SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Case No.: 10003/2023
In the matter between:
SA TAXI IMPACT FUND (RF) (PTY) LTD Applicant
and
SIDNEY CLIFFORD JACOBS Respondent
Hearing date: 9 September 2024
JUDGMENT DELIVERED ON 25 SEPTEMBER 2024
___________________________________________________________________
GORDON-TURNER, AJ:
Introduction
1. This is an application for summary judgment brought by a registered credit
provider as defined in Section 40 of the National Credit Act, 34 of 2005 (“ the
NCA”) against a respondent who possesses an operating license permitting
him to operate a taxi on a particular route approved by the taxi association of
which he is a member.
2. The applicant seeks orders confirming the termination of the credit agreement
concluded between the applicant (plaintiff) and respondent (defendant) on
25 April 2022, and return of a certain 2013 Toyota Quantum motor vehicle
(“the Toyota Quantum”) financed in terms of that credit agreement.
3. The applicant raises two defences1, in the alternative to each other:
3.1 That his debt review can be reinstated under section 86(11) of the
NCA, on the basis that the action was brought prematurely and in
contravention of the applicant ’s obligations, as a credit provider, to
engage with the respondent, as its debtor, in good faith with a view to
continuation of the credit relationship; and
3.2 In the altern ative, that the applicant failed to conduct a thorough
assessment regarding his eligibility for the credit facility , a nd that the
Court should declare him over -indebted and make an order
contemplated in section 87 to relieve his over-indebtedness.
The credit agreement
4. The salient terms of the credit agreement are as follows:
4.1 The applicant agreed to finance the purchase of a taxi vehicle for the
respondent, namely the Toyota Quantum;
4.2 After interest of R399 454.45 plus service fees, short -term vehicle
insurance and tracking connection fees over the term of the agreement,
1 He abandoned the point that the applicant did not provide the debt counsellor with the certificate of
balance within the prescribed timeframe.
the total amount payable by the respondent to the applicant was the
sum of R1 032 139.90;
4.3 Monthly instalments were to be paid by the respondent to the applicant
over 77 months commencing on 1 July 2022 , the last instalment being
due on 1 November 2028;
4.4 The monthly repayment by respondent to applicant inclusive of the
finance instalment, cost of insurance and tracking connection fee was
the sum of R13 404.40, and was linked to the prime rate, commencing
at 19,25%;
4.5 Despite delivery of the vehicle to the respondent, ownership of the
vehicle remained vested with the applicant until all amounts
outstanding in terms of the credit agreement had been paid by the
respondent;
4.6 In the event that the respondent failed to pay any instalments on due
date or failed to satisfy any of his other obligations in terms of the
agreement, the applicant, without prejudice to any of its other rights,
was entitled to terminate the agre ement, repossess the vehicle,
dispose of the vehicle in accordance with the provisions of the NCA,
recover from the respondent any remaining settlement value after that
sale as contemplated in Section 127(7) of the NCA, claim interest on
that instalment amount at 19,25% per year calculated from date of
termination of the agreement to date of payment, claim costs on an
attorney / client scale, and claim all expenses incurred in tracing the
respondent before or after the institution of action, attaching the
vehicle, removing it, valuing it, storing it and in relation to the sale of the
vehicle.
Debt review
5. Within eight months of concluding the credit agreement with the applicant, the
respondent applied in terms of Section 86(1) of the NCA to have himself
declared over-indebted. On 15 December 2022, the relevant debt counsellor
delivered to the plaintiff the Form 17.1 notice contemplated in Section
86(4)(b)(i) of the NCA. This was followed on 20 December 2022 by the delivery
of a Form 17.2 by the debt counsellor to the applicant recording that the debt
counsellor had found the respondent to be over -indebted. No evidenc e was
adduced by either party that the debt counsellor had determined that the credit
agreement appears to be reckless.
6. The applicant delivered a certificate of balance to the debt counsellor on
21 December 2022. This indicated a contractual monthly insta lment of
R14 220.29 at an interest rate of 22%.
7. On 4 January 2023, the debt counsellor provided the applicant with a debt
restructuring proposal for repayment of a total of R882 938.46, and that
extended the period of the instalment sale agreement from 1 N ovember 2028
to 15 March 2030, that is, by 17 months. It was made at a time when the
respondent ought to have serviced the first eight monthly instalments , and had
he done so, he would have reduced the total amount repayable by an amount
in the order of R104 000.00. However, on 27 March 2023, he was in arrears
with his instalments in the sum of R 67 574.81. It follows that when he applied
for debt review in December 202 2, he was in arrears, and therefore in default
of the credit agreement. Based on the available figures disclosed in the
papers, the respondent’s proposal necessarily fell short of the total amount
repayable of R1 032 139.90.
8. On 10 March 2023, the applicant responded to the resp ondent’s proposal by
rejecting it and making a counter -proposal. At t hat time, the remaining term
was 68 months. The applicant did not offer an extension of the term, noted that
the current arrears were then R77 547.31 , that the interest rate (as linked to
prime rate) was currently 22,25%, and that the applicant was not prepared to
consider any reduction of the interest rate. The total monthly payment required
in the counter-offer was R17 876.56.
9. The respondent avers that the required instalm ent in terms of the applicant’s
counter-proposal would be R3 656.27 more than the contractual instalment
initially indicated on the certificate of balance, and that this was unaffordable to
him given his monthly nett income of only R12 848.75 (out of a gro ss income
of R14 000.00 per month).
10. On 5 April 2023, the applicant gave notice to the respondent, the debt
counsellor and the National Credit Regulation, in the prescribed manner, of its
election to terminate the debt review in terms of Section 86(10) of t he NCA. By
5 April 2023, neither the respondent nor his debt counsellor had applied for
review in a court or the National Consumer Tribunal as contemplated in terms
of section 86(10)(b) of the NCA 2. It is not disputed that the termination notice
was duly dispatched and received in accordance with the required procedures.
The applicant had thereby given notice to the respondent of the latter’s breach
of the instalment sale agreement and the amount outstanding and due in terms
thereof at that stage. Notice was also given of the applicant’s intention to
terminate the agreement on failure by the applicant to pay the outstanding
sum.
11. By the date of termination by the applicant on 5 April 2023, the respondent had
been in default of the agreement for at least twenty business days, and more
than sixty business days had passed since the date on which the respondent
had applied for debt review . By my calculation, the business days from date of
the d ebt counsellor’s notice in terms of section 86(4)(b)(i) of the NCA on 20
December 2022 expired on 17 March 2023.
12. Upon service of the summons thereafter, the applicant terminated the
agreement. More than ten business days had elapsed since the applicant had
delivered its Section 86(10)(a) notice 3. The respondent does not contend that
2 See footnote 2 for wording of the sub-section.
Even if the debt counsellor had referred the matter to the Magistrates’ Court, the applicant’s right to
give notice in terms of Section 86(10) would continue until the Magistrate made an order as
envisaged in Section 87 of the NCA. See, in this regard, Collett v FirstRand Bank Ltd 2011 (4) SA 508
(SCA) at para [6] and para [14]
3 Section 86(10) of the NCA provides:
the instalment agreement was not lawfully cancelled. The defendant does not
appear to appreciate that upon cancellation, he ceased to have any right to
possess the Toyota Quantum. This is afforded further attention below.
13. The total amount outstanding as at 12 June 2023 was R573 998.51. However,
in this summary judgment application, the applicant claims only the return of
the Toyota Quantum and attorney and client costs.
The respondent’s defences to summary judgment
The primary defence: alleged breach of obligation to negotiate in good faith
14. The respondent alleges that, as required in terms of section 86(5) of the NCA 4,
the applicant failed to negotiate in good faith 5 with the respondent prior to
terminating the debt review process. The basis for this submission is twofold:
14.1 First, the applicant’s counter -proposal took two months, thereby
consuming a considerable portion of the 60 day period wi thin which
debt review may be cancelled by a credit provider in terms of Section
86(10)(a) of the NCA. This left only ten business days for negotiations,
“ (10)(a) 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, at any time at least 60 business
days after the date on which the consumer applied for the debt review, give notice to terminate the
review in the prescribed manner to-
(i) the consumer;
(ii) the debt counsellor; and
(iii) the National Credit Regulator; and
(b) No credit provider may terminate an application for debt review lodged in terms of this Act, if such
application for review has already been filed in a court or in the Tribunal.”
4 Section 86(5) of the NCA provides:
“(5) A consumer who applies to a debt counsellor, and each credit provider contemplated in
subsection (4)(b), must —
(a) comply with any reasonable requests by the debt counsellor to facilitate the evaluation of the
consumer's state of indebtedness and the prospects for responsible debt re -arrangement; and
(b) participate in good faith in the debt review and in any negotiations designed to result in
responsible debt-rearrangement.”
5 As considered in by the SCA in Collett v FirstRand Bank Ltd supra at para [13]:
“Where, as in this case, the consumer has applied for debt review before the credit provider has
proceeded to enforce the credit agreement, the consumer and credit provider are obliged, as s 8 6(5)
requires, not only to comply with any reasonable request by the debt counsellor to facilitate an
evaluation of the consumer's indebtedness and the prospects for responsible debt-restructuring, but
also to participate in good faith in the review and negotiations.”
which the respondent considered insufficient.
14.2 Secondly, the respondent contends that the counter-proposal was
plainly unaffordable to him and (so it was implied) the applicant would
know this.
15. Regarding the alleged tardiness of the applicant’s counter -proposal, there was
still an opportunity for the respondent to respond t o the applicant’s cou nter-
proposal and to maintain negotiations with the applicant prior to the expiry of
the 60 day period , and within the weeks thereafter prior to termination of the
debt review, and it was incumbent upon the respondent to do so. The
applicant’s counter-proposal was made within a reasonable time . The fact that
it was unattractive to the respondent does not mean it was not made in good
faith.
16. Email correspondence (attached to the plea) was addressed by the debt
counsellor to the applic ant on 29 March 2023, which w as admittedly after
expiry of the 60 day period provided in section 86(10 )(a), but prior to the
applicant’s 5 April 2023 notice of termination of th e debt review . T he debt
counsellor advised that the applicant’s counter-proposal was unaffordable as
his income was only R14 000 per month and asked how the matter could be
resolved.
17. This further approach was answered by the applicant on 9 May 2023 with a
new debt restructuring proposal. The applicant required payment of
respondent’s full arrears of R90 000.00 on or before 20 May 2023, but was
prepared to extend the term to 102 months (adding 25 months to the contract),
to fix the interest rate at 22,75%, and to red uce instalments to R13 100.00 per
month commencing on 1 June 2023.
18. The respondent, via his debt counsellor, rejected this second counter -proposal
on 1 June 2023. The applicant made a further counter -proposal on 5 June
2023 requiring an up-front payment of R43 000 on or before 20 June 2023 , to
enable a term extension adding 24 months to the contract, keeping the interest
rate at 2 3,25%, and instalments at R14 410.00 per month commencing on 1
July 2023.
19. To my mind, the applicant’s willingness to entertain a further debt restructuring
proposal, and to respond with improved counter -proposals, with several
elements of compromise, undercuts the respondent’s conten tion that the
applicant did not participate in good faith in the debt review process. The
applicant could not be expected to continue negotiations indefinitely and, as it
were, bid against its prior proposals. The applicant’s obligation, as credit
provider, in terms of section 86(5) of the NCA to “participate in good faith in the
review and in any negotiations designed to result in responsible debt re -
arrangement” had been discharged and the debt review was prop erly
terminated. There is no merit in reinstating the debt review process on the
strength of this unfounded complaint.
20. Even if I am mistaken in this finding , reinstatement of the debt review process
as a defence to a claim by the credit provider is both futile and incompetent ,
and I cannot, therefore, exercise my overriding discretion to refuse summary
judgment. I refer to the unreported judgment of Binns-Ward J in ABSA Bank v
Walker6 in which the learned Judge considered substantially similar facts.
20.1 The defendant in that matter contended that the plaintiff had fallen short
of the obligation on it in terms of the Act to treat with the debtor in good
faith, and was thus prohibited from availing of the right of termination
provided in terms of s 86(10) of the NCA7.
20.2 Binns-Ward J held as follows8 (my underlining):
“[11] The defendant’s submission that the plaintiff was bound to
respond to the debt re -arrangement proposal in good faith is
supported by authority; see Collett v FirstRand Bank Ltd 2011 (4)
6 (2307/14) [2014]ZAWCHC 92 (17 June 2014)
7 Ibid at para [10]
8 Ibid at para [11]
SA 508 (SCA), at para 13 and 15. The judgment in Collett,
however, also makes it clear that a credit provider is entitled,
without qualific ation, to have resort to s 86(10) in any case in
which the consumer is in default of his contractual obligations at
the time he makes application for debt review. The defendant has
not contended that that was not the position in her application for
debt review, or that she was not still in default when the plaintiff
gave notice of termination in terms of s 86(10). The consumer’s
remedy, when a credit provider has terminated a debt review in
circumstances in which it has failed to treat with the consumer’s
debt re-arrangement proposals in good faith, is to apply, in terms
of s 86(11) of the NCA, for a resumption of the debt review, or, in
the context of a summary judgment application, to ask the court,
in the exercise of its overriding discretion, to refuse the application
for summary judgment; see Collett at para 15, 16 and 18. It seems
to me that there would be little purpose served in the exercise of
the court’s discretion in favour of a defendant in a summary
judgment application if the refusal of judgmen t were not attended
by an order directing a resumption of the debt review, either in
terms of s 86(11) or by way of a ‘general review’ in terms of s 85
of the NCA. As the appeal court noted at para 18 of its judgment
in Collett, ‘Of course, sufficient info rmation on which the request
for a resumption of the debt review is based must be placed
before the court.’ ”
20.3 Such limited information as the respondent in this matter has put before
the Court is summarised further below. In my view, it is insufficient.
20.4 Moreover, as in Absa Bank v Walker9, the respondent’s proposal:
20.4.1 Envisages his retaining possession of the Toyota Quantum,
which partially negates the applicant’s right of security in that
9 Ibid at paras [12] & [13]
asset, and due to the effect of depreciation would reduce the
value provided by the security in the asset during the
extended period (a facet that the applicant was prepared, in
its second proposal, to tolerate provided the arrears were
immediately extinguished);
20.4.2 Facilitates his ability as a purchaser of the Toyota Quantum
in terms of an instalment agreement to keep and use the
vehicle on more favourable terms of payment which is not
the purpose of debt restructuring – the goal should be to fulfil
his financial obligations10;
20.4.3 Expects a resumption of the debt review with the object of
obliging the applicant to accept the proposed debt
rearrangement, which would negate the right of cancellation
conferred upon, and exercised by, the applicant in terms of
s 123(2) of the NCA, without regard to the fact that upon the
cancellation of the agreement, the respondent ceased to
have any right to possess the vehicle.
21. The debt restructuring proposal made on behalf of the defendant plainly
contemplated that he would retain possession of the Toyota Quantum.
However, the credit agreement has been validly cancelled , and the defendant
no longer enjoys the right to retain the vehicle.
22. The Court enjoys no power 11 to reinstate the cancelled agreement, or to order
a resumption of the debt review under section 86(11) of the NCA.
10 See, as cited by Binns-Ward J:
Standard Bank of South Africa Ltd v Panayiotts 2009 (3) SA 363 (W) at para 77;
SA Taxi Securitisation (Pty) Ltd v Mbatha and Two Similar Cases 2011 (1) SA 310 (GSJ) at para 35 -
36 and 46-50;
Pelzer v Nedbank Ltd 2011 (4) SA 388 (GNP), at para 6.3-6.4;
Standard Bank of South Africa Ltd v Newman [2011] ZAWCHC 91, at para 11;
Absa Bank Ltd v O’Connor [2012] ZAWCHC 152 at para 3;
Nedbank Ltd v Jaars [2012] ZAWCHC 270, at para 22-23;
SA Taxi Securitisation (Pty) Ltd v Melaphi [2014] ZAWCHC 47, at para 11
11 ABSA Bank v Walker supra at para [16]
The secondary defence: declaration of reckless credit
23. The point of departure is the definition of reckless credit set out in the NCA
which is as follows:
“80 Reckless credit
(1) A credit agreement is reckless if, at the time that the agreement was made ,
or at the time when the amount approved in terms of the agreement is
increased, other than an increase in terms of section 119 (4)-
(a) the credit provider failed to conduct an assessment as required by
section 81 (2), irrespective of what the outcome of such an assessment might
have concluded at the time; or
(b) the credit provider, having conducted an assessment as required by
section 81 (2), entered into the credit agr eement with the consumer despite the
fact that the preponderance of information available to the credit provider
indicated that-
(i) the consumer did not generally understand or appreciate the consumer's
risks, costs or obligations under the proposed credit agreement; or
(ii) entering into that credit agreement would make the consumer over -
indebted.
(2) When a determination is to be made whether a credit agreement is reckless
or not, the person making that determination must apply the criteria set out in
subsection (1) as they existed at the time the agreement was made , and
without regard for the ability of the consumer to-
(a) meet the obligations under that credit agreement; or
(b) understand or appreciate the risks, costs and obligations under the
proposed credit agreement, at the time the determination is being made.”
(my underlining)
24. In his plea, the respondent claims an order on terms of sections 83(1) and
83(2) of the NCA declaring the credit agreement to be reckless and making an
order in terms of section 83(3) of the NCA. The contention of reckless credit
was not explained in the plea. In his opposing affidavit, the respondent did not
limit himself to an order under section 83(3) only, expanding his defence so as
to ask for an order “as set out in section 83 of [the NCA]”.
25. The relevant sections provide:
“83 Declaration of reckless credit agreement
(1) Despite any provision of law or agreement to the contrary, in any court or
Tribunal proceedings in which a credit agreement is being considered, the
court or Tribunal, as the case may be, may declare that the credit
agreement is reckless, as determined in accordance with this Part.
(2) If a court or Tribunal declares that a credit agreement is reckless in terms of
section 80 (1) (a) or 80 (1) (b) (i), the court or Tribunal, as the case may be,
may make an order-
(a) setting aside all or part of the consumer's rights and obligations under
that agreement , as the court determines j ust and reasonable in the
circumstances; or
(b) suspending the force and effect of that credit agreement in accordance
with subsection (3) (b) (i).
(3) If a court or Tribunal, as the case may be, declares that a credit agreement
is reckless in terms of section 80 (1) (b) (ii), the court or Tribunal, as the
case may be-
(a) must further consider whether the consumer is over -indebted at the time
of those proceedings; and
(b) if the court or Tribunal, as the case may be, concludes that the consumer
is over-indebted, the said court or Tribunal may make an order-
(i) suspending the force and effect of that credit agreement until a date
determined by the Court when making the order of suspension; and
(ii) restructuring the consumer's obligations under any other credit
agreements, in accordance with section 87.”
(my underlining)
26. The defendant’s plea was accordingly predicated on the Court finding that
entering into the credit agreement would make the respondent over -indebted.
If so found, the Court would be obliged to determine whether the consumer is
over-indebted at the time of the proceedings, in which event the Court could
suspend the force and effe ct of the credit agreement , and restructure the
respondent’s obligations under any other credit agreements.
27. In his opposing affidavit the respondent tacked to the position that his (current)
monthly net income is less than the contractual monthly instalment “therefore,
the [the applicant] did not comply with the onus placed on it to do a diligent
affordability assessment in respect of my financial capabilities , and that the
loan was advanced recklessly.”
28. The respondent has conflated his current position with that represented by him
to the applicant at time of assessing his credit application – this is both illogical
and in conflict with the provisions of section 80(2) of the NCA , resulting in the
above flawed conclusion.
29. Furthermore, t he respondent has disregarded the fact that the credit
agreement is cancelled. That necessarily precludes the grant of an order
suspending the force and effect of that credit agreement as contemplated by
sections 83(2)(b) and 83 (3)(b)(i) of the NCA (as well as precluding
consequential restructuring of the de bt under section 83(3)(b)(ii)) . Even if
suspension of the credit agreement was a competent solution, all elements of
the agreement would be suspended , so the respondent would not be entit led
to continue to retain possession of the Toyota Quantum during the period of
suspension12, and he would not be obliged to make payments during that
period.
30. That leaves the respondent , should a declaration of reckless credit be
indicated, with the possible remedy under section 83(2)(a), of setting aside all
or part of the consumer's rights and obligations under th e credit agreement (to
the extent that this is competent in respect of a cancelled agreement ). For the
respondent, this remedy is self-defeating: his right to retain possession of the
Toyota Quantum vehicle would be set aside in such circumstances , the
applicant would be en titled to restoration of the vehicle 13, and the respondent
would be relieved of any further indebtedness or deficiency claim under the
agreement.
31. The respondent’s case is predicated upon his retention of the Toyota Quantum
and continued operation of his taxi business. As Levenberg AJ has held14:
“[46] If the consu mer obtained possession and use of a motor vehicle in
circumstances in which no credit should have been extended to the consumer,
it would be fundamentally unfair and counterproductive for the consumer to
continue to use the vehicle , while at the same time not making any payments
under the agreement.
…
[50] That the NCA does not contemplate the consumer retaining ‘the money
and the box’ is also borne out by the provisions of s 130(1) of the NCA . That
12 SA Taxi Securitisation (Pty) Ltd v Mbatha and two similar cases 2011 (1) SA 310 (GSJ) at para [48]
13 Ibid at para [47]
14 Ibid at para [46] & para [50]
section provides that the failure of a consumer to surrender its security is a
factor that militates in favour of immediate enforcement of the credit agreement
by the credit provider.”
32. Hence, the respondent’s claim to an order under section 83(2)(a) does not
present a bona fide defence to the relief sought in this application.
33. This is all the clearer once the evidence regarding alleged reckless credit is
considered. He is required, for purposes of summary judgment , to set out the
material facts, which if proved at trial, would sustain his defences, and to do so
with a reasonable amount of verificatory detail15 - bearing in mind also that the
respondent bears the onus to prove reckless credit16.
34. The respondent contends that the applicant did not comply with the
requirements pertaining to reckless credit , as determined in section 81(2) and
(3) of the NCA. Those sections provide:
“(2) A credit provider must not enter into a credit agreement without first
taking reasonable steps to assess-
(a) the proposed consumer's-
(i) general understanding and appreciation of the risks and costs of the
proposed credit, and of the rights and obligations of a consumer under a
credit agreement;
(ii) debt re-payment history as a consumer under credit agreements;
(iii) existing financial means, prospects and obligations; and
15 Ibid at para [25] & [26]
16 Absa Bank Limited v Potgieter (2344/2013) [2017] ZAECPEHC 8 (31 January 2017) at para [43]
(b) whether there is a reasonable basis to conclude that any commercial
purpose may prove to be successful, if the consumer has such a purpose for
applying for that credit agreement.
(3) A credit provider must not enter into a reckless credit agreement with a
prospective consumer.”
35. The respondent submits that his monthly net in come is less than the
contractual monthly instalment “ therefore, the Plaintiff did not comply with the
onus placed u pon it to do a diligent affordability assessment in respect of my
financial capabilities”, and that the loan amount was advanced recklessly.
36. The applicant ( plaintiff) submits that the instalment agreement was not
reckless credit because it used the services of another company in the same
group as the applicant, SA Taxi Development Finance (Pty) Ltd (SA Taxi), to
perform a credit vetting process . Before the credit agreem ent was concluded,
SA Taxi conducted a credit assessment which the applicant submits was as
required by the NCA.
36.1 The assessment revealed that the commercial purpose intended by the
respondent would succeed. In arriving at this conclusion, SA Taxi first
established whether the respondent possessed an operating licence
which permitted him to operate a taxi on the route run by the particular
organisation of which he was and is a member. The respondent
furnished proof of his membership and a copy of his operating licence.
36.2 The respondent was required to complete a so -called ‘taxi route form’
which contains details of the number of daily trips he would make, the
number of passengers to be conveyed on each trip, the fees payable
by those passengers, and, as a product of all those entries the monthly
income he anticipated by the operation of a taxi on that route. The
respondent provided this information on his taxi route form signed on
25 April 2022. H e estimated his monthly income would be R67 320.00
per mo nth and his operational expenses R15 038.50. The applicant
relied on the veracity of this information so provided. The respondent
does not dispute that the applicant advised him that the application fo r
credit would be based on the contents of the taxi route form. He
acknowledged in his opposing affidavit that he did not achieve his
anticipated figures, but contends that this does not mean that this
business has failed.
36.3 SA Taxi undertook its own calculation of the costs associated with the
operation of that route, in cluding petrol and maintenance costs and the
driver’s salary. SA Taxi drew on its own experience as the financi er of
thousands of taxis throughout South Africa, which affor ds it insight into
the average amounts of such expenditures, against which the data
provided by the respondent could be evaluated.
36.4 SA Taxi concluded that , after allowing for the monthly instalments in
terms of the anticipated credit agreement as well as in surance and the
costs of a tracking device, a reasonable prospect exi sted that a taxi
operator, such as the respondent, would derive a profit from the
operation of a taxi on the route. The respondent’s net monthly profit
was estimated to be R52 281.50 per month.
36.5 The respondent was also required to complete and sign a form headed
“Credit Application for Vehicle Finance” . That form was populated with
details of the goods required , the respondent’s personal particulars
(name, residential address , contact details, marital status, occupation,
employer’s name ), his bank account and next of kin details , and his
insurance requirements. It did not , however, provide for the respondent
to disclose details of any debts or other credit agreements to which he
may have been party. It did stipulate that he consented to SA Taxi
checking his credit record with any credit reference agency, that he
declared all current debt repayments by his extended family and
himself as currently being met, and that he confirmed that his current
income exceeds all his monthly expenses17.
37. The respondent is critical of the credit vetting process undertaken by SA Taxi
on behalf of the applicant on the bases that:
37.1 The applicant failed to do a diligent affordability assessment taking into
account his debt repayment history (of which he provided no particulars
either then or in his opposing affidavit ) and his existing financial means
(of which he also provided no particulars);
37.2 The applicant did not take into consideration any further existing
financial obligations such as his monthly household expenses, other
credit obligations that he ‘might have’ or even that he ‘might have to
pay tax’ – again no particulars were provided by the respondent;
37.3 The applicant did not make allowance for repairs and services;
37.4 The taxi route form sets out only ‘anticipated’ figures;
37.5 The taxi route form anticipated 12 daily trips with 15 passengers each,
but in fact only 6 trips daily of 15 passengers each are undertaken for
22 days per month, yielding gross income of only R35 640.00 per
month.
38. The respondent’s last three points of criticism of the credit assessment are
readily met by the fact that the respondent was the source of the information
populated on the taxi route form. The applicant cannot fairly be criticised for
relying on his representations, particularly as he was forewarned about the
importance of the form. In any event, SA Taxi evaluated his information against
the average figures at its disposal as a result of financing thousands of taxi
other vehicles.
17 The respondent was, it seems, not required to provide the particulars contemplated in Section 3 of
Annexure A to the National Credit Regulations Including Affordability Assessment Regulations
published under GN R202 in GG 38557 of 13 March 2015
39. The respondent’s argument that the applicant was insufficiently diligent in
assessing affordability disregards that the applicant was entitled to rely on , or
at the very least, have regard to the respondent’s declarations in his credit
application form . There is no basis to hold that the applicant was under an
obligation to carry out further investigations in order to determine whether the
respondent’s declaration s were indeed true and correct 18. Absent any
particulars being provided by the respondent of his debt repayment history,
and, at the time of applying for credit, of his existing financial means and
financial obligations, it is not possible to gauge if his first two points of criticism
gave rise to reckless credit.
40. The respondent has therefore failed to provide sufficient information to the
Court to enable the Court hold that a declaration of reckless credit is a bona
fide defence, and to exercise its discretion to grant the respondent’s request
for a resumption of the debt review on either of the bases advanced by the
respondent.
41. In the result, the following order is issued:
41.1 Termination of the credit agreement concluded between the parties on
25 April 2022 is confirmed.
41.2 Summary judgment is granted in favour of the plaintiff against the
defendant for delivery up of t he 2013 Toyota Quantum 2.5 D -4D
Sesfikile 16S with engine number 2[…] and chassis number A[…] to
the plaintiff forthwith.
41.3 The defendant shall pay the plaintiff’s costs on the scale as between
attorney and client.
_______________________
18 Absa Bank Limited v Potgieter supra at para [46]
F GORDON-TURNER, AJ
ACTING JUDGE OF THE HIGH COURT
Appearances
Counsel for Applicant/Plaintiff Adv Celest Tait
Instructed by Marie-Lou Bester Inc.
For the Respondent/Defendant Mr Nduli
Legal Aid
Instructed by Steyn Coetzee Inc.