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[2019] ZASCA 168
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FirstRand Bank Limited t/a Wesbank v Davel (1229/2018) [2019] ZASCA 168; [2020] 1 All SA 303 (SCA) (29 November 2019)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case
no: 1229/2018
Reportable
In
the matter between:
FIRSTRAND
BANK LIMTED T/A
WESBANK APPELLANT
and
NICOLAAS
JOHANNES
DAVEL RESPONDENT
and
UNIVERSITY
OF THE FREE STATE LAW CLINIC
AMICUS
CURIAE
Neutral
Citation:
FirstRand Bank Limited t/a Wesbank v Davel
(1229/2018)
[2019] ZASCA 168
(29 November 2019).
Coram:
Navsa, Swain, Zondi and Mokgohloa JJA and Gorven AJA
Heard:
8 November 2019
Delivered:
29 November 2019
Summary:
National Credit Act 34 of 2005
–
s131
– repossession
of goods – attachment of motor vehicle – estimated value
– sale as soon as practicable for
best price reasonably
obtainable – credit provider required to give notice to
debtor of gross amount realised on sale
– right of debtor to
dispute amount of proceeds of sale – debtors extensive
rights.
ORDER
On
appeal from
: Gauteng Division of the High Court, Pretoria (Legodi
JP sitting as court of first instance):
1
The appeal is upheld to the extent reflected in the substitution
order set out hereafter, and no order is made as to costs.
2
The order of the court below is set aside and substituted as follows:
‘
20.1 Default
judgment is granted as follows regarding the two Standard Bank
matters:
20.1.1
Cancellation of the agreement in each case is hereby confirmed.
20.1.2
The return of the following vehicles to the credit provider, Standard
Bank, is ordered:
(a) Ford Kuga 1.6
Ecoboost Trend bearing engine number DU86764 and chassis number
WF0AXXWPMADU86764;
(b)
2010 Audi A4
1.8T
AMBITION (B8) bearing engine number CDH086852 and chassis number
WAUZZZ8K2AA141331.
20.1.3
Costs of R200,00 and Sheriff’s fees in the amount of R444,04 as
prayed for by Standard Bank against Mr Renier Venter
in paragraph 5
of the relief sought.
20.1.4
Costs of R200,00 and Sheriff’s fees in the amount of R426,27 as
prayed for in paragraph 5 of the relief sought against
Mr Sipho David
Maoshene (the credit consumer) by Standard Bank.
20.2 Summary judgment is
granted in favour of FirstRand Bank Limited against Nicolaas Johannes
Davel as follows:
20.2.1
Cancellation of the agreement is hereby confirmed.
20.2.2
The return of the following vehicle to the credit provider, FirstRand
Bank, is ordered:
2010
Volkswagen Polo 1.6 Comfortline SE, engine number CLS056389 and
chassis number VWZZZ60ZBT044929.
20.2.3
The damages component of the plaintiff’s claim is postponed
sine die
.
20.2.4
The defendant is ordered to pay the plaintiff’s costs of suit.
20.3 Upon the return of
each of the vehicles described in paragraph 20.1.2(a), 20.1.2(b) and
20.2.2 to each respective plaintiff:
20.3.1
The plaintiff shall, within 10 business days from the date of
receiving return of the vehicle, give the defendant written
notice:
(a) setting out the
estimated value of the returned vehicle;
(b) informing the
defendant that it intends to sell the returned vehicle as soon as
practicable for the best price reasonably obtainable;
and
(c) informing the
defendant that the price obtained for the returned vehicle upon its
sale may be higher or lower than the estimated
value.
20.3.2
The plaintiff shall sell the returned vehicle as soon as practicable
for the best price reasonably obtainable.
20.3.3
After selling the returned vehicle, the plaintiff shall:
(a) credit or debit the
defendant with a payment or charge equivalent to the proceeds of the
sale less any expenses reasonably incurred
by the plaintiff in
connection with the sale of the goods; and
(b) give the defendant a
written notice stating the following:
(i)
the settlement value of the agreement immediately before the sale;
(ii)
the gross amount realised on the sale;
(iii)
the net proceeds of the sale after deducting the plaintiff’s
permitted default charges, if applicable, and reasonable
costs
allowed under paragraph (a); and
(iv)
the amount credited or debited to the defendant’s account.
20.3.4
The notice referred to in paragraph 20.3.3(b) above shall state that:
(a) If the defendant
disputes the amount of the proceeds of the sale or any other charges
or expenses incurred, he or she may engage
directly with the credit
provider in relation thereto.
(b) If the engagement
referred to in (a) does not yield, from the defendant’s
perspective, the desired result, he or she may,
refer the dispute to
the Tribunal or submit a complaint in terms of
s 136
of the
National Credit Act 34 of 2005
to the National Credit Regulator.
20.3.5
If an amount falls to be credited to the defendant’s account
which exceeds the settlement value immediately before
the sale of the
returned vehicle, the plaintiff must remit such excess amount to the
defendant together with the notice referred
to in paragraph 20.3.3(b)
above.
20.3.6
If an amount is credited to the defendant’s account which is
less than the settlement value before the sale, or an
amount is
debited to the defendant’s account, the plaintiff may demand
payment from the defendant of the remaining settlement
value in the
notice referred to in paragraph 20.3.3(b) above.
20.3.7
If the defendant fails to pay the amount demanded in terms of
paragraph 20.3.6 above within 10 business days of receiving
such
demand, the plaintiff may commence proceedings against the defendant
for any outstanding damages.
20.3.8
The defendant shall pay interest at the rate applicable to the credit
agreement, on any outstanding amount demanded by the
plaintiff in
terms of paragraph 20.3.7 above, from the date of the demand until
the date of payment of the outstanding amount.
20.3.9
In the notice referred to in para 20.3.4, the consumer must also be
notified, if applicable, that if there is a dispute in
relation to
any of the matters set out in 20.3.5-20.3.8, the mechanisms referred
to in 20.3.4(a)–(b) are at his or her or
its disposal.
20.4 The respective
plaintiff shall aver and prove in its action for any outstanding
damages, that it has complied with the requirements
set out in
paragraph 20.3 above.
JUDGMENT
Navsa
JA (Swain, Zondi and Mokgohloa JJA and Gorven AJA concurring):
[1]
This is an appeal, with the leave of this court, principally against
part of an order by the court below. The court below, after
confirming the cancellation of an instalment sale agreement, and
ordering the return of a motor vehicle purchased in terms thereof,
made the following additional order, which is at the centre of the
present appeal:
‘
20.4 That upon
return of the vehicles described in paragraphs 20.1.1, 20.1.2 and
20.3.1, the applicants (credit providers) shall,
within 10 business
days from date of receiving the vehicles respectively, give the
consumer written notice setting out the estimated
value of the
vehicles aforesaid and informing the consumers respectively that the
vehicles in relation to each one of them will
not be sold at a price
less than such an estimated value unless so sanctioned by the court
to sell the vehicles at a lesser price
after a notice shall have been
given to the consumer concerned.’
The
detailed background is set out hereafter.
[2]
On 27 June 2011, the appellant, FirstRand Bank Limited t/a Wesbank
(Wesbank), concluded a written instalment sale agreement
with the
respondent, Mr Nicolaas Johannes Davel, in terms of which he
purchased a 2010 Volkswagen Polo 1.6 Comfortline SE for an
amount of
R195 863,45. In terms of the agreement, Mr Davel was required to
pay 59 consecutive monthly instalments of R3 592,79
and a final
balloon payment of R68 976 to be made on 25 July 2016.
Typically, the agreement provided for payment by Mr Davel
of interest
at a fixed rate of 11,5 per cent per annum. The agreement contained
the usual reservation of ownership clause in terms
of which ownership
is reserved by the seller until the full purchase price had been
paid. Mr Davel fell behind on the payment of
his instalments and, as
at 26 May 2017, he was in arrears in an amount of R75 415,92.
[3]
A notice in terms of s 129(1)
(a)
of the National Credit Act 34 of 2005 (the Act) was sent by Wesbank
to Mr Davel,
[1]
drawing his
attention to the options available to him in terms of the Act, but
also stating that, in the event of him not choosing
any of them,
legal action would be instituted against him claiming, inter alia,
cancellation of the agreement and return of the
vehicle. Mr Davel did
not respond to the notice, prompting Wesbank to issue summons
claiming the relief it had threatened. This
was followed by an
application for summary judgment by Wesbank, in terms of which it
claimed, inter alia, the cancellation of the
agreement, the return of
the motor vehicle and that the entire damages component of its claim
be postponed
sine
die
. It
also sought forfeiture of all monies paid by Mr Davel.
[4]
Wesbank’s application for summary judgment, together with two
other applications by Standard Bank for default judgment,
on similar
grounds and claiming similar relief, came before the Gauteng Division
of the High Court, Pretoria (Legodi JP). All three
were unopposed.
The court below had no difficulty in accepting that the two banks, in
the face of default by the respective purchasers,
were entitled to
cancel the instalment sale agreements and obtain the return of the
motor vehicles. Legodi JP, however, expressed
certain concerns about
the price at which the vehicles would later be resold by the banks.
It should be borne in mind that, contractually
and in terms of the
Act, sellers, in terms of instalment sale agreements, are in the
normal course entitled, upon default by purchasers,
to claim from the
latter the amount that they would have received had the purchasers
fulfilled their contractual obligations. In
respect of the provisions
of the Act the prescribed procedures must, of course, be complied
with. The proceeds of the sale of the
motor vehicles concerned must
ultimately be brought into account in determining how much is still
owing or, depending on the amount
recovered, the surplus amount that
accrues to the purchaser.
[2]
[5]
The concerns of the court below were expressed in paras 9-11 of its
judgment as follows:
‘
There is a
tendency to recover these vehicles and then sell them at a ridiculous
price. Some measure of control is needed in order
not to allow the
system to be abused to the prejudice of credit consumers. I am
greatly indebted to Advocate H.F Brauckmann who
represented the three
applicants, the credit providers. His oral submissions and written
heads of argument filed at the request
of the court have been
valuable.
The issue as I see it, is
not much about whether or not the credit providers are owners of the
vehicles in question and whether
or not cancellation of the agreement
and return of the vehicles make it less important insofar as it
relates to the interest of
the credit consumers to an extent that
this court has no role to play post cancellation and return of the
vehicles and before the
court is approached on what is referred to as
“damages claim”.
I was made to understand
that upon return of the motor vehicles to the respective credit
providers, they will be valued and thereafter
sold. It is the price
at which these vehicles will be sold that concerns me. Mr Brauckmann
on behalf of the applicants indicated
that the values of the vehicles
will be determined by an independent valuator who will then provide a
valuation certificate. He
however could not give an assurance that
the vehicles would not be sold at an amount less than as per the
evaluation certificate
without the sanctioning of the court.’
[6]
After a consideration of the provisions of ss 127 and 131 of the Act,
it went on to say the following:
‘
Any sign of
possible abuse ought to be cautioned and rooted out at the same time,
not to unfairly prejudice the credit providers.
If the court is
entitled to make an order returning the vehicle to the credit
provider upon cancellation of the credit agreement
as per the relief
sought on these three vehicles, it should also be entitled to take
proactive steps in protecting the consumer
by ensuring that the
vehicles are not sold at a far less price than the vehicle’s
value unless good cause is shown to the
court why a lesser price
should be sanctioned. It cannot be right to allow the horse to bolt,
that is, to sell the vehicles under
credit agreements at a lesser
price than the value and thereafter approach the court in the form of
damages claim.
In the course of oral
submission, it was contended that the proposed order by the court can
be problematic. That is, the order directing
the applicants in the
present proceedings not to sell the vehicles at a less price than the
value thereof. I understood the contention
to have been that the
credit providers would be forced to approach courts at a huge costs
time and again. I do not share the view
as the concern will just
surely perpetuate the sales of returned vehicles at less price than
the value thereof to the great prejudice
of credit consumer who will
find themselves being burdened with a huge debt occasioned by money
not for value for the vehicles
so returned. Any credit provider who
seeks to sell the returned vehicle at a lesser price, must in my
view, get the sanctioning
of the court.
Concern about a credit
providers being forced to approach the court in an open court instead
of asking the Registrar in applications
of this nature to grant
judgment can be resolved by ensuring that averment is made in the
application that the returned vehicle
will not be sold at a price
less than its value unless sanctioned by the court. In any event in
all the present three applications
the credit providers are obliged
to return to court at some stage or the other for damages claim. The
point I am making is that
the credit provider does not have to be
approaching the court several times provided there is caveat to the
price at which the
returned vehicle as indicated in the preceding
paragraphs.
Look at it this way: A
credit consumer who is provided with a valuation certificate in which
the estimated value is set out as so
contemplated in section
127(2)(b) of the Act, may decide not to pursue the matter because he
or she is satisfied with the value
thereof and would be looking
forward for a significant reduction of his or her indebtedness to the
credit provider. Therefore to
sell the goods at a less price without
reverting to the consumer and without the sanctioning of the court
makes the provisions
of subsection (2)(b) moot or academic.’
[3]
[7]
Thereafter, Legodi JP confirmed the cancellation of each of the three
instalment sale agreements and ordered the return of the
vehicles,
followed by the order in para 20.4, set out in para 1 above. In
addition, the following three orders were made:
‘
20.5 Costs of
R200.00 and sheriff’s fees in the amount of R444.04 as prayed
for by Standard Bank against Mr Renier Venter
in paragraph 5 of the
relief sought.
20.6 Costs of R200.00 and
sheriff’s fees in the amount of R426.27 as prayed for in para 5
of the relief sought against Mr
Sipho David Maoshene (the credit
consumer) to Standard Bank.
20.7 The
defendant/respondent, Nicolaas Johannes Davel to pay the costs of the
application to First Rand Bank Ltd.’
[8]
An application for leave to appeal by Wesbank was dismissed with
costs by the court below. An application for leave to appeal
to this
court was successful, hence the present appeal directed, primarily,
against the order in para 20.4. In relation to its
two cases,
Standard Bank did not appeal. Mr Davel, as he did in relation to the
proceedings in the court below, did not participate
in the appeal at
all.
[9]
Because of the importance of the matter for both credit providers and
consumers, this court was concerned in the absence of
Mr Davel that
there was no legal representation in respect of the interests of
consumers. The Registrar attempted numerous times,
in exchanges with
Mr Davel, to acquire the services of a legal representative to assist
him in the appeal. All her attempts proved
unsuccessful. Finally, the
University of the Free State, through its Law Clinic, applied to be
admitted as
amicus curiae
, citing its interest in matters
affecting the rights of consumers. It has, no doubt, developed
experience in that field by advising
and representing consumers who
seek legal assistance.
[10]
Initially, Wesbank was disinclined to agree to the admission of the
University’s Law Clinic as
amicus curiae
, but after
exchanges with this court, it was accepted that the Law Clinic could
be of real assistance in arriving at a conclusion
with a resultant
order that will provide guidance to credit providers and consumers
and have practical effect. The Law Clinic was
admitted as
amicus
curiae
.
[11]
At the outset, it is necessary to record that the concerns of the
court below were legitimate but that para 20.4 of the order
was made
without a proper appreciation of the architecture of the Act and was
not in accordance with its provisions. The order
required re-crafting
to protect the rights of both credit providers and consumers. On
this, Wesbank and the
amicus
agreed.
[12]
I turn to a consideration of the relevant provisions of the Act. It
is necessary to have regard, first, to the purpose of the
Act and,
second, to all of the material parts of its extensive and rather
convoluted provisions. The relevant part of the long
title of the Act
states that the Act was promulgated, inter alia, ‘to promote a
fair and non-discriminatory market place
. . . [and] to provide for
the general regulation of consumer credit and improve standards of
consumer information’. Section
3 spells out the Act’s
purpose:
‘
The purposes of
this Act are to promote and advance the social and economic welfare
of South Africans, promote a fair, transparent,
competitive,
sustainable, responsible, efficient, effective and accessible credit
market and industry, and to protect consumers,
by—
. . .
(d)
promoting
equity in the credit market by balancing the respective rights and
responsibilities of credit providers and consumers;
. . .
(f)
improving
consumer credit information and reporting and regulation of credit
bureaux;
(g)
addressing and
preventing over-indebtedness of consumers, and providing mechanisms
for resolving over-indebtedness based on the
principle of
satisfaction by the consumer of all responsible financial
obligations;
(h)
providing for
a consistent and accessible system of consensual resolution of
disputes arising from credit agreements; and
(i)
providing for
a consistent and harmonised system of debt restructuring, enforcement
and judgment, which places priority on the eventual
satisfaction of
all responsible consumer obligations under credit agreements.’
The
Act has as one of its main purposes the protection of the interests
of consumers.
[13]
Section 122(2)(
a
) of the Act entitles a
consumer
to
terminate an instalment sale agreement by
surrendering
the
goods that are the subject of the agreement in accordance with s 127.
Section 123 of the Act deals with the termination
of a credit
agreement by a credit provider. Section 123(2) states that, if a
consumer is in default, the credit provider may terminate
the
agreement by taking the steps set out in Part C of Chapter 6, which
includes the steps to be taken in terms of ss 129,
130 and 131.
[14]
Section 127, under the heading ‘Surrender of goods’,
enables a
consumer
under an instalment sale agreement to give
written notice to a credit provider to terminate the agreement. The
material parts of
s 127 read as follows:
‘
(1) A consumer
under an instalment agreement, secured loan or lease—
(a)
may give written notice to the credit provider to terminate the
agreement; and
(b)
if—
(i) the goods are in the
credit provider’s possession, require the credit provider to
sell the goods; or
(ii) otherwise, return
the goods that are the subject of that agreement to the credit
provider’s place of business during
ordinary business hours
within five business days after the date of the notice or within such
other period or at such other time
or place as may be agreed with the
credit provider.
(2) Within 10 business
days after the later of—
(a)
receiving a notice in terms of subsection (1)
(b)
(i); or
(b)
receiving goods tendered in terms of subsection (1)
(b)
(ii),
a credit provider must give the consumer written notice setting out
the estimated value of the goods and any other prescribed
information.
(3) Within 10 business
days after receiving a notice under subsection (2), the consumer may
unconditionally withdraw the notice
to terminate the agreement in
terms of subsection (1)
(a)
, and resume possession of any goods
that are in the credit provider’s possession, unless the
consumer is in default under
the credit agreement.
(4) If the consumer—
(a)
responds to a notice as contemplated in subsection (3), the
credit provider must return the goods to the consumer unless the
consumer
is in default under the credit agreement; or
(b)
does not respond to a notice as contemplated in subsection (3), the
credit provider must sell the goods as soon as practicable
for the
best price reasonably obtainable.
(5) After selling any
goods in terms of this section, a credit provider must—
(a)
credit or debit the consumer with a payment or charge equivalent
to the proceeds of the sale less any expenses reasonably incurred
by
the credit provider in connection with the sale of the goods; and
(b)
give the consumer a written notice stating the following—
(i) The settlement value
of the agreement immediately before the sale;
(ii) the gross amount
realised on the sale;
(iii) the net proceeds of
the sale after deducting the credit provider’s permitted
default charges, if applicable, and reasonable
costs allowed under
paragraph
(a)
; and
(iv) the amount credited
or debited to the consumer’s account.
. . .
(7) If an amount is
credited to the consumer’s account and it is less than the
settlement value immediately before the sale,
or an amount is debited
to the consumer’s account, the credit provider may demand
payment from the consumer of the remaining
settlement value, when
issuing the notice required by subsection (5)
(b)
.’
Section
127, as the heading indicates, is intended to apply when a consumer
‘surrenders’ the goods purchased.
[15]
Section 128 of the Act reads as follows:
‘
(1) A consumer who
has unsuccessfully attempted to resolve a disputed sale of goods in
terms of section 127 directly with the credit
provider, or through
alternative dispute resolution under Part A of Chapter 7, may apply
to the Tribunal to review the sale.
(2) If the Tribunal
considering an application in terms of this section is not satisfied
that the credit provider sold the goods
as soon as reasonably
practicable, or for the best price reasonably obtainable, the
Tribunal may order the credit provider to credit
and pay the consumer
an additional amount exceeding the net proceeds of sale.
(3) A decision by the
Tribunal in terms of this section is subject to appeal to, or review
by, the High Court to the extent permitted
by section 148.’
This
section puts further measures at the disposal of a consumer.
[16]
Section 129 sets out the procedures to be followed by a credit
provider before debt enforcement can be resorted to, where the
consumer is in default. Section 129(1) provides:
‘
(1) 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.’
[17]
Section 130(1), under the heading ‘Debt procedures in a Court’,
reads as follows:
‘
(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(10),
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
(c)
in the case of an instalment agreement, secured loan, or lease, the
consumer has not surrendered the relevant property to the credit
provider as contemplated in section 127.’
[18]
Section 130(3) reads as follows:
‘
(3) Despite any
provision of law or contract to the contrary, in any proceedings
commenced in a court in respect of a credit agreement
to which this
Act applies, the court may determine the matter only if the court is
satisfied that—
(a)
in the case of proceedings to which sections 127, 129 or 131 apply,
the procedures required by those sections have been complied
with;
(b)
there is no matter arising under that credit agreement, and pending
before the Tribunal, that could result in an order affecting
the
issues to be determined by the court; and
(c)
that the credit provider has not approached the court—
(i) during the time that
the matter was before a debt counsellor, alternative dispute
resolution agent, consumer court or the ombud
with jurisdiction; or
(ii) despite the consumer
having—
(aa)
surrendered property to the credit provider, and before that property
has been sold;
(bb)
agreed to a proposal made in terms of section 129(1)
(a)
and acted in good faith in fulfilment of that agreement;
(cc)
complied with an agreed plan as contemplated in section 129(1)
(a)
;
or
(dd)
brought the payments under the credit agreement up to date, as
contemplated in section 129(1)
(a)
.’
[19]
It is clear from these provisions that the legislature was intent on
ensuring that sufficient protections are provided to ensure
that,
upon termination of a credit agreement, a consumer is protected. The
Act provides mechanisms for a consumer to challenge
the estimated
values and the price realised upon a sale of goods after either a
surrender of the goods by a consumer or the repossession
of the goods
after action has been taken by the credit provider. As can be seen
from the provisions set out above, the Act also
provides for
enforcement of the rights of credit providers. Its purpose is
directed to ensuring, as far as is practically possible,
an equality
of arms.
[20]
Significantly, s 131, under the heading ‘Repossession of
goods’, provides as follows:
‘
If a court makes
an attachment order with respect to property that is the subject of a
credit agreement, section 127(2) to (9) and
section 128,
read
with the changes required by the context
, apply with respect
to any goods attached in terms of that order.’ (My emphasis.)
This
section makes the aforesaid provisions applicable to the situation
where the credit provider took the initiative to repossess
the goods
sold in terms of a credit agreement. It can only do so after
fulfilling the prescribed steps set out in ss 127 and 129.
It is
distinct from the situation where a consumer initiates the
termination of the agreement and the return of the goods purchased.
[21]
The decision in
Edwards
v FirstRand Bank Ltd t/a Wesbank
[2016] ZASCA 144
;
2017 (1) SA 316
(SCA) appears to have turned on
whether or not the bank gave the requisite notice.
[4]
In
Edwards
,
this court stated that the Act is far from a legislative model of
elegance.
[5]
That, of course, is
true.
Edwards
,
however, is not authority for the proposition that the processes
prescribed in ss 127(2)-(9) are not applicable when goods
are
repossessed at the instance of a credit provider. Section 131, in
stark terms, states that they are.
[22]
The court below, in formulating para 20.4 of its order, did not fully
appreciate the architecture of the Act. More particularly,
it did not
have sufficient regard to the provisions of s 128, which allows for a
contestation in relation to a disputed sale of
goods. That
contestation can take place by direct engagement with the credit
provider, after referral of the dispute to the Tribunal,
or after the
submission of a complaint in terms of s 136 with the National
Credit Regulator.
[23]
It was agreed between Wesbank and the
amicus
that the order
that appears hereafter, in substitution of para 20.4 of the order by
the court below, gives practical effect to
the applicable provisions
of the Act.
[24]
Following on what is set out above, the following order is made:
1 The appeal is upheld to
the extent reflected in the substitution order set out hereafter, and
no order is made as to costs.
2 The order of the court
below is set aside and substituted as follows:
‘
20.1
Default judgment is granted as follows regarding the two Standard
Bank matters:
20.1.1 Cancellation of
the agreement in each case is hereby confirmed.
20.1.2 The return of the
following vehicles to the credit provider, Standard Bank, is ordered:
(a)
Ford Kuga 1.6 Ecoboost Trend bearing engine number DU86764 and
chassis number WF0AXXWPMADU86764;
(b)
2010 Audi A4
1.8T AMBITION (B8) bearing engine number CDH086852 and
chassis number WAUZZZ8K2AA141331.
20.1.3 Costs of R200,00
and Sheriff’s fees in the amount of R444,04 as prayed for by
Standard Bank against Mr Renier Venter
in paragraph 5 of the relief
sought.
20.1.4 Costs of R200,00
and Sheriff’s fees in the amount of R426,27 as prayed for in
paragraph 5 of the relief sought against
Mr Sipho David Maoshene (the
credit consumer) by Standard Bank.
20.2
Summary judgment is granted in favour of FirstRand Bank Limited
against Nicolaas Johannes Davel as follows:
20.2.1 Cancellation of
the agreement is hereby confirmed.
20.2.2 The return of the
following vehicle to the credit provider, FirstRand Bank, is ordered:
2010 Volkswagen Polo 1.6
Comfortline SE, engine number CLS056389 and chassis number
VWZZZ60ZBT044929.
20.2.3 The damages
component of the plaintiff’s claim is postponed
sine die
.
20.2.4 The defendant is
ordered to pay the plaintiff’s costs of suit.
20.3
Upon the return of each of the vehicles described in paragraph
20.1.2(a), 20.1.2(b) and 20.2.2 to each respective plaintiff:
20.3.1 The plaintiff
shall, within 10 business days from the date of receiving return of
the vehicle, give the defendant written
notice:
(a)
setting out the estimated value of the returned vehicle;
(b)
informing the defendant that it intends to sell the returned vehicle
as soon as practicable for the best price reasonably obtainable;
and
(c)
informing the defendant that the price obtained for the returned
vehicle upon its sale may be higher or lower than the estimated
value.
20.3.2 The plaintiff
shall sell the returned vehicle as soon as practicable for the best
price reasonably obtainable.
20.3.3 After selling the
returned vehicle, the plaintiff shall:
(a)
credit or debit the defendant with a payment or charge equivalent to
the proceeds of the sale less any expenses reasonably incurred
by the
plaintiff in connection with the sale of the goods; and
(b)
give the defendant a written notice stating the following:
(i) the settlement value
of the agreement immediately before the sale;
(ii) the gross amount
realised on the sale;
(iii) the net proceeds of
the sale after deducting the plaintiff’s permitted default
charges, if applicable, and reasonable
costs allowed under paragraph
(a); and
(iv) the amount credited
or debited to the defendant’s account.
20.3.4 The notice
referred to in paragraph 20.3.3(b) above shall state that:
(a)
If the defendant disputes the amount of the proceeds of the sale or
any other charges or expenses incurred, he or she may engage
directly
with the credit provider in relation thereto.
(b)
If the engagement referred to in (a) does not yield, from the
defendant’s perspective, the desired result, he or she may,
refer the dispute to the Tribunal or submit a complaint in terms of
s 136
of the
National Credit Act 34 of 2005
to the National
Credit Regulator.
20.3.5 If an amount falls
to be credited to the defendant’s account which exceeds the
settlement value immediately before
the sale of the returned vehicle,
the plaintiff must remit such excess amount to the defendant together
with the notice referred
to in paragraph 20.3.3(b) above.
20.3.6 If an amount is
credited to the defendant’s account which is less than the
settlement value before the sale, or an
amount is debited to the
defendant’s account, the plaintiff may demand payment from the
defendant of the remaining settlement
value in the notice referred to
in paragraph 20.3.3(b) above.
20.3.7 If the defendant
fails to pay the amount demanded in terms of paragraph 20.3.6 above
within 10 business days of receiving
such demand, the plaintiff may
commence proceedings against the defendant for any outstanding
damages.
20.3.8 The defendant
shall pay interest at the rate applicable to the credit agreement, on
any outstanding amount demanded by the
plaintiff in terms of
paragraph 20.3.7 above, from the date of the demand until the date of
payment of the outstanding amount.
20.3.9 In the notice
referred to in para 20.3.4, the consumer must also be notified, if
applicable, that if there is a dispute in
relation to any of the
matters set out in 20.3.5-20.3.8, the mechanisms referred to in
20.3.4(a)–(b) are at his or her or
its disposal.
20.4
The respective plaintiff shall aver and prove in its action for any
outstanding damages, that it has complied with the requirements
set
out in paragraph 20.3 above.’
________________________
MS
NAVSA
JUDGE
OF APPEAL
APPEARANCES:
FOR
APPELLANT:
R Hutton SC (with him C van Castricum)
Instructed by:
Fabricius &
Engelbrecht, Pretoria
MDP Attorneys,
Bloemfontein
FOR
RESPONDENTS:
No
appearance.
FOR
THE AMICUS:
C Hendriks
Instructed by:
University of the Free
State Law Clinic, Bloemfontein
[1]
Section 129(1)
(a)
of the National Credit Act 34 of 2005 (the Act) provides as follows:
‘
(1) 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’.
In
terms of s 130(1)(
a
) of the Act, a credit provider can only
proceed to court upon default by a consumer once ten business days
have lapsed after
a notice has been sent to the latter in terms of s
129(1)
(a)
.
[2]
In this regard, see the definition of ‘settlement value’
in s 1 of the Act; and the provisions of ss 127 and 131
on the
surrender and repossession of goods, respectively.
[3]
Paras 15-18.
[4]
Edwards
v FirstRand Bank Ltd t/a Wesbank
[2016] ZASCA 144
;
2017 (1) SA 316
(SCA) para 17.
[5]
Para 1.