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2024
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[2024] ZAECELLC 26
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Standard Bank of South Africa Limited v Tungata (EL1863/2023) [2024] ZAECELLC 26 (7 May 2024)
NOT REPORTABLE
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE
DIVISION, EAST LONDON CIRCUIT COURT)
CASE NO:
EL1863/2023
In the matter between
STANDARD BANK OF SOUTH
AFRICA
LIMITED
Plaintiff
and
BATANDWA
TUNGATA
Defendant
JUDGMENT IN RESPECT OF
SUMMARY JUDGMENT
APPLICATION
HARTLE J
[1]
At
the crux of a summary judgment application is a dispute between the
parties concerning whether the plaintiff properly complied
with the
provisions of section 129 read with section 130 of the National
Credit Act No. 34 of 2005 (“
NCA
”)
[1]
in respect of the default notice relied upon by it as the
jurisdictional basis to have approached this court to enforce the
defendant’s
credit agreement with it.
[2]
The defendant asserts in opposition to the
plaintiff’s application for summary judgment that after receipt
of the default
notice relied upon by the plaintiff, he entered into a
payment plan or agreement in terms of which he agreed to settle the
outstanding
arrears referenced in the section 129 notice within a
period of six months, effective from 6 November 2023, “
until
the arrears would be settled
”
(“
the settlement plan
”).
[3]
The settlement plan was self-evidently
concluded after the dispatch of the default notice to him by email on
6 October 2023.
There is no question that he received the
notice or indeed that he responded to it in a manner which section
129 envisages by its
ambit, read together with section 130 of the
NCA.
[4]
In the defendant’s submission it was
an implied term of the settlement plan that the further exercise of
his statutory rights
emanating from section 129 would be “
suspended
”
until either breach of such settlement plan or performance in terms
thereof.
[5]
The settlement plan notwithstanding, the
plaintiff purported to cancel the instalment sale agreement on 6
November 2023 and instituted
summons against the defendant, basing
its entitlement to enforce the original credit agreement on the
allegation that the 6 October
2023 default notice sent to him
constituted compliance with the provisions of section 129 and that it
had further complied with
the provisions of section 130 of the NCA
thereanent.
[6]
In its particulars of claim the plaintiff
states in clear terms that the default notice dated 6 October 2023 is
the notice that
it relies upon to contend that it has complied with
the requisite provisions of section 129 (1), as read with section
130, of the
NCA.
[7]
It also alleges in paragraph 25 of its
particulars of claim, co-incidentally in line with the defendant’s
opposition - except
that it claims he did not furnish its attorneys
with his
written payment arrangement
,
that:
“
Prior
to proceeding with legal action, the Plaintiff’s attorneys
informed the Defendant of the arrears on 06 OCTOBER 2023
and afforded
Defendant 6 months to settle the arrears and also requested Defendant
to furnish the Plaintiff’s attorneys with
his written payment
arrangements which Defendant has failed to do.”
[8]
What the plaintiff also asserts in the
particulars of claim (at paragraph 24.4), in contradiction to the
averment in paragraph 25,
is that the defendant has “
not
responded to the Default Notice by contacting the Plaintiff’s
attorneys
”.
[9]
In the founding affidavit filed in support
of the summary judgment application it appears that the plaintiff’s
attorneys belatedly,
in an email dated 1 February 2024, confirmed the
settlement plan in essence, but requested from the defendant’s
attorneys
his “
written payment
proposal in settlement of the arrears within five business days
”,
alternatively directed him to file his plea. Evidently the
“
shameless and bogus Plea
”
(sic), in which the defendant asserts that the plaintiff failed to
properly comply with the provisions of section 129 of
the NCA, was
the impetus for the present application.
[10]
Despite the fact that the defendant has
self-evidently not complied with his settlement plan, the question
still arises whether
the prior notice given under the provisions of
section 129 (1) is adequate for purposes of the present summary
judgment application.
[11]
In
Dwenga
v First National Bank & Others,
[2]
although in a different context where the arrears foreshadowed by the
default notice had in fact been brought up to date
by the time of the
issue of the summons (here the defendant suggests that a lump sum was
to have been paid and that that payment
is yet to materialize), I
ruled that the notice in
Dwenga
no longer had any efficacy and that a fresh notice had to have been
issued in order for the plaintiff to have complied with the
provisions of section 129 of the NCA.
[3]
I illustrated further, with reference to
Starita
(aka Van Jaarsveld) v ABSA Bank Ltd & another
,
[4]
that there is no time period specified in the NCA for the continued
validity of a section 129 notice, nor can one be implied.
Its
ongoing validity depends on the facts of each case.
[12]
In this instance the defendant contends
that the default notice “
lapsed
”
and that there ought to have been a further notice in terms of
section 129 issued to him once there was a breach of the
agreed upon
plan.
[13]
Whilst I am less inclined to accept the
defendant’s argument that the settlement plan following upon
receipt of the notice
novated the original credit agreement, there is
indeed merit in the submission made on his behalf that the peculiar
situation that
pertained here (reinforced by the vague and confusing
manner in which the plaintiff has alleged compliance with the
requisite provision
of section 129, read with section 130, of the
NCA), required a re-issue of a default notice, not in respect of his
evident breach
of the settlement plan, but adverting to the
defendant’s being in default under the credit agreement and
inviting him once
again to exercise the rights that avail him under
section 129.
[14]
I take the defendant’s submission
that the plaintiff’s allegation in the particulars of claim
that at the time of the
issue of the summons he had not responded to
the default notice by contacting the plaintiff’s attorneys was
simply not correct.
Instead he had explored a non-litigious way
to purge his default, even if he failed to honour that plan.
[15]
In the result I am inclined to agree with
Mr. Meyers’ submission on his behalf that the issue of the
summons was premature
in this instance, in relation to the section
129 notice relied upon, and that there was not proper compliance with
the provisions
of section 130 of the NCA thereanent, which precludes
legal enforcement of a debt before the provisions of section 130 can
be said
to have been met.
[16]
In this instance section 130 (4) of the NCA
provides the appropriate remedy.
[17]
In the result, I issue the following order:
1.
The application for summary judgment is
dismissed.
2.
The defendant is granted leave to defend
the action.
3.
The action proceedings in this matter are
stayed until ten (10) business days after the plaintiff, in due
compliance with the provisions
of
section 129
and
130
of the
National
Credit Act, No. 34 of 2005
, has served a notice as contemplated in
section 129
(1)(a) of the NCA.
4.
The costs of the application are in the
cause.
B HARTLE
JUDGE OF THE HIGH
COURT
DATE OF
HEARING
:
16 May 2024
DATE OF
JUDGMENT
:
17 May 2024
Appearances:
For the plaintiff:
Ms. S Mashiya instructed by Squires Inc., East London (ref. Mr.
Kerr).
For the defendant: Mr.
E Meyers instructed by Makhanya Attorneys, East London (ref. Mr.
Makhanya).
[1]
The
objective of a notice is to advise the consumer of his default under
a credit agreement and to give him/her an opportunity
to consider
what steps to take thereanent. It provides protection to
credit consumers by requiring that a notice of default
be given
BEFORE
enforcing the credit agreement in a court.
[2]
EL
298/11, ECD 29811) [2011] ZAECELLC 13 (20 November 2011).
[3]
At
page 33.
[4]
2010
(3) SA 443
(GSJ) at paragraph [10].