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Absa Bank Ltd v Duma (3848/12) [2013] ZAECGHC 56 (1 January 2013)

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NOT REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

(EASTERN CAPE DIVISION, GRAHAMSTOWN)


CASE NO: 3848/12

IN THE MATTER BETWEEN:


ABSA BANK LIMITED ...........................................................APPLICANT/PLAINTIFF

AND

MZWANDILE LEONARD DUMA .................................RESPONDENT/DEFENDANT


Coram: Lowe AJ

Date Heard:

Date Delivered:

Nature of matter: Application for summary Judgment; cancellation of a written instalment sale agreement together with immediate delivery to it and repossession of a certain motor vehicle a 2008 Quantum 2.7 Sesfikile 14 S motor vehicle

Order: The application (made from the bar) purportedly in section 86 (11) of the NCA is dismissed; Summary judgment is granted; cancellation of the instalments sale agreement is confirmed; ordered forthwith to return to the plaintiff the 2008 Quantum 2.7 Sifikile 14 S with engine no 2TR8168805 and chassis no JTFSX22p606053042 failing which the sheriff is authorised to attach the vehicle wherever he may find same to hand the vehicle back to the plaintiff; plaintiff is given leave to approach this court for an order enforcing the remaining obligations of the defendant in terms of the said agreement.


Defendant is ordered to pay the costs of suit



JUDGMENT


LOWE, AJ:


[1] This is an application for summary judgment in which the plaintiff seeks payment of the sum R255 440.90, cancellation of a written instalment sale agreement, together with immediate delivery to it and repossession of a certain motor vehicle been a 2008 Quantum 2.7 Sesfikile 14 S motor vehicle (“the motor vehicle”).


[2] The plaintiff has alleged in its summons that on 12 November 2008 plaintiff entered into a written instalment sale agreement (“the agreement”) with the defendant. In terms of the agreement plaintiff sold and delivered the motor vehicle to the defendant.

[3] The agreement provided for a total sale price of R244 200-00 defendant paying a deposit leaving a principle debt of R193 760-00 which with finance charges was a total amount of R309 295-26.


[4] The agreement provided for fifty two monthly instalments of R5 974-76 each, payable from 1 January 2009 to 1 June 2013. The agreement further provided for ownership of the motor vehicle to remain vested in plaintiff until the defendant had paid all amounts under the agreement. In the event that the defendant failed to pay any amount which became due to plaintiff, plaintiff would be entitled to cancel the agreement, take possession of the motor vehicle, sell same and retain all payments already made. In addition plaintiff would be entitled to claim the remaining balance payable from the defendant as damages.


[5] As an alternative plaintiff was entitled to claim immediate payment of the total balance of the purchase price and any other amounts payable by the defendant in terms of the agreement.


[6] The plaintiff pleads that the defendant has breached the agreement in that he is in arrear with the required instalments in an amount of R153 372-68 as at 12 December 2011. The plaintiff does not refer to nor rely upon a certificate as prima facie proof of the sum owing in terms of the agreement, seeking cancellation of the agreement and repossession of the vehicle.

[7] Presumably realising his predicament defendant alleges that he applied for debt review in terms of section 86 of The National Credit Act, 34 of 2005 (“the NCA”). The agreement it is said was included in the debt review.


[8] The plaintiff alleges that it gave notice to the defendant that it was terminating the debt review process in terms of section 86 (10) of the NCA. He was advised of his entitlement in terms of the Act and it is alleged that the 10 day notice period required by section 86 (10) elapsed prior to issue of summons.

[9] It is thus that plaintiff’s present main claim is for the return of the motor vehicle with an alternative claim for summon of R252 444-90 the exact makeup of which is not clearly set out in the summons (originally the main claim).

[10] In his affidavit resisting summary judgment defendant refers to the fact that on 11 August 2009 he applied for debt review with Derry Burge Consulting CC in terms of section 86 of the NCA alleging that a debt rearrangement plan was agreed whereby he would pay an amount of R3 000-00 per month via the payment distribution offices of Hannatjie van der Merwe Inc trading as Consumer Protection Excellence.

[11] In support of this he attaches not a debt rearrangement plan but a receipt from Derry Burge Consulting CC of an application for debt review in terms of section 86, which fails to set out a date when the defendant applied for debt review but which is dated and signed 11 August 2009.

[12] The agreement allegedly concluded between defendant and Hannatjie van der Merwe Inc is similarly dated 11 August 2009 appointing Hannatjie van der Merve Inc as a “PDA” to receive monies from the defendant in terms of a debt rearrangement in terms of the NCA and to distribute these monies to credit providers in accordance therewith. This is not signed by the PDA.


[13] Apart from maintaining under oath that he has in accordance herewith paid regular monthly instalments of a minimum of R3 000-00 per month from 1 September 2009 in the total sum of R124 000-00 (referred to in a schedule to the summary judgment affidavit,) the defendant fails to annex any debt rearrangement plan, nor is there any affidavit or supporting documentation from either Derry Burge Consulting or Hannatjie van der Merwe Inc. There is further no explanation for the absence hereof or of any attempts to obtain same.

[14] The defendant concedes that he did not object “directly” in writing to the notice terminating the debt review process alleging that the debt review process had resulted in an agreed rearrangement plan in which the defendant alleges he fully complied. Subsequently summons relevant to the above claim issued out of the Fort Beaufort Magistrates court (plaintiff against defendant) which so it is alleged was withdrawn costs tendered and which defendant thought was the end of the matter.


[15] That defendant made the payments referred to is supported by copies of bank documentation in each instance and the notice of withdrawal of the action in the Fort Beaufort’s Magistrates court is attached.


[16] Defendant concludes that he does not owe the amounts claimed and that he has met all his commitments in terms of the debt rearrangement process.


[17] As I have already said, unfortunately, there is nothing else in the affidavit to support his conclusion that there was in fact a debt rearrangement plan concluded or approved in terms of section 86 (7) –(9) of the NCA.

[18] In the face of this, plaintiff persisted in its claim for summary judgment.


[19] Summary judgment proceedings are governed by the provisions of rule 32 of the Uniform Form Rules of court. The procedure for summary judgment has been the subject of many decisions over a lengthy period of time and is well known.


[20] It has frequently been described as “extraordinary”. The entire procedure was recently considered in the Supreme Court of Appeal in Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture 2009 (5) SA 1 of (SCA) at 11 G – 12 D where the following is stated:


The rationale for summary judgment proceedings is impeccable. The procedure is not intended to deprive a defendant with a triable issue or a sustainable defence of her/his day in court. After almost a century of successful application in our courts, summary judgment proceedings can hardly continue to be described as extraordinary. Our courts, both of first instance and at appellate level, have during that time rightly been trusted to ensure that a defendant with a triable issue is not shut out. In the Maharaj case at 425G - 426E, Corbett JA was keen to ensure, first, an examination of whether there has been sufficient disclosure by a defendant of the nature and grounds of his defence and the facts upon which it is founded. The second consideration is that the defence so disclosed must be both bona fide and good in law. A court which is satisfied that this threshold has been crossed is then bound to refuse summary judgment. Corbett JA also warned against requiring of a defendant the precision apposite to pleadings. However, the learned judge was equally astute to ensure that recalcitrant debtors pay what is due to a creditor.


Having regard to its purpose and its proper application, summary judgment proceedings only hold terrors and are ‘drastic’ for a defendant who has no defence. Perhaps the time has come to discard these label and to concentrate rather on the proper application of the rule, as set out with customary clarity and elegance by Corbett JA in the Maharaj case at 425G – 426E”


[21] The rule simply requires of a defendant, seeking to resist summary judgment, to set out the nature and grounds of the defence and facts upon which it is based with sufficient clarity to satisfy the court of its bona fides. The facts so set out must make out a defence which is good in law. If these requirements are satisfied summary judgment will be refused.


[22] In this matter it is not in dispute that the defendant was in default of his obligations under the agreement, no contractual defence is raised by defendant and on those facts plaintiff was entitled to cancel the agreement. The entire defence centres around reliance upon the provisions of the NCA as summarised above and the purported conclusion of debt review arrangement and compliance therewith.


[23] As I have already commented, there is no explanation by defendant as to the lack of detail relevant to the alleged conclusion of a debt rearrangement plan and indeed the documents annexed fail to support this assertion.


[24] The principle is trite that defendants opposing affidavit is not to be assessed with the precision of a plea. The defendant of course must go beyond the mere formulation of disputes and must disclose the grounds upon which the dispute rests, with reference to the material facts underlying the disputes raised. Breitenbach v Fiatsa (EDMS) Bpk 1976 (2) SA 226 at 228 B-C. It is thus that an arguable defence passes the test.


[25] It is frequent that an evaluation of the defendants opposing affidavit requires a consideration not so much of what the defendant said but of what defendant failed to say. Cassim Brothers (Pvt) Ltd v Cassim 1964 (1) SA 651 (SR) 653 B. The defendant requires to disclose sufficient particularity to allow the court to judge that the opposing affidavit in fact discloses a bona fide defence. Maharaj v Barclays National Bank Limited 1976 (1) SA 418 (A) 426 C – D . Whilst the defendant must not be vague or laconic he need not prove his defence to the same extent as in an application.


[26] On what is before me, there is no doubt whatsoever that even if a debt rearrangement agreement had been entered into or sanctioned (which seems highly doubtful), and in respect of which there is wholly insufficient set out, the very annexures said to be in support thereof fail to bear this out. As commented by Davis J in First Rand Bank v Adams 2012 (SA) 14 (WCC) at 17 G - H the judgment in Changing Tides 17 (Pty) Ltd v Grobler and Another (2011) ZAGPPHC 84 (North Gauteng High Court unreported 2011), discloses a luminous exposition of the relevant provision and is extremely useful in determining the powers which a court has to deal with an application in terms of section 86 (11) of the NCA.


[27] It is significant that annexures C, D and E to the summons (which allege that the debt review process was terminated) refer not to a debt rearrangement plan, but to default in terms of the agreement (“the credit agreement”) and gives notice of termination of the debt review process.


[28] This is indeed what section 86 (10) envisages, providing that this can occur at any time at least 60 days after the date on which the consumer applied for debt review (which is certainly so in this matter) the credit provider giving notice to terminate the review in the prescribed manner.

[29] The importance of whether or not the debtor is in default of the credit agreement in respect of rule 86 (10) is highlighted in Collett v First Rand Bank 2011 (4) SA 508 (SCA) which holds that where a consumer is in default a credit provider may enforce the agreement once the debt review is terminated in terms of the section. (See Collet at para 12). In the light hereof, Murphy J held in Changing Tides (supra) para 18 that once a debt review has been terminated under section 86 (10) and the credit provider seeks to enforce the agreement either in the High or Magistrates Court (as is the case in this matter), such court may order the debt review to resume in terms of section 86 (11).


[30] In this matter the debtors allegation that there is a debt rearrangement plan agreed to (or sanctioned), must be seen in the light of section 86 (7), (8) and (9)of the NCA.


[31] If the consumer is over-indebted the debt counsellor may issue a proposal recommending inter alia that the magistrates court make an order that one or more of the consumers obligations be rearranged in a number of ways and if such recommendation is made, and this is agreed between the consumer and each credit provider concerned, this is recorded in the form of an order and filed as a consent order in terms of section 138, alternatively, if this is not agreed, the debt counsellor must refer the matter to the Magistrates Court with the recommendation.


[32] There is, in my view, wholly insufficient in the opposing affidavit, for there to be any possibility that I might conclude that sufficient has been disclosed in the opposing affidavit to establish that the debt review process led to the conclusion a sanctioned debt rearrangement or agreement.


[33] This being so, it follows that it was open to plaintiff to terminate the review process in the prescribed manner.


[34] As this seemed apparent during argument, I proposed that counsel address me after a suitable adjournment on the issues raised by section 86 (11) of the NCA.


[35] Both counsels did so referring to some of the available relevant authorities.


[36] In this regard is should be pointed out that in terms of section 129 (1) of the NCA and subject to section 130 (2) thereof, the credit provider may not commence any legal proceedings to enforce the agreement before inter alia first providing notice to the consumer as contemplated in section 129 (1) (a) or section 86 (10) as the case may be.


[37] In this matter summons was served after notice in terms of section 86 (10).


[38] As I understand the reasoning of the SCA in Collett and as pointed out by Murphy J in Changing Tides (supra) [para 24] the purpose of section 86 (10) is to give a defaulting consumer a 60 day period of grace to attempt to resolve the dispute. Failing that the credit provider may enforce the agreement and only the court seized with enforcement may resume the debt review process. The bar to enforcement proceedings enacted in section 129 continues only until inter alia section 86 (10) notice has been provided. If the debt review has been terminated and if there is no rearrangement order in existence (which seems clearly the case nor is this sufficiently clearly alleged) providing defences under section 130 (4), the credit provider may enforce the agreement if it has complied with section 86 (10).


[39] In this regard one must bear in mind that in terms of section 130 (4) of the NCA, a credit provider may not enforce a credit agreement if it is suspended subject to a debt rearrangement order or agreement and the consumer has complied with that order or agreement. As I have said in this matter, I have concluded that their is wholly insufficient in the opposing affidavit to establish either of the above, this notwithstanding defendants regular payments which apparently on the summons have not reached applicant.

[40] However and as I put to counsel and on the basis of the reasoning adopted by Murphy J (Changing Tides: supra) a court in a position similar to this matter can decide whether there is any benefit to postponing an application for summary judgment in order to determine the advantages of a further debt review. In order to do so I would have to take into account inter alia the nature of the dispute, the manner of participation of both parties in negotiations (that is that they acted in good faith in an attempt to resolve the outstanding obligations) and, further, the prospect of a rearrangement within the parameters of the NCA ensuring the discharge of the obligation. First Rand Bank v Adams (supra) para [20].


[41] It is worth stating, in this matter, that this fact or possibility was not raised or referred to in the opposing affidavit. Counsel for defendant through no fault of his own was driven at a late stage by my questions to suggest from the bar that this would be appropriate.


[42] There is, of course, a discretion available to the court having regard to the extraordinary nature of summary judgment to mero motu consider whether to adjourn a summary judgment application affording a consumer an opportunity to provide an argument that the debt review should be resumed alternatively to consider such resumption on further facts to be presented. At the hearing of the matter counsel for defendant was unable to take this aspect of the matter any further on the facts.


[43] I am of the view as was pointed out by Davis J in Adams (supra) that there must be a balance struck between the interest of the consumer and the interest of the credit provider. Were it otherwise Davis J points out that the entire system of credit provision in this country would either collapse or be subjected to significantly increased cost as the credit providers seek to recoup the consequent risks of an unregulated or disproportionate dispensation. In this regard see also Binns-Ward J in Absa Bank v Petersen case no 934/2011 (unreported).


[44] In the circumstances, on what is before me, I am unable to conclude that I should either postpone the matter to enable details to be furnished in further affidavits relevant to section 86 (11) or that on the facts before me it would be appropriate to do so.


[45] Whilst I have given considerable thought to the fact that it would seem that the debtor has faithfully complied with what he thought was a sanctioned debt rearrangement proposal, I am unable to conclude that this met the requirements of section, 86 (7), (8) and (9).


[46] As stated by Malan J in Collett (supra) where there are good grounds to conclude that the proposed restructure will not lead to the satisfaction by the consumer of all responsible financial obligations the court considering the resumption of the debt review may very well refuse same. One would have to have regard inter alia to the consumer’s financial needs, prospects and obligations. It is incumbent upon a party who seeks invoking section 86 (11), even in summary judgment proceedings (Collett 518 H - 519 A), to place sufficient information before the court to show that it should exercise a discretion in his favour. Information regarding the consumer’s financial position is crucial. There must be good grounds for doing so which are absent on the papers in this matter.


[47] It is thus unnecessary for me to deal with the issue raised by Swain J in First Rand Bank Ltd v Pillay case no 11978/2010 (unreported) in which the learned judge suggested that consequent upon the defendants right to retain possession of the vehicle being terminated by cancellation of the instalment sale agreement, having given notice in terms of section 86 (10), this right cannot be restored to the defendant by an order directing that the debt review process be resumed and that the claim in terms of section 86 (11) for resumption of debt review can only arise in respect of any claim the plaintiff may advance in the future for the payment of the shortfall in the amount owed by the defendant in terms of the cancelled agreement after determination of the value of the repossessed vehicle.


[48] For these reasons I make the following order:


48.1 The application (made from the bar) purportedly in section 86 (11) of the NCA is dismissed.


48.2 Summary judgment is granted in favour of the plaintiff in the following terms:


48.2.1 The plaintiff’s cancellation of the instalments sale agreement is confirmed.


48.2.2 The defendant is ordered forthwith to return to the plaintiff the 2008 Quantum 2.7 Sifikile 14 S with engine no 2TR8168805 and chassis no JTFSX22p606053042 failing which the sheriff is authorised to attach the vehicle wherever he may find same to hand the vehicle back to the plaintiff.


48.2.3 The plaintiff is given leave to approach this court for an order enforcing the remaining obligations of the defendant in terms of the said agreement.


48.2.4 The defendant is ordered to pay the costs of suit including the costs of the application for summary judgment.


[49] This order is given in the light of plaintiff’s counsel’s request only for an order in terms of paragraphs d and c of the notice of application for summary judgment with a costs order on the ordinary scale.






_________________________

M.J. LOWE

ACTING JUDGE OF THE HIGH COURT
















Obo the Applicant/Plaintiff: Adv Kaiser

Instructed by: Russell Incorporated

C/O Wheeldon Rushmere &Cole

119 High Street

Grahamstown


Obo the Respondent/Defendant: Adv Watt

Instructed by: Bululu Nabo & Xaso Attorneys

C/O Mili Attorneys

110 High Street

Grahamstown