IN THE KWAZULU-NATAL HIGH COURT, DURBAN
REPUBLIC OF SOUTH AFRICA

									         Not reportable

								         Case No : 5534/2010

In the matter between :

Firstrand Bank Limited t/a Wesbank					         Plaintiff

and

Valencia Adelaide Moodley						    Defendant

Judgment

Lopes J

[1]	This matter came before me on the expedited roll on the 29th November, 2010.  Pursuant to a summary judgment application brought by the plaintiff the usual order refusing summary judgment was granted and the matter was adjourned to the expedited roll.

[2]	The plaintiff instituted action against the defendant for an order :- 
(a)	confirming cancellation of an instalment sale agreement concluded between the parties on the 19th June, 2007;
(b)	 directing the defendant to return the subject matter of that agreement, a BMW X5.30D A/T motor vehicle (“the motor vehicle”);
(c)	 that the plaintiff, upon recovery of the motor vehicle, be given leave to apply on the same papers for judgment against the defendant for such amount that may be outstanding after the motor vehicle has been valued;
(d)	Costs of suit on the scale as between attorney and client.

[3]	The parties were agreed that the following facts are common cause :-
(a)	that the parties concluded an instalment sale agreement on the 19th June, 2007 in respect of the motor vehicle;
(b)	that the defendant fell into arrears with her monthly instalments in terms of the agreement; 
(c)	that the defendant made what is referred to as a first application for debt review on the 18th November, 2008; 
(d)	the first application for debt review was terminated at the instance of the plaintiff on the 3rd March, 2010 when it addressed letters purporting to do so to the defendant, the debt counsellor, and the National Credit Regulator;
(e)	at the time the first debt review application was made the defendant was married in community of property.  However, she and her husband were divorced on the 21st October, 2009;
(f)	thereafter, on the 14th April, 2010 the defendant made what is referred to as a second application for debt review; 
(g)	the defendant is a businesswoman;
(h)	the present action was instituted by the plaintiff on the 13th May, 2010. 

[4]	The defendant averred that in those circumstances the action should be stayed with the matter referred to a debt counsellor in terms of the provisions of subsec 85(a) read with subsec 86(7) of the National Credit Act, 2005 (“the Act”).

[5]	Mr Sitaram who appeared on behalf of the defendant submitted that the defendant had two defences to the action :-
(a)	firstly the debt counsellor in the first debt review had made an application to place the defendant under debt review and the plaintiff had not proved the arrangement and the cancellation thereof; and
(b)	after the first debt review was cancelled and the defendant became divorced, and when she made the application for the second debt review her status was that of a single person, whereas the first debt review had been made when she was married in community of property.  Because her status had changed she was entitled to make an application for a second debt review which had not been finalised at the time that the plaintiff instituted the action.

[6]	The first point was argued somewhat faintly by Mr Sitaram and in my view it has no merit.  I say this because in the plaintiff’s particulars of claim it made the allegation that the first debt review had been accepted by the plaintiff but that the defendant had failed to honour her obligations in terms of the restructured arrangement by making the necessary payments, and it was consequently cancelled.

[7]	In her summary judgment opposing affidavit the defendant does not dispute that the debt counsellor in respect of the first debt review made an agreement which was accepted by the plaintiff.   She simply contents herself with denying that she received notice of the cancellation of that agreement.  She does not deal in her summary judgment opposing affidavit with the allegation that she failed to comply with her obligations in terms of restructured arrangement.  She also says that the debt counsellor (Mr Neethling) did not forward to the plaintiff any notice of application in respect of the first debt review because her husband failed to pay the required fees and disbursements associated therewith.  She thereafter admits that the plaintiff terminated the debt review of what she refers to as the joint estate.  

[8]	Given the correspondence of the 3rd March, 2010 addressed to Mr Neethling,  the defendant, and the National Credit Regulator by the plaintiff, cancelling the first debt review application, I am left with no doubt that an arrangement was concluded and breached by the defendant, and that the plaintiff validly cancelled the first debt review application insofar as it related to the agreement.

[9]	What then of the second debt review application made by the defendant?  Does the fact that she did so in an altered status entitle her to disregard the cancellation of the first debt review by the plaintiff?

[10]	Mr Sitaram was unable to cite any authority for the proposition that the altered status of the defendant meant that she was entitled to make a subsequent application for debt review in respect of the same credit provider and the same credit agreement.

[11]	Mr Sitaram directed my attention to the provision of subsec 129(1)(b) which provides that subject to the provisions of subsec 130(2) of the Act, a credit provider may not commence any legal action to enforce a credit agreement before first providing notice to the consumer as contemplated in subsec 129(1)(a) or subsec 86(10) and meeting any further requirements set out in s 130.

[12]	Mr Combrinck for the plaintiff drew my attention to the contents of the first debt review application made by the defendant.  That application is, ex facie its contents, made by the defendant in respect of eight agreements, one of which is the agreement which she concluded with the plaintiff.  There is no indication in that application form that she applied together with her husband or that it was in respect of what may be described as debts of their joint estate.  She is described in the application as being self-employed.

S 86 of the Act provides for applications for debt review.  Subsec 86(2) provides that an application may not be made in respect of a particular credit agreement if, at the time of the application, the credit provider under that credit agreement has proceeded to take the steps contemplated in s 129 to enforce that agreement.  That is clearly what the plaintiff did and in the letters of the 3rd March, 2010 it purported to terminate the first debt review in terms of subsec 86(10) of the Act.

[13]	Significantly in those letters it refers to the application for debt review being dated the 21st October, 2009.  That the respondent sought a debt review agreement in respect of the first  debt review is clear from her affidavit.

[14]	Mr Combrinck cited the authority of BMW Financial Services (SA) (Pty) Ltd v Mudaly 2010(5) SA 610 (KZD) as authority for the proposition that the reference in subsec 86(2) of the Act to “steps” includes those in subsec 129(1)(b) of the Act.

[15]	Mr Combrinck further referred to the fact that any application in terms of s 86  is made in respect of a particular credit agreement and that section refers to steps to be taken by the credit provider of that credit agreement.

[16]	Mr Combrinck  further submitted that the fact that the first debt review application included the credit agreement which the defendant concluded with the plaintiff had the consequence that the termination of the debt review by the plaintiff entitled it to proceed with legal action against the defendant.

[17]	But what difference does the change in status of the plaintiff make? It is clear from the documentation that when she made application for the first debt review she did so in her personal capacity and not in any capacity relating to any joint estate which existed between her and her ex-husband.  The making of a further application once she had become divorced does not in my view place the credit agreement in any category different to that in which it existed when she made the first debt review application.  Even if I am wrong in saying that the first debt review application was made in her personal capacity, I do not see how the cancellation thereof entitles her to make a further debt review application simply because she has become single again.  The debt remains the same and the arrangement concluded pursuant to the first debt review, the breach of the conditions by the defendant, and the plaintiff’s cancellation of the arrangement remain and are unaltered by the defendant’s change of status.  

[18]	In all the circumstances the defences raised by the defendant cannot prevail.  I grant an order in terms of prayers (a), (b), (c) and (d) to the plaintiff’s particulars of claim.

Date of hearing : 29th November 2010 
Date of judgment : 10th December 2010 
Counsel for the Plaintiff : P J Combrinck (instructed by Ndamase Incorporated)
Counsel for the Defendant : V R Sitaram (instructed by Vasu Naidoo & Associates)