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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case number: A103 /2024
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHERS JUDGES: NO
(3) REVISED
.21 January 2025
In the matter between:
FIRSTRAND BAN K LIMITED APPLICANT
And
LLEWELLYN GEORGE REINEKE 1ST RESPONENT
ILANA REINEKE 2nd RESPONDENT
JUDGMENT
___________________________________________________________________
MOTHA J
[1] Serving before us is an appeal whose grounds have been succinctly distilled
and crystalized into three distinct complaints , namely : first, that the court a
quo erred in finding that the app ellant’ application was defective ; second, the
court a quo erred in finding that the app ellant had not complied with the
National Credit Act , 34 of 2005 (NCA ), and finally , costs.
The parties
[2] The appellant is Firstrand Bank Limited , a registered commercial bank
incorporated in terms of the banking and company laws of the Republic of
South Africa and a registered credit provider in terms of section 40 of the
national Credit Act 34 of 2005 (NCA ).
[3] The first and second respondents are Llewellyn George Reinecke , an adult
male , and Ilana Reinecke , an adult female .
A Summation of the facts
[4] The appellant and the respondents concluded a written single facility regular
amortizing agreement under account number 6[...].
[5] As security for the indebtedness arising from the agreement , the first
respondent registered a first covering mortgage bond in favor of the app ellant
over the immovable property known as :
(i)Section No. 33 as shown and more fully described on Sectional Plan No.
SS 18/1997 , in the scheme known as Castle Garden s in respect of the land
and building or building s situated at E[...] Ext […] Township Local Authority :
City of Tshwane M etropolitan Municipality , measuring 55 (fifty-five) square
metres; and
(ii) An undivided share in the common property in the Scheme apportioned to
the said section in accordance with the participation quota as endorsed on the
said S ectional Plan held by deed of transfer number ST9232 1/ 2006 subject
to such conditions as set out in the aforesaid deed for an amount of R800,000
(Eight Hundred Thousand Rand) .
[6] As security for the indebtedness arising from the agreement the first and
second respondents also registered a first and second continuing covering
mortgage bond in favour of the appellant over the immovable property known
as
A unit consisting of -
(i) Section No. 1 as shown in more fully described on Sectional Plan
NO. SS 196/1981, in the Scheme known as Atrium in respect of the land and
building or buildings situated at Erf 4[...] C[...] P[...] Township Local Authority
City of Tshwane Metropolitan Municipality measuring 172 (One Hundred and
Seventy -Two) square metres ; and
(ii) An undivided share in the common property in the scheme apportioned to
the third section in accordance with the participation quota as endorsed on the
3rd sectional plan held by deed of transfer number St. 623102021 subject to
such conditions as set out in the afores aid deed for the amount of R920,000
and R1,146,000 .
[7] Following the respondents’ default in complying with the terms of the parties ’
agreement, the app ellant launched this application to claim the payment of the
amount due and further relief .
Issues
[8] As already hinted in the prologue there are three issues to this appeal. The
first objection , that the appellant’s application is defective , rotates around two
axes , namely : the alleged defective Notice of Motion (NOM) and the role of a
Certificate of Balance (COB ).
[9] With regards to the N OM, the gist of the complaint is that the app ellant used
the incorrect form of Notice of Motion by using the usual , long form Notice of
Motion prescribed by Rule 6 , namely : Form 2 ( a) instead of Form 2A , as
prescribed by Rule 46A. Ignoring Rule 46A, the argument goes, the app ellant
did not state the date on which the application was to be heard nor informed
the respondents that if they intended to oppose the application or make
submissions to the court , they had to do so on affidavit within 10 days of
service of the application and appear in court on the date on which the
application is to be heard. Thus, the applicant contravened Rule 6(5)(b)(iii) ,
which reads:
“set forth a day , not less than 10 days after service thereof on the respondent ,
on or before before which such respondent is required to notify the applicant ,
in writing , whether respondent intends to oppose such application , and shall
further state that if no such notification is given the application would be set
down for hearing on a stated day, not being less than 10 days after service on
the respondent of the said notice .”
[10] The application was subsequently opposed, and the unopposed date
fell by the way -side. A notice of set down was served on the respondent s.
Since both parties were before court, having filed all their affidavits, and the
matter was fully ventilated , we are of the opinion that this issue need not
detain us , otherwise, that would be tantamount to elevat ing form over
substance. Whilst mindful of the importance of Rule 27(3) , especially the need
to bring a condonation application, in view of the circumstances of th is matter
and on this point alone, we conclude d that it was a misdirection to dismiss the
matter. We hasten to add that , lest we get misunderstood, there are occasions
when this issue would be decisive , especially in unopposed eviction matters ,
as aptly captured in the matter s of Meme -Akpta v Unlawful Occupiers of 44
Nugget Street (handed down on 26 June 2022) and Mashaba v Judicial
Commission of Inquiry into Allegations of the State Capture , Corruption and
Fraud in The Public Sector, including Organs of State and Others .1 This,
however, is not such a case . We are of the view that the court a quo
misdirected itself in this regard .
[11] As far a s the COB is concerned, the respondents submitted that a COB
was not evidence nor c onclusive proof of indebtedness, and referred t he court
to the matter of Thrupp Investment s Holdings (Pty) Ltd v Goldrick2 where the
court held :
“As regards the effect of the absence of a certificate of balance -clause in the
suretyship counsel for the appellant submitted that a proper interpretation of
the certificate of indebtedness -clause contained in the lease agreement leads
one to conclude that the production of such a certificate in fact established the
liability of the lessee for the amount certified, which in turn was sufficient to
1 (1426 /21) ZAGPPHC 586 ( 16 August 2022)
2 (A5027/05) ZAGPPHC23 ;2008(2)SA 253(W) March 2007
constitute prima facie proof of the liability of the sureties. The argument in my
view is flawed in its premise. A certificate -clause, it has been held in a number
of cases, is designed to facilitate proof of the amount of liability (See Nedbank
Ltd v Abstein Distributors (Pty) Ltd and Others 1989 (3) SA 750 (T); Bank of
Lisbon International Ltd v Venter en ‘n Ander 1990 (4) SA 463 (A) at 478 E).
The certificate therefore is merely an evidentiary tool provided for in an
agreement by one contracting party to the other to facilitate proof of the
amount of indebtedness. It does not in itself establish liability. ”
[12] On the other hand, the app ellant submitted that a COB is conclusive
proof of indebtedness and relied on the matter of Berlesell (Edms) Bpk v
Lahaer Development Corporation BK en Andere3 which held that a COB is
conclusive proof of the amount of indebted ness and that the defendant had to
rebut that evidence.
[13] Essentially, the part ies’ point of divergence is that the app ellant is of the
view that a COB is conclusive proof of indebtedness, and it is on the
respondent to rebut that evidence. On the contrary , the respondent submitted
that COB is not conclusive but simply prima facie proof of indebtedness and
respondents bear no onus of proving the incorrectness of the amount claimed
by proving what the correct amount is. Having raised their common law right
to dispute the claim using exception errore ca lculi, which the y said the
Minister precluded , amongst others, its waiver from in credit agreements, the
respondent submitted that the onus was on the appellant to prove the
correctness of the claimed amount.
[14] Counsel for the app ellant submitted that the court rever sed the onus
onto the bank to prove the amount set out in the COB. The court corrected
him that it was a rebuttal not an onus. This misnomer seems to have
permeated the papers of the app ellant and became prominent during the
hearing. Hence, the court a quo wrote :
3 1998(3)SA220(CPD)
“According to the respondents , they denied that they were in arrears of the
amount claimed as they did not know whether the amount is claimed as
arrears is correct because they did not receive statements of account for a
long period , which they mentioned specifically in their Answering paper s. And
due to them (Respondents) not admitting the amount, these allegations
cannot be deemed to have been admitted . According to the Respondents , the
Applicant attempted to counter their l atter argument by arguing , in the
Replying papers , that it s COB is conclusive (absolute ) proof of their
indebtedness , and that the onus is on them ( Respondents ) to prove that the
claim amounts are incorrect”
[15] We agree that this conclusion is misguided and therefore not
sustainable . Counsel for the appellant double down on the submission that it
was on the respondents to prov ide statements and proof of payment . He
submitted that there was no evidence before the court placing COB in dispute
or that they did not receive statements . This submission is incorrect, the
respondents pertinently raised the issue of statement at paragraph 35 of the
answering affidavit . They submitted that : “We have not received a statement
from Applicant since 2019 and are not in a position to admit or deny that the
amount being claimed is correct.” Furthermore , at paragraph 50 of the
answering affidavit, they submit ted that payment was made in May 2020, and
the recent payment was on 19 July 2022 .
[16] To us, it appears that the amount clai med was put into question and
cannot find fault with the court a quo’s conclusion . To simply say statements
were sent monthly is not enough , and paragraph 21 of the replying affidavit is
most worrying. In answer to the request for statements , the respondent is told
that: “it is not enough to ask for statements but rather there must be a basis
alleged as to why such statements are necessary.” Finally, counsel for the
appellant’s submission that there was no allegation that they did not receive
statements is totally oblivious of what is stated in the answering affidavit . At
paragraph 33 of the answering affidavit, the respondents state d in no
uncertain terms that they do not accept the amount claimed and asked for the
total breakdown of the arrears claimed.
[17] The second complaint is about the lack of compliance with the NCA.
The app ellant dispatched a s129(1)(a) notice dated 06 Se ptember 2021 . This
letter stated that the respondent’s account was on the said date in excess in
the amount of R 2 145 475, 28 and the appellant demanded payment of the
full outstanding amount in terms of the agreement in the amount of R 2
151 664 - 94. Twice in the founding affidavit and again in the replying affidavit ,
the app ellant stated that at 31 March 20 21 the arrears in respect of the
agreement were R 267 583.54. The respondents argued that the s 129(1) (a)
NCA notice reflected an incorrect arrears amount , thus contr avening the
provisions of th e NCA . To add insult to injury , the appellant’s letter of demand,
dated 5 October 2020, recorded that the arrears on the loan facility was
R70 412.48 . It was impossible that eleven months later, the respondents
owed R 2 145 475-28, which is a far cry from the R70 412.48. Even if we are
wrong on the COB, the failure to comply with the NCA is so egregious that on
this point alone the matter should have been dismissed.
[18] Perhaps, it is the correct time to examine this notice. The NCA s 129
(1) reads:
“If the consumer is in default under a credit agreement, the credit provider -
(a) may draw the default to the notice of the consumer in writing and propose
that the consumer refer the credit agreement to a debt counsellor,
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
(b) subject to section 130(2), may not commence any legal proceedings to
enforce the agreement before -
(i) first providing notice to the consumer, as contemplated in paragraph (a),
or in section 86(10), as the case may be; and
(ii) meeting any further requirements set out in section 130. ”
[19] Unpacking this section , the court in the matter of Amardien and Others
v Registrar of Deeds and Others4 posed the following question:
“Does section 129(1) require a credit provider to state the amount that is
owed? ”
Simply put, what are the ingredients of a section 129(1) notice? Is it
mandatory to include the amount of arrears in the notice? ”5
[20] In reply to its rhetorical question, the court said:
“Section 129(1) of the NCA refers to a situation where the consumer is
“in default”. Section 129(1)(a) and (b) explain the obligations that the
creditors must fulfil before moving to enforce their debt. The text explicitly
refers to “the default” that must be drawn to the notice of the consumer by the
creditor – and not just the fact that the consumer is “in default”. Read in
conjunction with section 130(4) which provides an opportunity to the debtor to
remedy the default, section 129(1) should be interpreted to include the
amount so that the debtor knows how much to pay to avoid cancellation. The
same applies to the notice under section 19 of the ALA. In addition, in order to
“provid[e] consumers with adequate disclosure of standardised information in
order to make informed choices” they must be informed of the extent of their
arrears in the section 129 NCA notice so as to decide how to move forward
regarding the management of their debt.
It is thus a necessary requirement to specify the amount and nature of the
default in the section 129 NCA notice. As section 129(1) specifically requires
the credit provider to “draw the default to the attention of the consumer” it is
clear that this will only be met if the amount of arrears is specified in the
notice, since the consumer’s attention will not have been drawn to the amount
of the default otherwise. If the basis of the default is that the debtor has fallen
into arrears, it must follow axiomatically that “drawing the default to the
attention of the consumer” entails that the consumer should be advised of the
4 2019 (2) BCLR 193 (CC); 2019 (3) SA 341 (CC) (28 November 2018)
5 Supra para 50 to 51.
amount in arrears. It is only when this has been done that it can be said that
notice of the “default” has been drawn to the attention of the consumer.
If the consumer is not advised of the arrear amount she will be left none the
wiser. The referral by the consumer of the credit agreement to a debt
counsellor, alternative dispute resolution agent, consumer court or ombud
with jurisdiction presupposes that the consumer has been apprised of the
facts to enable her to, amongst others, develop and agree on a plan to bring
the payments under the agreement up to date. One may rhetorically ask: how
is the consumer to agree on a plan to bring payments under the agreement up
to date if she is not notified of the amount in arrears? ”6
[21] Counsel for the app ellant offered no further s ubmissions when the
court pointed out to him that the app ellant was in court because of the default
on monthly payments , and s 129 NCA notice of necessity needed to draw the
attention of the respondents to those arrears. He submitted that the court
should consider utilizing section 130(4)(b) of the NCA, as envisaged in the
matter of Standard Bank of SA v Rock hill.
[22] Considering the binding authorit ies, such as Amardien, First National
Bank Ltd v Lenyanyabedi7and West Bank (a division of First rand Bank Ltd v
6 Supra para 60 to 63
7 [C57115/2009) [2022] ZAGPPHC 3 24 (18 May 2022) Para 21
“careful reading of the papers herein revealed that the applicant might have misconstrued what
defense was raised for in respect of the non -compliance of section 129(1)(a). All what the respondent
raised is that the notice in terms of section 129(1)(a) was defective as it claimed the full outstanding
amount without drawing the default to the attention of the respondents in writing. It is apparent that
section 129(1)(a) send to the respondent is defective thus contravening the provisions of the national
Credit Act as it plays an important role in the applicants cause of action.
[22] in Standard Bank of SA v Rockhill 2010 (5 ) SA 2528 paragraph 17 the court stated that non -
compliance with section 129(1)( a) is an impediment to commencing any legal proceedings to enforce
a credit agreement , it does not constitute a defence in terms of rule 32 ( 3 ) (b). One section 129(1)(a)
established at a trial stage , the proceedings had to be adjourned and the plaintiff be ordered to
complete the steps in compliance with section 129(1)(a).
[24] According to Standard Bank of SA v Rock hill Section 1 30 ( 4 ) (b) of the NCA envisages a
resumption of the proceed ings after the court has ordered that the plaintiff be given an opportunity to
comply and the data to remedy the default and as such non -compliance with section 129 (1 ) ( a)
cannot be deemed to constitute defence in summary judgment application .
[24] Despite the court's decision aforementioned that non -compliance with section 129 ( 1)(a) does not
constitute a defence in summary judgment application the court in Blue Chip 2 (Pty)Ltd v Cedrick
Dean R yneveldtand Others 499/20 15 SCA paragraph three set the following: “ in particular where a
statute provided that before an action can be commenced or a claim enforced against a debtor, a notice be
given then the giving of that notice is essential to the successful pursuit of the claim and proving that it
was given as part of the cause of action.”
Ralushe8, we are of the view that the court a quo correctly found that s 129
NCA notice was not complied with , which must reflect the correct arrears
amount, together with a breakdown of that amount. Additionally, s 130(1)(b) of
the NCA was also violated. This section reads :
“130. (1) Subject to subsection (2), a credit provider may approach the court
for an order to enforce a credit agreement only if, at that time, the consumer is
in default and has been in default under that credit agreement for at least 20
business days and -
(a) at least 10 business days have elapsed since the credit provider delivered
a notice to the consumer as contemplated in section 86(9), or section 129( 1),
as the case may be;
(b) in the case of a notice contemplated in section 129( 1), the consumer has -
(i) not responded to that notice; or
(ii) responded to the notice by rejecting the credit provider’s proposals; and …”
[23] Looking at this section , Jafta J in Nkata v FNB9 s stated :
“Furthermore , this section [129] makes reference to section 130 which
governs the institution of litigation for enforcing credit agreements . Section 29
(1) lays down t he conditions which must be met before the credit provider may
institute litigation . In p eremptory terms, the section declares the legal
proceedings to enforce the agreement may not commence before -
(a) first providing the notice to the consumer ; and
(b) meeting further requirements set out in section 130
[175] in that event , the court could not have granted default judgment because
it would not have been competent for it to do so, in light of the peremptory
language of section 130 (3). That section proclaims that a court may
8 (1149 /2018) [2021] ZAECGHC 78 , 2022 (2 ) SA 626 ( ECG )(31 August 2021) At para 47 “ With great
respect , for the reasons al ready set out, non-compliance which section 129 is not cured by attaching
proof of purport ed compliance with section 129 to a summons , an application for default judgment , or
for summary judgment . With respect , the flaws in that reasoning are the following :
[47.1 ] I have already addressed the limit to statutory interpretation, in that the judiciary should not step
into the legislative terrain. I have to add, with respect, that decisions of the Constitutional Court and
the SCA must be applied by the lower courts . It is not a matter of substance over form to find that non -
compliance with section 129 cannot simply be overlooked and that the court does not have such
discretion .”
9 2016 ( 4) SA 257 (C C)
determine a matter to which the act applies only if the court is satisfied that
there was compliance with section 129. Thus, the exercise of the court's
competence of jurisdiction is deferred until compliance is achieved.”10
[24] It is trite that the court of appeal cannot disturb the decision of the court
of first instance in respect of costs unless there is a misdirection . We cannot
find a misdirection in the decision of the court a quo. Regarding the issue of
costs , the court of appeal would be well advised to take heed of the caution in
latin: fistina lente . The court a quo exercised its true discretion when it
decided on the issue of costs . In the result, the appeal stands to be dismissed
with costs
Order
The appeal is dismissed with costs on scale C
M. P. MOTHA
JUDGE OF THE HIGH COURT, PRETORIA
I concur
N. JANSE VAN NIEWENHUIZEN
JUDGE OF THE HIGH COURT, PRETORIA
I concur
R. FRANCIS -SUBBIAH
JUDGE OF THE HIGH COURT, PRETORIA
Date of hearing: 07 October 2024
Date of judgement: 21 January 2025
10 Supra para 172
APPEARANCES:
For the Applicant Adv. B. D. Stevens instructed by Delberg Attorneys
For the respondent s In person