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[2009] ZAFSHC 110
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Standard Bank of South Africa Ltd v Mellet and Another (3846/09) [2009] ZAFSHC 110 (30 October 2009)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 3846/09
In
the
matter
between:-
THE
STANDARD BANK OF SOUTH
AFRICA LTD
Applicant
and
FRANCOIS
MELLET
1
st
Respondent
ANé
SIMONé VICTOR
2
nd
Respondent
_____________________________________________________
CORAM:
H.M.
MUSI, JP
_____________________________________________________
HEARD
ON:
15
OCTOBER 2009
_____________________________________________________
DELIVERED
ON:
30
OCTOBER 2009
_____________________________________________________
JUDGMENT
_____________________________________________________
H.M.
MUSI, JP
[1]
This
is an application for summary judgment in terms of which the
applicant seeks an order for payment of an amount of R587 075.40
together with interest thereon and costs of suit. The claim amount
represents the total of the loans that the respondents owe
to the
applicant under a credit agreement entered into by and between the
respondents jointly, on the one hand, and the applicant,
on the
other, and which were secured by a number of mortgage bonds
registered by the respondents in favour of the applicant over
certain
immovable property of theirs (the property). The applicant also
seeks an order declaring the property executable. The
applicant is
calling up the bonds on the ground that the respondents are in
default with payment of their monthly instalments,
in breach of the
credit agreement. The respondents are opposing the application. I
shall henceforth refer to the applicant as
the plaintiff and the
respondents as the defendants as in the main action.
[2] The
defendants do no dispute that they are indebted to the plaintiff in
the amount claimed or that they had defaulted with their
monthly
instalments. Their defence is set out in the opposing affidavit
filed by the second defendant. Therein she says that
she invoked the
mechanism of the National Credit Act, 34 of 2005, (the NCA) and
applied for debt review in terms of section 86
thereof and that such
application was granted by a magistrateâs court as evidenced by the
relevant order attached the opposing
affidavit. In terms thereof an
arrangement was made pursuant to which she had to pay reduced monthly
instalments. She refers
to the notice issued by the plaintiff on 5
June 2009 in terms of section 86(10) of the NCA purporting to
terminate the debt review
and says that because she did not receive
such notice there has not been proper termination of the debt review.
She also claims
that she could not have received it because no mail
is delivered at Langenhovenpark, where she lives. In a nutshell, her
defence
is that the plaintiff was precluded by the provisions of the
NCA from instituting action to enforce the terms of the credit
agreement.
[3] Mr.
Gilliland, for the plaintiff, contended that the defence raised by
the second defendant is not
bona
fide
and that even if it is found to be
bona
fide
,
it would apply only in respect of the second defendant. In this
regard, counsel pointed out that the first defendant has not
availed
himself of the provisions of the NCA, in that he was no party to the
application for debt review. Counsel contended that
therefore the
first defendant was not covered by the order of re-arrangement of the
obligations under the credit agreement. Regarding
the application
for debt review by the second defendant, Mr. Gilliland submitted that
the notice in terms of section 86(10) terminating
the debt review had
been properly delivered and that the plaintiff was therefore entitled
to institute legal proceedings.
[4] Mr.
Buys, for the defendants, submitted that the plaintiff was precluded
from initiating legal proceedings by virtue of the
provisions of
section 88(3), since a re-arrangement of debt had taken place.
Regarding the notice in terms of section 86(10),
he contended that it
was not a valid notice since it was issued prematurely before the
expiry of the 60 days referred to therein.
He also contended that
the defendants were not in default of payment in terms of the
re-arrangement. He referred to annexures
âVAS2â and âVAS3â
to the opposing affidavit which indicate that the defendants made
various payments to the debt counsellor
for distribution amongst the
creditors.
[5] The
argument that the plaintiff was precluded from instituting action by
virtue of the provisions of section 88(3) has no merit.
This
sub-section is clearly subject to the provisions of section 86(10)
and is not applicable where a notice in terms of the latter
section
has been issued. I now deal with the contentions around the notice
in terms of section 86(10). This section provides
as follows:
â
If a consumer is
in default under a credit agreement that is being reviewed in terms
of this section, the credit provider in respect
of that credit
agreement may give notice to terminate the review in the prescribed
manner to-
(a) the consumer;
(b) the debt counsellor; and
(c) the National Credit Regulator,
at any time at
least 60 business days after the date on which the consumer applied
for the debt review.â
Compliance
with the requirements
of
this provision would entitle the credit provider to proceed with
legal action to enforce its rights under the credit agreement.
[6] The
defendants claim that the plaintiff issued the notice before the
expiry of the 60 days period. It will be noted that the
60 days
period starts to run as from the date on which an application was
made to a debt counsellor in terms of section 86(1).
The defendants
do not know such date but instead seem to rely on the date of the
order made by the magistrateâs court on 29
May 2009. The
plaintiff, on the other hand, says that the 60 days has expired
without reference to any date. The plaintiff goes
on to allege that
the defendants have not disputed its averment on the point. I should
say that the plaintiff is mistaken in this
regard, because par. 9 of
the opposing affidavit pertinently avers that the 60 days period had
not expired.
[7] In
the absence of certainty as to when was the application for debt
review submitted to the debt counsellor, I am unable to
say whether
there has been compliance with the provisions of 86(10). In my view,
the onus to show that there has been compliance
with the relevant
provisions rests on the plaintiff. In the premises it has not been
shown that the requirements of the relevant
section have been
complied with. This triggers the provisions of section 129(1)(b)(i)
and section 130(1)(a), which means that
the institution of action
in
casu
was premature. I must of course make it clear that this finding
applies only to these summary application proceedings and it may
be
that at the trial the plaintiff may prove that the 60 days period had
in fact expired.
[8] There
is another obstacle to the grant of summary judgment. The defendants
aver that they were not in default with the instalments
payable under
the debt re-arrangement and have annexed documents purporting to
evidence the payments made. Mr. Gilliland challenged
the
authenticity of these documents and contended that at best they show
only that payments were made to the debt counsellor.
It should be
noted that a section 86(10) notice can only be issued if the consumer
is in default under a credit agreement that
is being reviewed. Where
there has been a re-arrangement, as
in
casu
,
this can only mean that the consumer must have defaulted with payment
of the instalments payable in terms of the debt re-arrangement.
The
second defendant avers that she has been making the applicable
instalments and the documents annexed to the opposing affidavit
tend
to support this. If this is established at the trial, it will
provide a good defence. Under these circumstances summary
judgment
cannot be granted.
[9] The
proposition that summary judgment could be granted only against the
first defendant by virtue of the fact that he did not
avail himself
of the mechanism of the NCA is untenable. The two defendants are
jointly and severally liable for the debt due to
the plaintiff. If
the one has made arrangements for payment and is paying, the other is
absolved.
A
fortiori
,
where the arrangement to pay has been made in terms of the
ameliorating provisions of the NCA. Besides, the grant of summary
judgment against the first defendant will have the effect of denying
the second defendant the benefits of the debt review and would
defeat
the very purpose and essence of the NCA. And I doubt that there
could be part execution of the jointly owned fixed property.
Finally, I deal hereunder with the contention that there was no
compliance with the requirements of section 86(10) by virtue of
the
fact that there has not been proper delivery of such notice.
[
10] A
reading of sections 129 and 130 of the NCA reveals that where the
circumstances call for the notice in terms of section 86(10)
it is
not necessary to issue a notice in terms of section 129(1). The two
are alternative procedures. The difference between
the two is clear:
A section 129 notice is a prerequisite for the institution of legal
proceedings where no debt review proceedings
have been commenced,
whereas the notice in terms of section 86(10) terminates the debt
review process. However, the same rules
for delivery apply to both
notices.
[11] Now
the defendants allege that they did not receive the notice in terms
of section 86(10) because no mail is delivered at their
place of
residence and to which the relevant notice was posted by registered
post. In
ABSA
BANK LTD v PROCHASKA t/a BIANCA CARA INTERIORS
2009 (2) SA 512
(D&CLD) it was stated that where a consumer has
chosen a
domicilium
in the credit agreement, the notice in terms of section 129 must be
delivered to such address and to no other. In
MATIMUTHU
MUNIEN v BMW FINANCIAL SERVICES (SA) (PTY) LIMITED AND ANOTHER
,
case no. 16103/2008, a judgment of the KwaZulu-Natal High Court,
Durban delivered on 3 April 2009, it was held that it is not
a
requirement of the NCA that the notice in terms of section 129 should
actually be received by the consumer. It suffices that
it has been
sent to the chosen address through any of the modes of delivery set
out in section 65(2), which include registered
post. I agree with
these decisions. In the instant case the notice was sent by
registered post to section 32, Hillcrest, Langenhovenpark,
which is
the address chosen by the defendants in the credit agreement. That
constitutes proper delivery in terms of the NCA.
[12] The
application for summary judgment is dismissed and costs to be costs
in the cause.
___________
_
H.M.
MUSI, J
P
On
behalf
of applicant: Adv. J.G. Gilliland
Instructed
by:
Naudes
BLOEMFONTEIN
On
behalf of
defendants: Adv.
J.J. Buys
Instructed
by:
Cobus
le Roux Inc
BLOEMFONTEIN
/sp