respondent
STANDARD
BANK OF SOUTH AFRICA
LIMITED
Second Respondent
________________________________________________________________________
FOR THE
APPLICANT :
FOR THE
RESPONDENTS: