IN THE HIGH COURT OF SOUTH AFRICA
 (WESTERN CAPE HIGH COURT, CAPE TOWN)

Case No 11766/2010

In the matter between:

THE STANDARD BANK OF SOUTH

and

CLOETE, AJ

INTRODUCTION

[1)   This is an opposed application for summary judgment.

[2] On 28 June 2010 the plaintiff instituted action against the defendants (who are married to each other in community of property) jointly and severally for (a) payment of the sum of R530 033.03; (b) interest thereon at the rate of 8.8% per annum as from 21 June 2010 to date of payment; (c) an order declaring the immovable property registered in the names of the defendants (being remainder Erf 15347 Parow) executable for the aforesaid amounts; and (d) costs of suit on the scale as between attorney and client.

[3] The defendants delivered a notice of intention to defend and the plaintiff then applied for summary judgment which was set down for hearing on 13 August 2010. The defendants delivered an affidavit in opposition to the summary judgment application and after a postponement on that date the matter was further postponed for hearing on the semi-urgent roll, when it came before me

[4] It should be mentioned that applications by the defendants for condonation for late filing of their affidavit and late filing of their heads of argument were granted by agreement between the parties.

[5] The relevant paragraph of plaintiffs summons reads as follows (the reference to the "NCA" is to the National Credit Act no 34 of 2005):

[6]   The defences raised by the defendants are the following:

(b) The plaintiff failed to inform the court of the circumstances under which the debt review process was terminated, and it is on the basis of these circumstances that the defendants contend that the plaintiff was not entitled to terminate the debt review process and to institute proceedings against them.
(c) Even if I find that the debt review process was validly terminated, this court should exercise its discretion in favour of the defendants and order that the debt review must resume (again, in light of the circumstances alleged by the defendants).

ISSUES TO BE DETERMINED

[8] What must be determined is if any of the following constitute bona fide defences as envisaged in Rule 32(3)(b) of the Rules of Court;
(a) Whether the allegations by the plaintiff in its summons that it had complied with the provisions of the NCA and in particular the provisions of s86(10), 129(1)(b)(i) and 130 thereof, constitute compliance with the notice requirements of the NCA to terminate the debt review process.
(b) Whether termination of the debt review process in the circumstances alleged by the defendants constitutes valid termination entitling the plaintiff to have instituted legal proceedings.
(c) If the plaintiff is found to have validly terminated the debt review process, whether I should exercise my discretion in favour of the defendants and order the resumption of the debt review process.

WHETHER THERE WAS COMPLIANCE WITH THE NOTICE REQUIREMENTS OF THE NCA TO TERMINATE THE DEBT REVIEW PROCESS

[10] The defendants do not deny delivery of the notices in terms of s129 and 130 of the NCA but deny delivery as required by s86(10) thereof. As set out above, the defendants aver that the plaintiff also failed to allege in its summons that it delivered such notices of termination to all relevant parties as contemplated by the NCA.

[13] Section 86(10) provides that:

(a) the consumer:
(b) the debt counsellor; and
(c) the National Credit Regulator,
at any time at least 60 business days after the date on which the consumer applied for the debt review' (My emphasis.)

[19] In the instant matter:

2010.

(c) At the date when plaintiff instituted action against the defendants, practice note 33 of the Consolidated Practice Notes of this division provided that:

'(1) In any action instituted in terms of the National Credit Act 34 of 2005 (the Act), the summons or particulars of claim must allege that there has been compliance with the relevant provisions of sections 127. 129 and 131 (as the case may be), read with section 130 of the Act.
(2) In order to satisfy the court of the matters referred to in section 130{3) of the Act. an affidavit by the credit provider must be filed when judgment is applied for.'

(d) Prior to the hearing of this matter the plaintiff filed an affidavit of compliance as envisaged in terms of practice note 33(2) from which it is clear that it had indeed fully complied with the provisions of s86(10).

[22] I accordingly find that the first defence raised by the defendants must fail.

WHETHER THE PLAINTIFF WAS ENTITLED TO TERMINATE THE DEBT REVIEW PROCESS

[28] For ease of reference a blank form 17.2 is reproduced hereunder:

NCR Form 17.2

(On the letterhead of the debt counsellor)

of each credit provider listed in application for debt review)

AND TO:   (An individually addressed notification must sent to each registered credit bureau)

FROM:    	Name of Debt Counsellor...........................................................
NCR registration number............................................................
Address 	…................................................

Contact Number..........................................................................

DATE:	….....................................................................................................
Full name of Consumer	…........................................
Identity number of Consumer.................................................

This notice serves to advise you that

I i
(a) the abovementioned consumer's application for debt review was rejected in terms of Section 86(7)(a) of the National Credit Act 34 of 2005: or
(b) the abovementioned consumer's application for debt review was successful and the debt obligations are in the process of being restructured; or
(c) the abovementioned consumers debt obligations have been restructured and a court/Tribunal order has been issued, the details of which are as follows:

All credit bureaus are advised to update the abovementioned consumer's record, within 5 days of receipt of this notice, as set out above

Debt Counsellor

[29] In the instant matter the court is left in the dark as to whether the outcome of the defendants' debt review application falls under (b) or (c) on Form 17.2 above

[30] The only indication is to be found at the following portion of the defendants' opposing affidavit (the reference to the 'respondents" is a reference to the defendants):

The facts pertaining to our default are as follows: The Respondents indeed did default on one single payment to the Plaintiff in terms of the Debt review process The Respondents were advised by Mr Mouwers at the time that the Respondents are allowed by law to default on one payment during the course of being under debt review. At the time the Respondents believed this information to be correct in law. It is on the strength of this one single default that the Plaintiff has sought to "terminate'' the debt review process.'

[31] However, even if the defendants were subject to debt review in terms of s86(8)(a) as read with s138, it seems that this might not assist them.

'(a) the consumer is in default under the credit agreement; and (b) one of the following has occurred:

[33] Accordingly, irrespective of whether the defendants had entered into a debt restructuring arrangement with their creditors as provided for in s86(8)(a) as read with s88(1)(c), the plaintiff may well have been entitled to terminate the debt review process and to institute proceedings against the defendants since, on their own version, the defendants had defaulted on their payment arrangement.

[34] However, I do not believe that it would be appropriate to make any specific finding in this regard for the following reasons:

(a) the plaintiff clearly relies on s86(10) and not on s88(3) to terminate the debt review process;

WHETHER THIS COURT SHOULD EXERCISE ITS DISCRETION IN FAVOUR OF THE DEFENDANTS AND ORDER THE RESUMPTION OF THE DEBT REVIEW PROCESS

[36] As there is no evidence that the defendants were placed under debt review by a magistrate, there is presumably no debt review which can be resumed in the magistrate's court in terms of s86(11) of the NCA.

[37] The defendants must thus rely upon the provisions of s85 of the NCA, which are as follows:

'85 Court may declare and relieve over-indebtedness

Despite any provision of law or agreement to the contrary, in any court proceedings in which a credit agreement is being considered, if it is alleged that the consumer under a credit agreement is over-indebted, the court may -
Despite any provision of law or agreement to the contrary, in any court proceedings in which a credit agreement is being considered, if it is alleged that the consumer under a credit agreement is over-indebted, the court may -
(a) refer the matter directly to a debt counsellor with a request that the debt counsellor evaluate the consumers circumstances and make a recommendation to the court in terms of section 86(7); or
(b) declare that the consumer is over-indebted, as determined in accordance with this Part, and make any order contemplated in section 87 to relieve the consumer's over-indebtedness.'

[40] In the instant matter not a single piece of financial information has been placed before me by the defendants. All that this court has is the allegation that the defendants were assessed to be over-indebted in January 2008, more than three years ago.

'[38] To avoid summary judgment a defendant wishing to satisfy the court by affidavit that he has a bona fide defence to the action, shall disclose' fully the nature and grounds of the defence and the material facts relied upon therefore (rule
32(3)(b)).

[41] Counsel for the plaintiff submitted that the defendant had fallen short of what was required of him.

[42] The court then considered whether a case had been made out for relief in terms of s85, and found that it had not. The court set out the position as follows at 372E-373B:

CONCLUSION:

1)	The application for summary judgment is refused.
2)	
3)	Costs shall stand over for later determination.