SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
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IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISIO N, CAPE TOWN )
Case number: 2169 /2024
In the matter between:
ABSA BANK LIMITED Plaintiff
and
WILMAR CLAUDIO FRANS Defendant
JUDGMENT DELIVERED ON 28 MARCH 2025
VAN ZYL AJ :
Introductio n
1. This is an opposed application for summary judgment. The underlying action
arises from the defendant ’s breach of a vehicle financing agreement concluded
between the parties under the National Credit Act 34 of 2005 (“the NCA ”). The
plaintiff seeks confirmation of termination of the credit agreement, return of the
2
motor vehicle , and costs pertaining to this portion of the claim.
2. The credit agreement was co ncluded on 2 July 2021. The terms thereof are
not in dispute , and it is common cause that the defendant breached his
obligations thereunder . Monthly instalments were to be paid by the defendant
to the plaintiff over a period of 72 months, commencing on 26 August 2021,
with the last instalment being due on 26 July 2027. The monthly repayment,
inclusive of the finance instalment and cost of insurance, amounted to R3
679.67. Failure to make any payment under the agreement on due date thereof
would amount to an event of default, which would entitle the plaintiff to terminate
the agreement, provided it did so in compliance with the provisions of the NCA.
3. It is common cause that on 25 May 2023 a debt review order1 was granted in
which the defendant ’s contractual obligations towards (amongst other creditors)
the plaintiff were re arranged . The plaintiff instituted action on 31 January 2024
after the defendant had breached the terms of th e debt review order .
4. The defendant raise s two defences to the plaintiff’s claim by way of a special
plea and a plea on the merits :
4.1. First, the defendant argues that, at the time of service of the summons ,
which occurred on 7 February 2024, he was no longer in default of the
debt review order , and for this rea son the plaintiff did not comply with the
provisions of section 88(3) of the NCA . In other words, the plaintiff was
not entitled to institute action against the defendant .
4.2. Second, the defendant contends that the plaintiff is in any event
prohibited by section 86(10)(b) of the NCA from terminating the debt
review process , as the debt review application had already been
determined by the debt review court.
1 In the Mossel Bay Magistrate’s Court under case number 2479/2022.
3
5. The plaintiff submits that it was entitled to proceed in terms of section 88(3) of
the NCA, beca use the defendant had admittedly been in breach of the debt
review order prior to the institution of the action. T he defences accordingly raise
no issue for trial. The defendant does not have a bona fide defence and has
opposed the summary judgment applic ation solely for the purposes of delay.
6. These aspects are discussed below.
The principles applicable to applications for summary judgment
7. The object of Rule 32 is to prevent a plaintiff’s claim, when based upon certain
causes of action, from being delayed by what amounts to an abuse of the
process of the court. The plaintiff is allowed to apply for judgment to be entered
summarily against th e defendant, thus disposing of the matter without putting
the plaintiff to the expense of a trial. The procedure is not intended to shut out
a defendant who can show that there is a triable issue applicable to the claim
as a whole from placing his or her d efence before the court .2
8. Rule 32(3)(b) provides that a defendant in summary judgment proceedings may
“satisfy the court by affidavit …, or with the leave of the court by oral evidence
of such defendant or of any other person who can swear positively to the fact
that the defendant has a bona fide defence to the action; such affidavit or
evidence shall disclose fully the nature and grounds of the defence and the
material facts relied upon therefor ”.
9. In Breitenbach v Fiat SA (Edms) Bpk3 the Court held as f ollows in relation to
the defendant’s affidavit:
2 Majola v Nitro Securitisation 1 (Pty) Ltd 2012 (1) SA 226 (SCA) at 232F –G.
3 1976 (2) SA 226 (T) at 228D -E. Emphasis added.
4
“… no more is called for than this: that the statement of material facts be sufficiently
full to persuade the Court that what the defendant has alleged, if it is proved at the trial,
will constitute a defence to the plaintiff's claim . What I would add, however, is that if
the defence is averred in a manner which appears in all the circumstances to be
needlessly bald, vague or sketchy, that will constitute material for the Court to consider
in relation t o the requirement of bona fides” .
10. The defendant who elects to deliver an affidavit in opposition to a summary
judgment application must thus show that they have a bona fide defence to the
action. They must fully disclose the nature and grounds of the def ence, and
the material facts relied upon and which they genuinely desire and intend to
adduce at trial. The facts should not be inherently and seriously unconvincing
and should, if true, constitute a valid defence.4 A bona fide defence is
accordingly one that is good in law, and that is pleaded with sufficient
particularity.5
11. In considering the amended Rule 32, the Court in Tumileng Trading CC v
National Security and Fire (Pty) Ltd6 held that:
“… Rule 32(3), which regulates what is required from a defe ndant in its opposing
affidavit, has been left substantively unamended in the overhauled procedure. That
means that the test remains what it always was: has the defendant disclosed a bona
fide (ie an apparently genuinely advanced, as distinct from sham) de fence? There is
no indication in the amended rule that the method of determining that has changed.
The classical formulations in Maharaj and Breitenbach v Fiat SA as to what is
expected of a defendant seeking to successfully oppose an application for summa ry
judgment, therefore remain of application. A defendant is not required to show that its
defence is likely to prevail. If a defendant can show that it has a legally cognisable
defence on the face of it, and that the defence is genuine or bona fide, summa ry
4 See Breitenbach supra at 227G -228B; Standard Bank of South Africa v Friedman 1999 (2) SA
456 (C) at 461I -462G.
5 Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A) at 426C -D.
6 2020 (6) SA 624 (WCC) at para [13]. Emphasis added.
5
judgment must be refused. The defendant's prospects of success are irrelevant ”.
12. The word “may” in Rule 32(5) confers a discretion on the Court, so that even if
the defendant’s affidavit does not measure up fully to the requirements of
subrule (3)(b), the Court may nevertheless refuse to grant summary judgment
if it thinks fit .7 The di scretion is not to be exercised capriciously, so as to deprive
a plaintiff of summary judgment when he or she ought to have such relief.8
13. If it is reasonably possible that the plaintiff’s application is defective or that the
defendant has a good defence, the issue must be decided in favour of the
defendant.9 If, on the material before it, the Court sees a reasonable possibility
that an injustice may be done if summary judgment is granted, that is a
sufficient basis on which to exercise its discretion in f avour of the defendant.10
14. In the present matter there is no problem with the manner in which the
defendant’s defences have been pleaded. The issue is whether the defences
are good in law.
The debt review order
15. The defendant’s compliance with (or breach of) the debt review order takes
centre stage in this application. It is common cause that t he history of the
defendant’s debt review process is as follows.
16. The defendant applied to a debt counsellor for debt review in terms of section
86(1) of the NCA.11 On 1 May 2022, the debt counsellor delivered to the plaintiff
the required notice as contemplated in section 86(4)( b)(ii)12 of the NCA. At the
7 First National Bank of South Africa Ltd v Myburgh 2002 (4) SA 176 (C) at 180D –E.
8 Jili v Firstrand Bank Ltd 2015 (3) SA 586 (SCA) at para [13] .
9 Arend v Astra Furnishers (Pty) Ltd 1974 (1) SA 298 (C) at 305C -F.
10 First National Bank of South Africa Ltd v Myburgh supra at 184H.
11 “86(1) A consumer may apply to a debt counsellor in the prescribed manner and form to have
the consumer declared over -indebted. ”
12 “86(4) On receipt of an application in terms of subsection (1), a debt counsellor must -
6
time, the defendant was in arrears with his payments under the credit
agreement in the amount of R11 283 ,39.
17. On 6 February 2023 the plaintiff accepted a debt rearrangement propos al which
had been submitted by the debt counsellor on 31 January 2023. It was
accepted and agreed that the monthly instalment due to the plaintiff under the
credit agreement would be reduced to R2 892 ,00 per month over a period of
100 months , payable on the 25th day of each month.
18. On 25 May 2023 the debt review court granted a debt review order declaring
the defendant overindebted, rearrang ing the defendant's obligations to the
plaintiff in accordance with the accepted p roposal, and order ing the defendant
to pay a total monthly amount of R3 343 ,93 directly to the so-called Payment
Distribution Agency for distribution to the relevant credit ors, including the
plaintiff. The defendant was ordered to make his first payment under the debt
review order on 7 June 2023.
19. The defendant breached the terms of the debt review order in relation to the
plaintiff by failing to pay the full monthly instalment due to the plaintiff in terms
thereof. Counsel for the defendant conceded that the defendant made
“sporadic and sometimes short payments ” of the instalments required by the
debt review order. No payments were made for the months of June 2023 and
October 2023. The defendant admits this. It appears from the Payment
Distribution Agency’s statement of acco unt that the defendant consistently
underpaid the agency over the period May 2023 to January 2024 although, as
shall be set out below, he made two payments per month in July 2023 and in
December 2023 respectively.
(a) provide the consumer with proof of receipt of the application;
(b) notify, in the prescribed manner and form -
(i) all credit providers that are listed in the application; and
(ii) every registered credit bureau. ”
7
20. In terms of the debt review order, as read with the plaintiff's letter of acceptance
of the rearrangement proposal, the defendant had to pay a monthly instalment
of R2 892, 00 to the plaintiff. From when the debt review order w as granted until
31 January 2024, when summons was issued, 8 instalments had been due and
payable, namely:
7 June 2023 R 2 892,00
7 July 2023 R 2 892,00
. 7 August 2023 R 2 892,00
. 7 September 2023 R 2 892,00
7 October 2023 R 2 892,00
. 7 November 2023 R 2 892,00
. 7 December 2023 R 2 892,00
. 7 January 2024 R 2 892,00
R23 136,00
21. In the same period, the defendant made payments as follows:
. 26 May 2023 R 2 338,92
. 12 July 2023 R 2 164,79
. 1 August 2023 R 2 373,20
. 29 August 2023 R 2 342,30
. 27 September 2023 R 2 897,24
. 6 November 2023 R 2 897,24'
. 5 December 2023 R 2 897,24
28 December 2023 R 2 897,24
31 January 2024 R 2 811,07
8
R23 619,23
22. By 29 January 2024, the arrears on the defendant's account with the plaintiff
had escalated to R47 083,89, and the full outstanding balance amounted to
R188 798,67.13
23. Summons was issued on 31 January 2024. On that day, the defendant (via the
Payment Distribution A gency) paid a sum of R2 881,07 to the plaintiff, which
resulted in the paying up of the arrears under the debt review order.14
24. In calculating (on the papers) the amounts that have been paid to the plaintiff
since the grant of the debt review order, the defendant erroneously included a
payment allegedly made on 5 September 2023 in the amount of R2 348.79. No
such payment was in fact made to the plaintiff - this much is clear from the
statement of account. The total amount paid to the plaintiff under the debt
review order is thus R23 619,24 (not R25 968,53 as set out in th e papers ), as
opposed to the R23 136,00 that was due. Be that as it may, the defendant’s
contention still holds true, namely that he was not in arrear s under the debt
review order at the time when the summons was served on him on 7 February
2024. Whether this assists him in resisting summary judgment is dealt with
below.
Default under the debt review order : was the plaintiff entitled to institute action?
25. It is convenient to deal with the defendant’s defences together, as they are
interlinked. As indicated, t he defendant admits that he breached the terms of
the debt review order over the months preceding the institution of the action.
13 The plaintiff’s counsel handed up an updated certificate of balance, dated 19 March 2025. The
arrears are currently R96 162,78, with a total outstanding balance of R195 033,46. The last
payment that had been made was R592,00 on 28 February 2025.
14 Prior to the payment on 31 January 2024 the defendant had paid R20 738,17 in total over the
preceding months . He was thus still in arrears on the day that summons was issued, but settled
the arrears on that day.
9
He claims, however, that upon service of the summons in February 2024 he
was no longer in default , because he had in fact paid more than what was
required under the debt rearrangement up to that date . As a result, so the
defendant argues , the plaintiff was not entitled to enforce the credit agreement
under section 88(3) of the NCA by instituting action .
26. The defendant contends, i n addition, that the plaintiff is prohibited by section
86(10)(b) of the NCA from terminating the debt review process in relation to the
credit agreement , as his debt review application had already been filed in (and
determined by) the debt review court. Counsel for the defendant did not press
this contention during argument, but I shall nevertheless deal with it briefly, as
it was pertinently raised on the pleadings in the action.
Termination of the debt re arrangement under section 88(3) of the NCA
27. Section 88(3) of the NCA reads as follows :15
“(3) Subject to section 86(9) and (10), a credit provider who receives notice of court
proceedings contemplated in section 83 or 85, or notice in terms of section
86(4) (b) (i), may not exercise or enforce by litigation or other judicial process
any right or security under that credit agreement until -
(a) the consumer is in default under the credit agreement; and
(b) one of the following has occurred:
(i) An event contemplated in subsection (1) (a) through (c);16 or
15 Emphasis supplied.
16 “88(1) A consumer who has filed an application in terms of section 86(1), or who has alleged in
court that the consumer is over -indebted, must not incur any further charges under a credit
facility or enter into any further credit agreement, other than a consolidation agreement , with
any credit provider until one of the following events has occurred:
(a) The debt counsellor rejects the application and the prescribed time period for direct filing in
terms of section 86(9) has expired without the consumer having so applied;
(b) the court has determined that the consumer is not over -indebted, or has rejected a debt
counsellor's proposal or the consumer's application; or
(c) the court having made an order or the consumer and credit providers having made an
agreement re -arranging the consumer's o bligations, all the consumer's obligations under
the credit agreements as re -arranged are fulfilled, unless the consumer fulfilled the
obligations by way of a consolidation agreement. ”
10
(ii) the consumer defaults on any obligation in terms of a re -
arrangement agreed between the consumer and credit
providers , or ordered by a court or the Tribunal. ”
28. The interpretation and implications of section 88(3) have been discussed in
various cases over the years. I refer to the pertinent ones below. These include
two cases in this Division, with different outcomes – an aspect upon which the
defendant relies in support of his conten tion that he has a bona fide defence.
29. In FirstRand Bank Limited v Fillis and another,17 a decision of the Eastern Cape
Division, Port Elizabeth (as it then was) delivered on 17 August 2010, the Court
held that once the jurisdictional requirement set out i n section 88(3)(a) co -exists
with any one of the jurisdictional requirements set out in section 88(3)(b), it
follows as a matter of interpretation that the credit provider is entitled to proceed
with the enforcement of its rights under the credit agreement . This may be done
without further notice to the defendant . The restraint placed upon a credit
provider as a result of a credit review process and a rearrangement order in
terms of section 86(7) of the N CA falls away on the express authority of section
88(3).18 The Court remarked that this interpretation accorded, too, with the
provisions of section 129(2)19 of the NCA. As observed in Fillis:20
"The Act provides very extensive protection to a consumer who has become over -
indebted , whether it be of his or her own making or through circumstances beyond his
or her control. Not only does a re -arrangement afford him or her alleviation from the
onerous monthly obligations that he or she has in all seriousness undertaken to his or
her cr edit providers, but he or she also enjoys the protection of section 103(5) against
17 2010 (6) SA 565 (ECP) at paras [15], [16] , and [18] .
18 See also FirstRand Bank Ltd v Kona and another 2015 (5) SA 237 (SCA) , in which Fillis was
cited with approval: “[18] The moratorium is lifted by operation of law — and accordingly without
the need to have the debt re -arrangement order set aside — once the consumer is in default
of the relevant credit agreement and is in default of the debt re -arrangement order. ”
19 “129(2) Subsection (1) [the required notice of default] does not apply to a credit agreement that
is subject to a debt restructuring order, or to proceedings in a court that could result in such an
order. ”
20 Fillis supra at para [14]. Emphasis supplied.
11
the ravaging effect of escalating interest whilst he or she remains in default under the
credit arrangement. If, however, he or she fails to embrace this opportunity, or he or
she is, notwithstanding this very considerable assistance, unable to comply with his or
her restructured debt commitment, the Act permits the common law to run its course ."
30. In Fillis, the existence of the debt under the relevant credit agreement and the
breach of the defendants’ obligation thereunder were undisputed . Over the
period from the date of the gran t of the rearrangement order to the issue of
summons, the defendants had paid R3 550,00 less, in total, than the amount
stipulated in the re arrangement order.21 Summary judgment was accordingly
granted against the m, as well as an order declaring their immovable property
specially executable.
31. In Firstrand Bank L td v Fester ,22 a judgment delivered in this Division on 15
September 2011, the question arose whether a debt review terminated
automatically by virtue of the consumer defaulting on his obligations under the
debt review order, or whether the debt review is automatically reinstated in the
event of the consumer remedying the default in respect of the debt review order.
The defendants had defaulted on their payments under a debt arrangement
order, but had remedied their breach and paid up the arrears during August
2011. At the time that the su mmary judgment application was heard they were
therefore no longer in arrears under the debt review order, and they argued that
the debt rearrangement had therefore not been terminated.23
32. The Court held ,24 with reference to Fillis, that once the jurisdictional requirement
set out in section 88(3)(a) co -exists with any of the jurisdictional requirements
set out in section 88(3)(b), the rearrangement order automatically falls away
and the relevant credit provider is at liberty to enfo rce, by litigation, any right
21 Fillis supra at paras [2] and [4].
22 [2011] ZAWCHC 363 (15 September 2011).
23 Fester supra at para [2].
24 Fester supra at para [4].
12
under the credit agreement, without further notice. It was held25 that section
88(3) does not provide for an automatic reinstatement of the debt
rearrangement upon a consumer remedying his default .
33. The Court held further26 that the NCA does not give a court a discretion as to
whether the statutory bar to enforcement is uplifted. Whether t he jurisdictional
requirements specified in section 88(3)(a) and (b) have been met is a purely
factual enquiry .
34. In Fester , as in Fillis, there was no dispute about the existence of the original
debt under the relevant credit agreement and the breach of the defendants’
obligations thereunder.27 Summary judgment was granted against the
defendants, together with an order declaring their immovabl e property specially
executable.
35. I pause at this juncture to point out that, i n the present matter, the defendant
admits defaulting on his obligations under the debt review order over the
months preceding the institution of the plaintiff’s action. It is, of course, not in
dispute that he had previously defaulted on his obligations under the credit
agreement. It is therefore common cause that the jurisdictional requirements
set out in section 88(3)(a), read with section 88(3)(b)(ii), have been met. On
the authority of Fillis28 and Fester , the defendant’s debt rearrangement in
relation to the credit agreement was thus automatically terminated upon the first
breach of the debt review order in relation to the plaintiff’s claim.
36. Fester further confirms29 that the debt re arrangement was not automatically
reinstated by the defendant's subsequent “making up” of what he owed the
plaintiff under the debt review order . It follows that, on the authority of Fester ,
25 Ibid.
26 Fester supra at para [5].
27 Fester supra at para [1].
28 And the Supreme Court of Appeal in Kona (see fn 8 above).
29 At para [6].
13
the defendant was in default and the plaintiff was entitled to enforce the credit
agreement in terms of section 88(3).
37. The defendant refers, however, to Absa Bank Limited v McEpie uw,30 an
unreported decision delivered in this Division on 1 August 2013 ,31 in which the
Court refused to grant summary judgment against a defendant who had twice
over a 12 -month period made short payments of what was due under a debt
review order .
38. The facts underlying the decision in McEpie uw are not set out in the decision .
What does appear from the judgment – which was given ex tempore – is that
the Court was swayed by the fact that the defendant was no longer in arrears
with his payments under the debt review order at the time when summons was
issued , having remedied the situation prior to the institution of action . It is use ful
to set out the Court’s reasoning in this regard:32
“While the defendant may have defaulted on one of more occasion, the defendant is
not in arrears and was not in default of his obligation in terms of the debt restructuring
order when summons was issued … during the relevant period he paid to the plaintiff
an amount of R42 082,86 whereas an amount of R33 001,15 was in fact payable in
terms of the debt restructuring order…
Over a period of 12 months two payments were not timeously made but the defau lt
was addressed shortly thereafter…
…Section 88(3)(b) (ii) of the Act is not severable from the act as a whole. The Act
contains an interpretation section which expressly states that it is to be interpreted in
such manner as to give effect to its purposes which are clearly set out in Section 3 of
the Act, The purpose of the Act is set out in somewhat broad terms but in essence
seeks to promote the social and economic benefit of all South Africans underpinned
by a fair and transparent credit market .
30 I requested the court file from Room 1 to consider the contents. It appears that the defendant’s
surname was McEpie uw, and not McEpie ow as indicated on the judgment.
31 Under case number 19252/2012.
32 At pp 2-4 of the judgment.
14
It see ks to address over -indebtedness, provides mechanisms for recording such
problems and asserts as a principle the satisfaction by the consumer of all responsible
financial obligations (See Section 3(g) of the Act.) In this instance, the debtor defendant
appe ars to have been entirely responsible and it would hardly be consistent with the
provisions of the Act or rather its socially salutary purposes to punish such a debtor in
instances where the default is of no real value or, at least, has insignificant finan cial
consequences ”.
39. The Court in McEpie uw did not refer to Ferris or Fillis, and did not consider the
effect of the automatic termination of the debt review arrangement that had
occurred as a result the defendant’s default prior to the institution of the action.
The Court also does not appear to have considered the fact that the debt
rearrangement had not automatically been reinstated upon the defendant’s
payment of the arrears under the debt review order.
40. The Court , whilst accepting the plaintiff’s submission that the plaintiff had been
entitled to institute action under section 88(3)(b)(ii), clearly refused the
application for summary judgment on an equitable basis in the exercise of its
discretion, because it was of the view that the defendant was a responsible
consumer and his default under the debt review order was “ of no real value or,
at least, [had] insignificant consequences ”.33
41. McEpieuw was relied on in another matter in the Eastern Cape Division, namely
Absa Bank Ltd v Jacobs .34 This was an application for default judgment, which
was refused on 6 November 2014. In Jacobs , the defendant had also paid
more in total than what was due under the debt review order, although the
plaintiff argued that she had breached the order over various months preceding
the institution of the action.35
33 At p. 4 of the judgment.
34 2015 JDR 0927 (ECP).
35 At para [19].
15
42. The Court held that the plaintiff had not established that the defendant was in
fact in default of the debt review order. This was because the Court found that
there was no indication that the defendant had not t imeously made the required
payments to the relevant payment distribution agency. The debt review order
did not stipulate when the defendant was to make payment to the agency. If
there were delays in the making of payments to the plaintiff, then those del ays
were to be laid at the agency’s door, not the defendant’s.36
43. The Court referred to the remarks in McEpieuw regarding the social and
economic purposes of the NCA.37 It remarked,38 in relation to the plaintiff, that:
“ … it is reasonably expected that an established creditor will demonstrate
understanding, maturity and fairness in its dealings with struggling, but honest and
responsible debtors. In casu the plaintiff, by pursuing the action and this application for
default judgment, despite having receive d payments in excess of that required by the
order, seems to me to be lacking in "understanding, maturity and fairness" in its
dealings with the defendant. This is clearly not a matter where the defendant is seeking
to frustrate the enforcement of the plai ntiff's debt .”
44. The Court in Jacobs was also dissuaded from granting default judgment
because of the circumstances surrounding the defendant’s failure to appear:39
“The defendant's failure to defend the plaintiff's action, when she has paid an amount
in excess of that required by the order, is surprising. She may well consider that there
is no need to defend the action as the plaintiff is prohibited from litigating against her,
it having failed during the course of the past four years to indicate that it was
dissatisfied with the manner in which it was receiving payment. Furthermore, it may
well be that the defendant is not aware of the pending litigation, as the only document
provided to her was the summons, which was served (in compliance with the unifor m
36 See Jacobs supra at paras [20] -[24].
37 At para [8].
38 At para [28].
39 Jacobs supra at para [30].
16
rules) by the sheriff affixing it to the front door of her chosen domicilium. The plaintiff
has been unable to indicate whether or not the domicilium address is the defendant's
home address. In these circumstances it seems to me appropriate to direct tha t
personal service on the defendant is required before any further proceedings are
prosecuted against her to enforce the provisions of the loan agreement and the
mortgage bond. ”
45. The defendant in the present matter argues that, as he had remedied his default
under the debt review order prior to service of the summons , the approach
taken in McEpie uw and Jacobs is to be preferred over that taken in Fillis and
Fester .
46. I think, however, that the defendant’s case is distinguishable from McEpie uw
as well as from Jacobs on the facts. The defendant short -paid the plaintiff 5
times over a 12 -month period in comparison to the 2 instances of default in
McEpie uw over the same period. In the present matter the defendant paid up
the arrears on the very day that the summons was issued (31 January 2024),
while in McEpieuw the arrears had been paid about a month before the
institution of the plaintiff’s action. In the present matter the asset purchased on
credit is a motor vehicle, whil st in McEpieuw the defendant’s immovable
property was at stake.
47. Jacobs concerned an application for default judgment as opposed to summary
judgment , and various additional factors were at play . In Jacobs there was not
only a monetary judgment at stake, but also the question whether the
defendant’s immovable property should be declared specially executable. The
Court found, on a consideration of the available evidence, tha t the plaintiff had
not proven the defendant’s breach of the debt review order. In the present
matter such breach is common cause on the papers.
48. All of this may perhaps amount t o splitting hairs . What is more important is the
fact that w hatever uncertainties there could have been as to the proper
17
approach in matter s such as these were removed by subsequent decision s
from the Constitutional Court as well as the Supreme Court of Appeal.
49. Shortly after McEpie uw, on 12 December 2013,40 the Constitutional Court
clarified the level of compliance required from a consumer under debt review
under section 88(3) . In Ferris and another v Firstrand Bank Ltd41 it was held
that actual – as opposed to substantial - compliance with a debt review order is
required :
“[20] … Mr and Mrs Ferris submit that they 'substantially' complied with the debt -
restructuring order. They urge us to hold that because they substantially complied,
they cannot be said to have breached the order, and so FirstRand may not enforce the
loan. This contention is not convincing.
[21] While our law recognises that substantial compliance with statutory requirements
may be sufficient in certain circumstances, Mr and Mrs Ferris have not given
compelling reasons why a substantial -compliance standard would be useful or
appropriate in determining compliance with a debt -restructuring order. On the contrary,
there is no indication in the wording of the Act or the debt -restructuring order that
anything less than actual compliance is re quired . …”
50. In the present matter is it common cause that the defendant in fact did not
comply with the debt review order. He was in breach of the order, whether or
not he subsequently paid up the arrears.
51. The Cons titutional Court in Ferris expressly endorsed42 the approach in Fillis
(followed in Fester ) that once the jurisdictional requirement set out in section
88(3)(a) co -exists with any of the jurisdictional requirements set out in section
88(3)(b), the rearrangement order automatically falls away and the relevant
40 Jacobs was determined after Ferris , but given the Court’s finding on the evidence as to the
defendant’s (lack of) default, it was not necessary for the Court in Jacobs to consider the
implications of section 88(3) of the NCA in the specific circumstances of the case.
41 2014 (3) SA 39 (CC) at paras [20] -[21]. Emphasis supplied.
42 Ferris supra at paras [1 4]-[16].
18
credit provider is at liberty to enforce, by litigation, any right under the credit
agreement :
“[14] … Mr and Mrs Ferris breached the debt -restructuring order. Once the
restructuring order had been breached, FirstRand was entitled to enforce the loan
without further notice. This is clear from the wording of the relevant sections of the Act.
Section 8 8(3)(b)(ii) does not require further notice — it merely precludes a credit
provider from enforcing a debt under debt review unless, among other things, the
debtor defaults on a debt -restructuring order. Moreover, s 129(2) expressly stipulates
that the re quirement to send a notice under s 129(1) is not applicable to debts subject
to debt-restructuring orders.
[15] …
[16] It seems to me that an original credit agreement is enforceable without further
notice if the relevant debt -restructuring order is breac hed…. ”
52. In Jili v FirstRand Bank Ltd t/a Wesbank43 the Supreme Court of Appeal dealt
with a consumer who was in breach of a debt review order. She was admittedly
still in arrears when summons was issued:44
“[6] In March and April 2012, the appellant fell into arrears in respect of her rescheduled
repayments to the bank but made this default good in July 2012. In the meantime, on
25 May 2012, the bank instituted an action against the appellant for the return of the
vehicle and recovery of the debt. The acti on was defended. On 24 August 2012 the
bank applied for summary judgment. The application was opposed. It was common
cause that the appellant had not purged her default by the time the application for
summary judgment was heard.
[7] In her affidavit resist ing summary judgment, the appellant said the following:
‘ . . .On 11 June 2012 my attorney confirmed in writing a proposal that I would
bring the arrears up to date by paying the arrears of R3428.86, and requested
the plaintiff’s attorneys to take instructions in this regard… This proposal –
43 2015 (3) SA 586 (SCA). Two judgments were delivered, both coming to the same conclusion ,
albeit for slightly different reasons .
44 See Jili supra at paras [6] -[8] (per Willis JA) . Emphasis supplied.
19
which I respectfully submi t was a most reasonable proposal – was made in the
spirit of keeping alive the rearrangement order that had been made and
enabling me ultimately thereby to satisfy in due course all my financial
obligations to all of the credit providers concerned, includi ng the plaintiff.
However, it was summarily rejected by the plaintiff . . . .’
The appellant’s defence is, in effect, a plea ad misericordiam.
[8] The bank succeeded. Referring to the provisions of s 88(3) of the NCA, the high
court relied strongly on the judgment of Eksteen J in FirstRand Bank Ltd v Fillis &
another to hold that, once a debtor has defaulted in terms of an order by a magistrate
for the re -arrangement of debt, the order is automatically terminated. Correspondingly
and simultaneously, in the view of the court, the termination of the order gave rise to
the requisite jurisdictional facts that enable a creditor to proceed to obtain judgment
against the debtor. The high court found that the appellant had no bona fide defence
to the application fo r summary judgment and, in the result, granted the relief sought by
the bank .”
53. The Supreme Court of Appeal did not accept the appellant’s argument that
Fillis, upon which the High Court had relied in granting summary judgment, had
been wrongly decided. On the contrary, the Supreme Court of Appeal pointed
out45 that Fillis had been approved by the Constitutional Court in Ferris .
“[23] It was argued on behalf of the appellant that Fillis had been wrongly decided, but
the insurmou ntable problem facing the appellant in this regard is the fact that the
Constitutional Court has already reached the contrary conclusion in Ferris v FirstRand
Bank Ltd …
[24] Counsel for the appellant argued that the conclusion of the Constitutional Court in
regard to s 88 was both obiter and clearly wrong, and that this court was entitled to
reach a contrary conclusion. I do not agree. In the first instance, such conclusion is in
my view clearly right. But in any event, the contention that it was obiter is
unsustainable. The appellants in Ferris had sought to rescind a default judgment on
the basis that it had been erroneously sought or granted against them as there was a
debt re -arrangement order in place . Although that order recorded that the rights and
45 Jili supra at para [23] (per Leach JA).
20
obligations amended by the order would be ‘fully enforceable’ in the event of the order
being breached, this did no more than spell out the effect of s 88(3). The clear ratio
decidendi of the case was that the breach of the debt re -arrangement order entitl ed
the bank to enforce the loan without further notice. ”
54. The Supreme Court of Appeal expressly dealt with the exercise of the Court’s
discretion in summary judgment applications where the underlying debt was
undisputed:46
“[10] … the appellant also submit ted that an important purpose of the NCA is to
promote non -litigious methods of resolving consumer defaults and that ‘weight must
be given to constitutional considerations in assigning meaning to the statute’s
provisions. ’The appellant furthermore contend ed that a court always had a discretion
to refuse to grant summary judgment and that in this particular case the discretion
should so be exercised. … The respondent supported the Constitutional Court’s
reasoning in Ferris v FirstRand Bank and submitted tha t the discretion to refuse
summary judgment was confined to situations where there was doubt about the
indebtedness of the defendant, which obviously was not the position in the present
case.
…
[13] … Insofar as the question of the high court’s discretion to grant or refuse the
application for summary judgment is concerned, the critically relevant fact is that it is
common cause that the appellant had no defence, recognised in law, to the fact that
she was indebted to the bank . It is indeed trite that a court has a discretion as to
whether to grant or refuse an application for summary judgment. Although Breitenbach
v Fiat SA (Edms) Bpk has made it plain that a court should exercise a discretion
against granting such an order where it appears that there exists ‘a reasonable
possibility that an injustice may be done if summary judgment is granted’ the context
in which that was said indicates that this precaution applies in situations where the
court is no t persuaded that the plaintiff has an unanswerable case.
[14] It is a different matter where the liability of the defendant is undisputed: the
discretion should not be exercised against a plaintiff so as to deprive it of the relief to
46 See paras [10] -[14] (per Willis JA). Emphasis supplied.
21
which it is entitled . Where it is clear from the defendant’s affidavit resisting summary
judgment that the defence which has been advanced carries no reasonable possibility
of succeeding in the trial action, a discretion should not be exercised against granting
summary judgme nt….”
55. Leach JA , in turn, discussed47 the exercise of the Court’s discretion as follows:
“[26] I turn to the appellant’s submission that even if she has no defence, the court a
quo should have exercised its discretion to refuse summary judgment and thereby
afforded her the opportunity of fulfilling her obligations under the debt re -arrangement
order. In advancing this argument, counsel for the appellant emphasised that the NCA
was intended to protect consumers and to promote social and economic welfare and
a fair, transparent, competitive, effective and accessible credit market.48
[27] The simple answer to this argument is, of course, that a court’s discretion to refuse
summary judgment is limited to those cases where there may be some doubt as to the
defendant’s liability. There is no such doubt in this case. It is not disputed that the
respondent is entitled to the order that it seeks if the debt re -arrangement order earlier
granted by the magistrate does not bar the respondent’s claim which, for the reasons
already given, it does not.
[28] Moreover, … notwithstanding the objective of the NCA to protect consumers, there
has to be a careful balancing of the competing interests sought to be protected and
further that the interests of creditors should ‘also be safeguarded and should not be
overlooked’ .49
[29] The appellant has already enjoyed the considerable benefit afforded by a debt re -
arrangement order that substantially reduced her monthly instalments and at the same
time increased the period available to her to effect repa yment. …
[30] To allow the appellant, who has spurned the advantages flowing from the
magistrate’s order of 4 November 2011 by defaulting in her payments, a yet further
opportunity to attempt to get her affairs in order at the expense of the respondent who
is entitled to the relief it seeks, would not be in the interests of justice. To refuse
summary judgment would be to afford the appellant a further advantage not envisaged
47 See Jili supra at paras [26] -[30]. Emphasis supplied.
48 See McEpieuw supra .
49 Ibid.
22
by the NCA ─ and a second bite at the cherry, so to speak ─ to the detriment of the
clear rights of the respondent .”
56. I am of the view that the approach taken in Jili (and the underlying case law,
including Fillis and Ferris ) is squarely applicable to the present matter.
Although the Supreme Court of Appeal remarked50 that it was common cause
that the appellant had not purged her default by the time the application for
summary judgment was hear d, I do not think that the fact that the defendant in
the present case subsequently paid up his arrears under the debt review o rder
makes any difference.
57. The result of the common cause default was th at the debt rearrangement in
relation to the plaintiff’s credit agreement terminated automatically. Payment
of the arrears ( on the day that the summons was issued) did not reinstate the
rearrangement. I do not agree with counsel for the defendant’s submission that
McEpieuw “confirmed that, even if a consumer has been in default with a debt
review order at some stage, he or she can expunge such default by future
payments, which in effect means that the interpretation [in Fester ] that non -
payment ‘automatically ’ terminates a De bt Review Order cannot be correct .”
McEpieuw confirmed nothing of the sort, and the subsequent authorities made
the position crystal clear.
58. Section 88(3) does not make provision for a see-saw situation in which debt
rearrangements are terminated and rei nstated upon every breach and paying -
up, time after time . The rearrangement was no longer in place when the
summons was served, and it was not in place when the application for summary
judgment was argued. There was accordingly nothing barring the plaint iff from
instituting action and from persisting with the relief sought .
59. It is common cause that the defendant is indebted to the plaintiff under the credit
50 Jili supra at para s [6] and [25].
23
agreement, and that he is in default of his obligations under that agreement.
He has no defence . In these circumstances, I am not inclined to exercise my
discretion in favour of the defendant .
Termination of the debt review process under section 86(10)(b) of the NCA
60. What role does section 86(10)(b) of the NCA play? The section reads as
follows:
"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 court or in the Tribunal. "51
61. As indicated earlier, a credit or’s entitlement to proceed with the enforcement of
the original obligations under the credit agreement in the event of the consumer
defaulting on the terms of a debt rearrangement order was confirmed by the
Constitution al Court in Ferris .52 In a case such as the present, there was no
need fo r the plaintiff to terminate the debt rearrangement, because termination
occurred automatically under section 88(3) of the NCA once the defendant had
defaulted on his obligations under such rearrangement.53 Section 86(1)(b)
therefore does not come into play , and the defendant’s reliance thereon is
misplaced.
Conclusion
62. I find, on the basis of the discussion above, that the defendant has no bona fide
defence to the summary judgment application. The plaint iff is entitled to the
relief sought.
Costs
51 Emphasis supplied.
52 Ferris supra at para [16].
53 See Fester supra at para [6].
24
63. There is no reason why costs should not follow the event.
64. The credit agreement concluded in relation to the vehicle provides that the
plaintiff will be entitled to costs on the scale as between attorney and client if
litigation is required to enforce the plaintiff ’s rights under the agreement.
Order
65. In the circumstances , I grant the following relief:
1. Summary judgment is granted against the defendant for:
1.1 confirmation of termination of the credit agreement concluded
between the parties under account number 9[…] on 2 July 2021;
and
1.2 the return of the motor vehicle described as a 2016 Volkswagen
Polo Vivo GP 1.4 Street 5Dr with engine numbe r CLP […] and
chassis number AAV […] , from wherever it may be found.
2. The defendant shall pay the plaintiff ’s costs of suit on the scale as
between attorney and client.
3. The plaintiff ’s claim for damages is postponed sine die .
____________________
P. S. VAN ZYL
Acting judge of the High Court
Appearances:
25
For the plaintiff : Ms S. Sundelson, instructed by Strauss Daly
Incorporated
For the defendant : Mr J-H Gous , instructed b y E. Rowan
Incorporated