IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, GRAHAMSTOWN)

CASE NO. 3911 / 2017

In the matter between:

CANZIUS VAN BLOMMESTEIN 	First Plaintiff

CAROL ANN VAN BLOMMESTEIN 	First Plaintiff

and

EAST CAPE GAME PROPERTIES (PTY) LTD	First Defendant

KEVIN EKE	Second Defendant

BEVERLEY SHARON EKE	Third Defendant

JUDGMENT

BODLANI AJ
1.	The plaintiff caused a summons to be issued against the defendants claiming payment of a sum of R2 772 166.00 (two million, seven hundred and seventy-two thousand, one hundred and sixty-six cents). After delivery of the defendants’ notice of intention to defend, the plaintiff delivered notice of application for summary judgment.  I am called upon to decide whether or not to grant summary judgment in favour of the plaintiff against the second and third defendants because at the commencement of the hearing, I was informed from the bar that the parties had agreed that leave to defend the action should be granted in favour of the first defendant with costs, from the date of delivery of the first defendant’s opposing affidavit to the date of delivery of the first defendant’s heads of argument, to be borne by the plaintiff.
2.	According to the particulars of claim, on or about 02 June 2014 and at Port Elizabeth, the parties executed a written acknowledgment of debt and surityship pursuant to which the plaintiffs loaned and advanced a sum of R2 500 000.00 (two million, five hundred thousand rand) to the defendants. In relevant part, the written acknowledgment of debt and surityship agreement provides that:
“	And BEVERLEY SHARON EKE hereby binds herself in solidum with Kevin John Eke and East Cape Game Properties Pty Ltd. as Co Principal debtor as well as in her capacity as the wife of Kevin John Eke and Executor of his estate in the event of the death of Kevin John Eke (Hereinafter referred to as the “THE DEBTORS”). 
1.1	The Capital sum is repayable to the CREDITOR within 90 days from the day of notification that the creditor requires payment of the capital amount.
1.1.1 In the event of the death of the debtor then Beverly Sharon Eke hereby binds herself in her capacity as the Co Principle (sic) debtor and in her capacity as the wife of the debtor and the executor of the debtors estate to honour all the terms and conditions of this acknowledgement of Debt.
1.2.1	The loan shall bear interest at the prime overdraft rate charged by Standard Bank from time to time plus 2% (Two percent)
2	The DEBTORS undertake to make all payments to the CREDITOR at such place or to such person as the CREDITOR may notify the DEBTOR from time to time.
3	The DEBTORS acknowledge that should they fail to make any payment on due date or allow any judgment against him to remain unsatisfied for a period of more than 7 (SEVEN) days or commit any act of insolvency, the full balance of the aforesaid CAPITAL SUM including interest then outstanding shall become due and payable forthwith.”
3.	It appears from the summons that the plaintiffs demanded payment of the capital sum with interest of the 29 July 2014. On 08 August 2014, the defendants, represented by the second defendant acknowledged the demand and undertook to pay the capital sum and interest within 90 (ninety) days. When the defendants did not comply with the undertaking to pay the capital sum and interest within 90 (ninety) days, the plaintiffs issued the summons. In the exercise of is options in summary judgment applications, the first defendant put up an affidavit to oppose the summary judgment application. At some point the plaintiff was granted leave to deliver to the defendants a notice in terms of s 129(1)(a) of the National Credit Act, 2005 (Act No. 34 of 2005) (NCA). On the 23 March 2018 the second and third defendants supplemented their opposing affidavit to introduce a defence that deals with the case on their being co-principal debtors with the first defendant. In relevant parts, the defence stated in there separate but similar affidavits, in content, is as follows: 
“5.5.1 the Plaintiffs never registered as Credit providers, being obliged to do so as the loan carried interest and was therefore a credit agreement;
5.5.2	no credit assessment was carried out by the Plaintiffs and any loan to myself would therefore constitute reckless credit.
6.	In the circumstances I humbly submit that Summary Judgment should not be granted against me and that the matter should be referred to a Trial court to determine whether the plaintiffs were reckless in granting credit to me, and if so, what action should be taken in terms of Section 83(2) of the National Credit Act.
4.	The existence and signature of the acknowledgment of debt and surityship agreement by all the parties is not in dispute. It also cannot be disputed, at least on the papers, that the second and third defendants bound themselves as co-principal debtors with the first defendant for the latters’ indebtedness to the plaintiffs. Similarly, it is not in dispute that the agreement between the parties constituted a credit agreement as contemplated by s 8 of the NCA.
5.	It is trite that summary judgment will be refused if the defendant is able to demonstrate that it has a triable issue or a sustainable defence to the plaintiff’s claims. In Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture the summary judgment procedure was described as follows:
“The procedure is not intended to deprive a defendant with a triable issue or a sustainable defence of his/her 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 the 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 the 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.”
6.	In Maharaj v Barclays National Bank Ltd the Court stated that the full disclosure as used in the context of the Rule:
“It connotes, in my view, that, while the defendant need not deal exhaustively with the facts and the evidence relied upon to substantiate them, he must at least disclose his defence and the material facts upon which it is based with sufficient particularity and completeness to enable the court to decide whether the affidavit discloses a bona fide defence.”
7.	There is no averment in the particulars of claim that the plaintiffs are registered credit providers in terms of s 89(2)(d) of the NCA.  The plaintiffs were indeed obliged to register as credit providers in terms of the NCA before extending credit and making a loan with an aggregate principal debt in excess of R500 000.00 (five hundred thousand rand). The NCA provides that a person who is required to be registered as a credit provider, but who is not so registered, must not offer, make available or extend credit, enter into a credit agreement or agree to do any of those things. In terms of s 40(4) of the NCA, a credit agreement entered into by a credit provider who is required to be registered but who is not registered is an unlawful agreement and void to the extent provided for in section 89. In terms of s 89(2)(d), a credit agreement is unlawful if at the time the agreement was made the credit provider was unregistered and the NCA required the credit provider to be registered. In terms of s 89(5)(a) if a credit agreement is unlawful in terms of s 89 of the NCA, it is void as from the date the agreement was entered into.
8.	It follows that when an unregistered credit provider who is required to be registered lends money to a consumer he or she will have no contractual cause of action and will be obliged to sue the consumer under the law of unjustified enrichment, by means of the condictio ob turpem vel iniustam causa, to recover the money. Accordingly, the second and third defendants’ defence based on the plaintiffs’ failure to register as credit providers is a good defence and constitutes a triable issue between the parties. 
9.	In all the circumstances, I make the following order:
1.	The application for summary judgment is refused

2.	The first, second and third defendants are granted leave to defend.

3.	The plaintiff is directed to pay the first defendant’s costs of the summary judgment application, from the date of delivery of the first defendant’s opposing affidavit to the date of delivery of the first defendant’s heads of argument.

4.	The costs of the application for summary judgment in respect of the second and third defendants shall be payable in the action.

________________________
AM BODLANI 
ACTING JUDGE OF THE HIGH COURT

Counsel for the Plaintiff 		:	Mr. R. Quinn SC
Instructed by 			:	Messrs Whitesides
						Grahamstown

Counsel for the Respondent	:	Mr. J. Knott 
Instructed by				:	Messrs Dold & Stone Inc.
						Grahamstown

Date of hearing			:	27 March 2018 

Date of delivery of judgment	: 	03 April 2018