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[2013] ZAWCHC 175
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Changing Tides 17 (Pty) Ltd v Parish and Another (3006/2013) [2013] ZAWCHC 175 (18 November 2013)
REPUBLIC OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case no: 3006/2013
In the matter between
:
CHANGING TIDES 17
(PTY) LTD
.......................................................................
Plaintiff
v
ROY BRIAN PARISH
..............................................................................
First
Defendant
NOLENE LOUISE PARISH
...............................................................
Second
Defendant
Court
:
Judge J Cloete
Heard
: 18
November 2013
Delivered
:
18 November 2013
JUDGMENT
CLOETE J
:
This is an opposed
application for summary judgment. The plaintiff seeks orders against
the defendants for payment of the sums
of R301 038.12; interest
thereon at the rate of 9.2% per annum compounded monthly in arrears
from 11 February 2013
to date of payment; that the immovable
property purchased by the first defendant in 1999, being remainder
Erf 160882 Cape Town
at Epping be declared specially executable; and
costs on the scale as between attorney and own client.
The plaintiff’s
claims arise from a series of loans to the defendants. Payment of
these loans was secured by a system of
indemnities and guarantees
underpinned by two indemnity mortgage bonds registered over the
aforementioned immovable property
in favour of the plaintiff as
security for the defendants’ obligations in amounts not
exceeding R200 000 and R150 000
respectively.
It is common cause that
the defendants fell into arrears with their repayments. They applied
to a debt counsellor, Octogen, for
debt review on 13 July 2012.
The plaintiff was notified of this application on 17 July 2012.
The plaintiff was also
notified on 1 August 2012 that the
application to the debt counsellor had been successful.
On the same date the
debt counsellor sent a debt restructuring proposal to the plaintiff.
It was proposed that the variable interest
rate be fixed at 7.7% per
annum; that the total monthly instalment of approximately R4 009
(which includes service fees
and premiums totalling R939) be reduced
to R2 319 escalating at roughly 5% per annum; and that the term
of repayment be
extended from the remaining period of 138 months to
141 months. The revised monthly payments proposed, net of the
service fees
and premiums, would be R1 389 as opposed to the
stipulated instalment, again net of service fees and premiums, of
R3 079,
or roughly 45% of the stipulated amount excluding the
proposed annual 5% increase.
This proposal was
rejected by the plaintiff who made a counter-proposal on 29 August
2012 of R3 078 per month at a fixed
interest rate of 7.2% per
annum. The interest rate aforesaid was less than that proposed by
the defendants. After deduction of
the service fees and premiums of
R939 per month, the revised instalment would thus be R2 139 per
month, being about 69%
of the stipulated monthly instalment at the
time.
On 13 December 2012
the defendants, who were unable to afford the plaintiff’s
counter-proposal, informed their debt
counsellor that they could
increase their offer by R600 per month. This would thus be an
instalment of R2 919 per month,
and after deduction of the
service fees and premiums, an amount of R1 980 per month, just
R159 per month short of the plaintiff’s
counter-proposal. It
would appear that, due to no fault on the part of the defendants,
the debt counsellor may have failed to
communicate their revised
proposal to the plaintiff at that stage; however the papers reflect
that by 14 January 2013 the
plaintiff was well aware thereof.
Despite the paltry
difference between the plaintiff’s counter-proposal and the
defendants’ revised offer the plaintiff,
having terminated the
debt review on 3 January 2013, proceeded with summons which was
served on the defendants on 5 March
2013, two days before their
application for debt review was issued in the Goodwood Magistrate’s
Court under case no. 1625/13
on 7 March 2013. The plaintiff
alleged in its summons that as at 22 February 2013 the
defendants were in arrears with
their payments in the sum of
R34 852.29. The certificate of balance annexed to the
plaintiff’s summons does not bear
the signature of the
plaintiff’s duly authorised representative.
The plaintiff opposed
the defendants’ application in the magistrate’s court
and on 6 June 2013 it furnished the
defendants with a revised
proposal, namely that: (a) the arrears of R33 179 at that
stage be settled within three months;
and (b) the defendants pay
R4 560.98 per month with effect from 1 July 2013. The
defendants are unable to afford this.
The first defendant is
unemployed. The second defendant earns a monthly salary of R10 932
gross and R5 508 net. After
deduction of absolutely basic
expenses totalling R3 500, she is left with R2 008 per
month. This notwithstanding, the
defendants have managed to make
payments of R2 425 per month excluding additional ad hoc
payments totalling R10 000
which is effectively more than what
they initially offered in August 2012.
Since service of the
summons this matter has been postponed on no less than six
occasions, culminating in the parties appearing
before me today. As
I understand it, on certain of these occasions, the reason was to
determine the outcome of the application
in the magistrate’s
court. It will be self-evident that substantial costs have been
incurred as a result, all of which
the plaintiff seeks to recover
from the defendants on the punitive scale of attorney and own client
in accordance with the terms
of the loans.
On 23 August 2013
the presiding magistrate, Mr De Beer, postponed the debt review
application
sine die
and directed that it could be
re-enrolled for hearing if this court ordered that it be referred
back to that court for a determination
in terms of
s 86
(11) of
the
National Credit Act 34 of 2005
(‘
the NCA’
).
In
Standard Bank Ltd
v Munsamy
[2013] ZAWCHC 13
(14 February 2013) the court said the
following at para [16]:
‘
It is
common ground that in terms of
s 86(11)
this court (and not only the
magistrate’s court) has the jurisdiction to order that the debt
review… be resumed. There
is no closed list of factors
relevant to the exercise of this discretionary power though the
considerations which a court would
typically need to assess would
include whether the credit provider engaged in the debt review
process in good faith and whether
there are reasonable grounds to
believe that the debt review, if it were resumed, might result in an
agreement or rearrangement
order in terms whereof the credit
provider’s claim will be satisfied.’
It is my view that the
history of this matter shows that the plaintiff has failed to engage
in the debt review process with the
defendants in good faith. It has
adopted a high handed and unreasonable approach. Indeed, thousands
of rands of legal costs could
have been avoided if the plaintiff’s
representatives (and I emphasise that here I am not referring to
their legal representatives)
had simply applied their minds to the
fact that, as at January 2013, the parties were apart on their
respective proposals in
an amount of only R159 per month.
There can also be no
suggestion that the defendants have shown disregard for the
financial predicament in which they find themselves.
When they
initially applied for debt review in July 2012 they had only two
creditors, one of which, according to the defendants,
has now been
paid in full. This leaves only the plaintiff and indeed the
defendants have tendered an additional R105 per month
on account of
the sum due to the plaintiff.
[14] I thus make the
following order:
1. The debt review
pending in the Goodwood Magistrate’s Court under case no.
1625/13 shall be re-enrolled on a date convenient
to Magistrate De
Beer for purposes of determining the defendants’ application in
terms of
s 86(11)
of the
National Credit Act 34 of 2005
in
respect of their indebtedness to the plaintiff.
2. The plaintiff’s
application for summary judgment is postponed
sine die
pending the outcome of the application in the Goodwood
Magistrate’s Court. The plaintiff is granted leave to file a
supplementary
affidavit to inform this court in due course of the
outcome of the debt review application.
3. Costs shall stand
over for later determination.
______________
J I CLOETE