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REPUBLIC OF SOUTH AFRICA
IN THE HGH COURT OF SOUTH AFRICA
HELD AT PRETORIA
CASE NO: 46375 /2020
DOH: 27 January 2025
DECIDED: 09 June 2025
1) REPORTABLE: NO
2) OF INTEREST TO OTHER JUDGES: NO
3) REVISED.
DATE 09 JUNE 2025
SIGNATURE
In the matter between:
BMW FINANCIAL SERVICES SOUTH AFRICA
(Pty) Ltd (Registration Number:
1990/004670/07) Applican t
And
BEULAH LIEBENBERG Respondent
(I.D NUMBER: 7[...])
This judgment has been handed down remotely and shall be circulated to the
parties by way of email / uploading on Caselines. The date of hand down shall
be deemed to be 09 June 2025 .
________________________________________________________________
ORDER
1. Condonation is granted for the late filing of the respondent’s answering
affidavit.
2. The application is upheld .
3. The respondent is ordered to pay the applicant the amount of R 170 181. 00
plus interest on the said amount at the rate of 0.75% above the prime
overdraft rate per annum from date of summons to date of final payment.
4. Costs on the scale as between attorney and client at the Magistrates court
scale.
________________________________________________________________
JUDGMENT
________________________________________________________________
Bam J
Introduction
1. This is an application for the recovery of damages against the respondent.
The origin of the applicant’s claim may be traced back to the installment sale
agreement (agreement) concluded by the parties sometime in 2017. The
respondent opposes the relief based on several points in limine which
include, amongst others, lack of locus standi and reckless lending , the latter,
as contemplated in Sections 81(1) and 81(3) of the National Credit Act1 (the
Act). The respondent further seeks condonation for the late filing of her
answering affidavit.
Background
2. The common cause facts suggest that during November 2020, following the
respondent’s breach of the agreement, the applicant obtained an order by
default authorizing, inter alia, the return of the vehicle. As the applicant’s
1 Act 34 of 2005 .
damages had neither been established nor quantified at that stage, the issue
was postponed. The vehicle was sold and the proceeds allocated to the
respondent’s account in terms of the agreement . Following the sale, the
applicant caused a letter in terms of Section 127 of the National Credit Act,
Act 34 of 2005 to be served upon the respondent calling upon the
respondent to effect payment of the remaining amount, which the
respondent failed to do leading to the present application.
Whether condonation should be granted to the respondent
3. The test whether condonation should be granted in any given case is the
interests of justice. In this regard, the Constitutional Court has admonished
that even though prospects of success should be considered, they are not
decisive as demonstrated in Turnbull -Jackson v Hibiscus Coast Municipality
and Others :
‘In this Court the test for determining whether condonation should be
granted or refused is the interests of justice. Factors that the Court
weighs in that enquiry include: the length of the delay; the explanation for,
or cause of, the delay; the prospects of success for the party seeking
condonation; the importance of the issues that the matter raises; the
prejudice to the other party or parties; and the effect of the delay on the
administration of justice. It should be noted that although the existence of
prospects of success in favour of the party seeking condonation is not
decisive, it is a weighty factor in favour of granting condonation.’2
4. The applicant does not oppose the application. Given the importance of the
issues involved and the negligible delay, it is in the interests of justice that
condonation be granted .
Respondent’s points in limine
5. The respondent raises the following points in limine :
2 [2014] ZACC 24, paragraph 23; Brummer v Gorfil Brothers Investments (Pty) Ltd and Others (CCT45/99)
[2000] ZACC 3; 2000 (5) BCLR 465 ; 2000 (2) SA 837 (CC) (30 March 2000) , paragraph 3.
(i) Lack of locus standi
(ii) The alleged failure to comply with Rule 41A(2) (a)
(iii) Reckless lending and simulated transaction
6. The respondent recorded in her Heads of Argument that she is no longer
persisting with the locus standi and the allegation dealing with failure to
comply with Rule 41A(2)(a). In the circumstances, nothing further need be
said about the two points. That leaves the points dealing with reckless
lending and simulated transaction.
The alleged reckless lending and simulated transaction
7. I consider it convenient to deal with these two points simultaneously as they
rely on the same facts . In brief, the respondent alleges that pursuant to the
affordability analysis conducted by the applicant , it was found that she could
not afford the vehicle. To bring the transaction within her affordability, the
agent, acting on behalf of the applicant , reduced the monthly installments
and added a residual payment , (the so called ballo on payment) of R 58
047.00 without establishing whether she could afford the residual payment.
She submits that the agreement was concluded reckles sly. Thus, this court
must declare it unlawful and set aside her rights and obligations as provided
for in Sections 83(1) and (2) of the Act.
8. Briefly, a ballo on payment refers to a portion of a loan that is deferred until
the end of the loan term. The consumer typically does not make payments
towards this portion. However, they will be required to make one final
payment which is usually significantly larger than the installments paid
during the term of the loan.
9. In advancement of the claim that the transaction was simulated, the
respondent suggests that concluding a credit agreement for a vehicle she
could not afford , had the effect thereof of undermin ing the purpose and
policies of the Act. For these reasons, she argues that the agreement is
unlawful and must be pronounced as such by this court as provided for in
Section 90(2) (a) of the Act.
10. I cannot agree with these contentions. The provisions of the Act in so far as
reckless lending is concerned read:
‘80. (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 agreement 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;
(ii) entering into that credit agreement would make the consumer
overindebted.
(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.
11. If one pauses for a moment, Section 80, subsections (1) and (2) are fact
driven. What was required of the respondent was to substantiate her
allegations with facts as they were at the time the credit transaction was
entered into. It can be accepted that the respondent has not provided any
such information. Both allegations must fail as they are premised on the
same bald claim. With regard to the claim that the agent informed the
respondent that the inclusion of the balloon payment was to make cars
affordable to consumers , this is hearsay evidence which, in terms of Section
3 of the Law of Evidence Amendment Act3 is not admissible, unless the
court concludes otherwise , based on the criteria set out in the section , that it
is in the interests of justice to admit it. In the circumstances of this case,
there is nothing before the court from which it may draw the conclusion that
it is in the interests of justice to admit the hearsay evidence.
12. I may add that on her own version, the applicant was able to sustain the
monthly installments from about March 2017 up to August 2020. This to me
does not suggest reckless lending or anything about simulation but a change
in the respondent’s circumstances. The defences of reckless lending and
simulated agreement then must fail.
Costs
13. The applicant sought the costs on the scale as between attorney and client. I
grant the costs but on the Magistrates court scale.
Order
1. Condonation is granted for the late filing of the respondent’s answering
affidavit.
2. The application is upheld.
3. The respondent is ordered to pay the applicant the amount of R 170 181. 00
plus interest on the said amount at the rate of 0.75% above the prime
overdraft rate per annum from date of summons to date of final payment.
4. Costs on the scale as between attorney and client at the Magistrates court
scale.
3 Act 45 of 1988 .
N.N BAM J
JUDGE OF THE HIGH COURT OF SOUTH AFRICA,
GAUTENG DIVISION , PRETORIA
Date of Hearing: 27 January 2025
Date of Judgment: 09 June 2025
Appearances :
Counsel for the Applicant: Adv S Webster
Instructed by: MacRobert Inc
Brooklyn, Pretoria
Counsel for the Respondent: Mr W.R Ewart
(Attorney with right of
appearance in the High Court)
Ewart Attorneys
c/o Herman Vorster Inc,
Garsfontein, Pretoria