IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN )
Case No.: 21308/2022
In the matter between:
FFS FINANCE t/a FORD CREDIT APPLICANT/ PLAINTIFF
And
CP VAN DER MERWE RESPONDENT/DEFEDANT
Date of Hearing : 30 April 2025
Date of Judgment: 30 May 2025
________________________________________________________________
JUDGMENT
________________________________________________________________
THULARE, J
DELETE WHICHEVER IS NOT APPLICABLE
(1) REPORTABLE: YES/NO
(2) OF INTEREST TO OTHER JUDGES: YES/NO
(3) REVISED
30 May 2025
[1] This matter was heard on the unopposed roll as an application for judgment by
default. It concerns an application for the repossession of a motor vehicle in terms of
a credit agreement governed by the National Credit Act , 2005 (Act No. 34 of 2005 )
("the NCA"). The applicant, a credit provider, sought enforcement of its rights arising
from the respondent’s alleged default on monthly instalments. This matter required
that the court carefully weigh the applicant’s contractual and statutory entitlements
against the broader objectives of the NCA , particularly the promotion of fairness and
the protection of consumers fro m unfair practices . This court, in the circumstances of
this case, on the papers, was not persuaded that it would be just and equitable to grant
the relief sought by the applicant. It seemed to me that the respondent may not have
been afforded a fair oppor tunity to regularise the account.
[2] A section 12 9 notice in terms of the National Credit Act was delivered , followed in
due course by personal service of the summons, on the defendant on 16 January
2023. A Notice of Intention to Defend was thereafter filed on 06 February 2024. The
defendant was barred from filing a plea. According to the Declaration filed on 12
February 2024, the plaintiff, a registered commercial bank , entered into a written
instalment sale agreement with the defendant for the sale and purchase of a 2015
Ford Ranger 4 x 4 motor vehicle. The plaintiff alleged that the defendant failed to
make payments as agreed , hence the plaintiff cancelled, alternatively, cancels the
agreem ent and alleged it is entitled to the immediate return of the goods. It was alleged
that the arrears as of 09 December 2022, amounted to R112 888,19 which also is the
outstanding balance. The plaintiff alleged that it had complied with the provisions of
the National Credit Act and hence sought judgment confirming the cancellation of the
agreement and return of the 2015 Ford Ranger 4 x 4 motor vehicle, as well as costs
on the attorney and client scale.
[3] The defenda nt was represented , and the plaintiff’s Declaration was served on his
attorneys electronically on 13 February 2024. On 15 March 2024, the plaintiff’s
attorneys , not having received a plea, despatched a Notice of Bar, electronically to the
Defendant’s attorneys. The defendant’s attorneys per return email, acknowledged
receipt of the Notice of Bar. The plaintiff filed its Notice in terms of Rule 41A, dated
09 December 2022 . In this Notice it is recorded that the defendant was invited to a
whole range of alternative dispute resolution options when it delivered its section 129
notice in terms of the NCA to the defendant , prior to the institution of legal proceedings
against the defendant. The notice records further that there was no response
forthcoming from the defendant. This notice was directed to the defendant himself,
and the defendant was notified as follows: “The plaintiff has cancelled the agreement
with the defendant as a result of the defendant’s failure to make payments as alleged
in the summons and delivery of the asset described in the instalment sale agreement
cannot be an aspect for ref erral to mediation and constitutes urgent relief…”
[4] In bringing this application, the plaintiff relied on the affidavits deposed to by Kyle
Vilakazi (Vilakazi) on 22 July 2024 . He averred that he is a manager employed by the
plaintiff in Auckland Park who has personal knowle dge of this matter . He stated the
following about the arrears : “The defendant contacted the plaintiff to make the
necessary payment arrangement to bring the arrears up to date. The defendant was
accordingly informed that his last payment was in August 2022 and that he is required
to pay 50% of the arrear amount immediately and the remaining arrear amount over a
period of three months. The defendant advised that he is unable to meet the plaintiff’s
requirements and therefore an arrangement was not concluded.”
[5] The NCA regulates credit agreements. The various purpose s of the NCA are set
out, in section 3, in some detail . Section 3(e) aimed to address and correct the
imbalances that existed in the negotiating power between consumers and credit
providers . The NCA aimed to promote social and economic welfare of South Africans
by fostering a fair, transparent, responsible, and accessible credit market. It
encourage d responsible borrowing and l ending, protect ed consumers from unfair
practices, provide d for improve d credit information and regulation, and address ed
over-indebtedness. The Act also promote d informed consumer choices through
education and disclosure and establishe d mechanisms for dispute resolution in credit
matters. In section 3(e) , the NCA expresse d its intent ion to protect consumers from
unfair conduct.
[6] Section 129 (1) to (3) of the NCA read:
“ Required procedures before debt enforcement
129 (1) If the consumer is in default under a credit agreement, the credit
provider -
(a) may draw the defa ult 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 disput e under the agreement or develop and
agree on a plan to bring the payments under the agreement up to date; and
[NB: Para. (a) has been substituted by s. 20 (a) of the National Credit
Amendment Act 7 of 2019 , a provision which will be put into operation by
proclamation. See PENDLEX. ]
(b) subject to section 130 (2), may not commence any legal proceedings to
enforce th e 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 fu rther requirements set out in section 130.
(2) Subsection (1) 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.
(3) Subject to subsection (4), a consumer may at any time before the credit
provider has cancelled the agreement, remedy a default in such credit
agreement by paying to the credit provider all amounts that are overdue,
togethe r with the credit provider's prescribed default administration charges and
reasonable costs of enforcing the agreement up to the time the default was
remedied.”
[7] In the absence of an indication of abuse to alert the court to a more vigilant enquiry,
an applicant would ordinarily be entitled to judgment in the ordinary course where a
creditor sought to enforce an agreement [ Nedbank v Fraser 2011 (4) SA 363 GSJ at
para 27]. One of the philosophical shifts in the jurisprudence of credit agreements,
ushered in by the NCA, is to research the existence of reasonable alternatives to the
satisfaction of the debt without resort to litigation . In Nedb ank at para 43 the court said:
“The existence of these reasonable alternatives will be determined with regard
being had to attempts by the debtor to pay off the debt and the debtor’s
resources”
At para 44, the court opined that a determination of these co nsiderations was made
much easier by the ability of the debtor to disclose resources, employment status and
any other factor which might militate against an order being granted in favour of a
creditor. In Ranamane v SB Guarantee Company (Rf) (Pty) Ltd (5285321) 2023
ZAGPJHC 592 (29 May 2023) the creditor had required information from the debtor
which included proof of income; reasons for not maintaining monthly payments and
proposal; breakdown of monthly expenses; list of all debt, monthly repayment amount
and outstanding balance; 3 month bank statements, municipality utility bill and if in
arrears proof of payment arrangements; and in the alternative the debtor’s attention
was brought to the creditor’s programmes to assist debtors in distress . This was a
movement of a creditor in the right direction in the spirt of the NCA, for it to make a fair
assessment of the proposal.
[8] In the matter before me, the applicant ’s attitude was preference to only one
payment arrangement option, which was its own proposal. On the applicant’s own
version, the respondent “contacted the plaintiff to make the necessary payment
arrangements to bring the arrears to date”. This is not the conduct of a respondent
who has a hostile mindset towards his obligations in terms of the con tract. The conduct
suggests an appreciation of the problem and a desire to resolve it. The “ necessary
payment arrangements to bring the arrears to date” proposed to the applicant were
not disclosed to the court in this matter. The applicant elected to make the proposal a
mystery in its approach to the court for relief . Whilst the applicant followed the attitude
in Ranamane and sought a lump -sum payment of 50% of the arrears, it does not follow
that such option is always reasonable and fair to a debtor who i s known to have
suffered financial distress in the recent past. Such demand appear to have the
tendency to negate a genuine attempt made to reach a resolution of the indebtedness
without resorting to litigation, as envisaged by the NCA. The submission of a debtor’s
comprehensive financial documentation acknowledged that some debtors may not be
able to meet strict lump -sum requirements but may require payment arrangements
plans tailored to provide a solution to meet their individualised capacity. In my view,
this promoted equity, and not the punitive approach of ‘my way as a creditor or we are
having a meeting with a Judge ’.
[9] I am circumspect in confirming a cancellation of an agreement where the credit
provider did not attempt to negotiate with the debtor in the spirit of our jurisprudence.
The statement by Vilakazi that “ the defendant advised that he is unable to meet the
plaintiff's requirements and therefore an arrangement was not concluded ”, in my view,
reflected the power imbalance of the parties. There was no equality of arms. The
approach of Vilakazi , to wit, that the only way towards a payment arrangement was
for th e debtor to meet the plaintiff’s requirements of 50% immediate payment and the
remainder of the arrears within three months, suggests coercion and not collaboration ,
in the discussi ons on the payment arrangements to bring the arrears up to date . The
failur e to indicate the proposal by the debtor, his financial health, and why the proposal
did not make business and/or economic sense amounts to simply a pursuit of a
dangerous policy to the limits of threatening debtor fairness and protection and is an
unfair practice in debt collection. It excludes meaningful participation by the debtor in
the payment arrangement. Vilakazi’s approach, when assessed for fairness ,
transparency, accessibility and debtor protection , fell short of what was required.
[10] A credit or should engage meaningfully with a debtor. A section 129(1)(a) notice
of the NCA is not a creditor’s ritual. It should never be equated to an empty box for a
creditor to tick. It confers on a creditor certain responsibilit ies which are prerequisites
central to the decision of the creditor to institute litigation proceedings. The response
of a debtor to a section 129 is not simply a noisy irritation to be endured by a creditor,
which a creditor can simply ‘blue tick’. Vilakazi was wrong to simply read and ignore
the debtor’s proposal. The applicant was wrong to expect the courts to accept their
ignorance of the proposal, without the courts even knowing what that proposal was.
The debtor, in response to the section 129 through a proposal, expected or request ed
a consideration thereof. A debtor’s proposal is an essential part of the prerequisite to
institute legal proceedings.
[11] A consideration of the proposal would mean that the creditor acknowledged and
saw the debtor as a party that could contribute to the resolution of the challenge faced.
A genuine consideration of the proposal means the creditor appraised the relationship
and the esteem of the debtor, and did not see the debtor as a commodity with fungi,
to be dispensed with at will. The debtor and their response may no longer be important
for the creditor who may have developed an impatient and restless behaviour, but that
did not mean they were not important for the courts. Debtors must still be seen and
heard by the courts, despite the views of creditors on them. This case demonstrated
the need for a creditor not only to provide a certificate of indebtedness, but also a
compliance affidavit, especially dealing with the path of travel after the section
129(1)(a) notice was served, where it was reacted to by a debtor who accepts
responsibility and needs to correct the failures , even in an application for a default
judgment . In this matter, except for an unexplained condescending attitude towards
the debtor’s proposal, there is no explanat ion as to why the creditor did not deem the
debtor’s proposal worthy enough for a payment plan arrangement. For these reasons
I make the order.
(a) The application is dismissed on the papers .
(b) No cost order is made .
___________________________
DM THULARE
JUDGE OF THE HIGH COURT
Counsel for the Applicants: Adv Lauren Bosman
Attorneys for the Applicants: Sandenberg Nel Haggard
Bellville
Attorneys for the Respondent: In Person