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IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT, CAPE TOWN)

Case Nos: 6465/2010 & 1082/2010

In the matter between:

GARY IVAN HEUNIS …...........................................................................First Applicant

MAGRIETA KRISTINA HEUNIS …........................................................Second Applicant

and

ABSA BANK LIMITED …............................................................................Respondent

JUDGMENT DELIVERED 4 MARCH 2011

ALLIE, J

[1] The applicant brought an application for leave to appeal against the judgment delivered by this court on 6 December 2010. The bases for seeking leave to appea, are contained in the notice as follows:

"1.1 The court erred and/or misdirected itself in dismissing the applicants' application to set aside the Summary Judgment granted against them in their absence, with costs, on the basis:

1.1.1 that applicants did not have a bona fide defence to the mehts of respondent's claim;

1.1.2. that applicants did not avail themselves of the remedies afforded to them by the National Credit Act 34 of 2005 ("the NCA") timeously, i.e. before the action was instituted;

1.1.3. that the NCA does not compel a credit provider to allow a consumer to reinstate the credit agreement by paying the overdue amounts after action has been instituted pursuant to sending out a Section 129( 1) notice to which the consumer did not respond.

[2] Regarding the bona fide defence to the merits of respondent's claim at Summary Judgment stage, the court erred and/or misdirected itself as follows:

2.1 by not finding that Summary Judgment being a discretionary remedy, would not have been granted against applicants had the application been opposed on the basis of the facts set out in applicants' affidavits filed of record,

given the following:

2.1.1. applicants failed to pay only 3 of the monthly instalments due to respondent bank in terms of the credit agreement;

2.1.2. applicants are and were willing and able to bring the arrears payments (approximately (R60 000) up to date, and to sustain them, and have paid every subsequent instalment (Bundle "B", p. 8 par. 14 and p. 59 par. 18.4). Respondent bank was in fact informed of this before the applicants fell into arrears (Bundle "B'\ p. 7 par 13);

2.1.3 applicants did not receive the respondent bank's Section 129 notice due to circumstances beyond their control, and were neither placed in mora, nor were they informed of the remedies afforded to them by the NCA. before summons was issued against them.

2.2. By not finding that the court heahng the Summary Judgment Application would have granted an Order in terms of Section 130(4)(b) of the NCA. adjourning the matter before it (with an appropriate costs order) and making an order setting out the steps the respondent bank had to complete before the matter could be resumed, allowing the applicants recourse to, and completion of, the remedies referred to in Section 129(1)(a) of the Act

2.3. By not finding that the granting of Summary Judgment against applicants under these circumstances would result in gross injustice to the applicants since:

2.3.1. applicants are seeking an opportunity to bring the payments under the credit agreement up to date, as contemplated in Section 129(1)(a) of the NCA;

2.3.2. applicants were deprived of this opportunity simply because they did not receive the Section 129 notice due to circumstances beyond their control:

2.3.3. summary judgment in the amount of R1.5 million will be executed against applicants' immovable property, which is worth R5 million, after default in an amount of only about R60 000.00. which default applicants are willing and able to purge;

2.3.4 there can be no prejudice to the respondent bank if the applicants are allowed to purge their default, (see Firstrand Bank Ltd v Collett 2010 (6) SA 351 (ECG) par 46 and Breitenbach v Fiat SA (Edms) BPK 1976 (2) SA 226 (T) at 229H)

[3] The court erred and/or misdirected itself in finding that applicants did not avail themselves of the remedies afforded to them by the NCA temeously. since:

3.1. applicants did not receive the Section 129 notices due to circumstances beyond their control;

3.2. applicants could therefore not have availed themselves timeously of remedies they were not aware of.

[4] The court erred and/or misdirected itself in not considering the fact that respondent bank failed to disclose applicants' attorneys' letter dated 8 February 2010 (Bundle "S", Annexure ~GIH3\ p 17 - 19) to the court at the heahng of the Summary Judgment application. Respondent bank was informed in this letter that any Summary Judgment application brought against applicants would be opposed.

[5} The court furthermore erred and/or misdirected itself in finding that applicants did not attach an affidavit by the attorney, whose offices were used as their service address, confirming that they had sent the application for summary judgment to the incorrect facsimile number. The affidavit is found on pages 77 and 78 of the record under Case Number 6465/2010.

[6] The court further erred and/or misdirected itself in not finding that respondent banks Section 129 notice, annexed to its Particulars of Claim p 29 - 36). in any event did not comply with the provisions of Section 129, as it does not specify the arrears, and in not finding that a Section 129 notice will only comply with the NCA if it specifies the arrears, enabling the consumer to bring the payments up to date. Its purpose is to provide a consumer with information about his default and a remedy.

[7] The court further erred and/or misdirected itself in not finding that respondent bank's Particulars of Claim are excipiable, in that it does not allege cancellation of the credit agreement"

[8] On behalf of the respondent it was argued that the Section 129 notice was duly sent to the consumer and that the applicant did not react to the notice and they therefore did not purge their default. In short il was argued that they had not made certain payments and according to the terms of the agreement, the full amount became due and payable and this term is referred to as the lex commissoria. It was further advanced on behalf of respondent that as applicant had failed to respond the Section 129 notice, it was entitled to enforce the credit agreement.

[9] It was further argued on behalf of the applicant that the applicant had elected not to purge their default and they cannot claim that they are entitled to a reinstatement of the agreement

[10] I am of the view that to the extent that the Section 129(1) notice did not inform the applicants that if they fail to remedy their defect the entire agreement would be cancelled and the amount would become due and payable, the notice may be considered to be defective.

[11] I am therefore persuaded that there is a reasonable prospect that another court may come to a different decision.

[12] I accordingly grant leave to appeal to the full bench of this division.

[13) Costs to De costs in the appeal

ALLIE, J

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