South Africa: Eastern Cape High Court, Port Elizabeth

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Firstrand Bank Ltd v Bernardo and Another (608/09) [2009] ZAECPEHC 19 (28 April 2009)

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(a) that the Plaintiff never complied, as is alleged in the Plaintiff’s summons, complied with the provisions of section 129 and 130 of the National Credit Act, 2005 (Act 34 of 2005) (“the Act”); and

(b) alternatively and in the event of this Court holding that those sections have been complied with, that the matter has been referred to a debt counsellor in terms of section 85 of the Act who found them to be over-indebted as provided in section 86(7)(c) of the Act.

[5] Mr Scott who appeared on behalf of the Defendants submitted, correctly in my view, that neither of these issues constitute a defence on which the Defendants can be granted leave to defend the action instituted by the Plaintiff.

[6] However, should it appear, as alleged, that no notice envisaged in section 129 of the Act has been delivered to the Defendants the Court must adjourn the matter and make an appropriate order setting out the steps the credit provider must complete before the matter may be resumed.

[7] It would appear that a dispute, based on a bald allegation by the Defendants, exist between the parties as to whether a notice envisaged in section 129 of the Act has, as averred in the summons, indeed been “delivered” to the Defendants which may, should it be held that no such notice had been delivered, entitle the Defendants to an order, as claimed by them in their alternative contention, in terms of section 85 of the Act, inter alia, referring the matter to a debt counsellor.

[8] It follows that the Defendants are not really seeking leave to defend the action in relation to their indebtedness, but are in effect seeking a postponement of the matter in terms of section 130(4) of the Act so as in effect to afford the Plaintiff the opportunity to comply with section 129 of the Act or, should I hold that Plaintiff complied with the provisions of section 129 of the Act, to make an order envisaged in section 85 of the Act.

[9] I am accordingly not faced with a matter where I should determine, as required by Rule 32, whether the Defendants have a bona fide defence in relation to their indebtedness as claimed in the summons, but am indeed faced with a different issue, namely, compliance with the provisions of the Act which do not constitute a defence to the Defendants’ indebtedness.

[10] It is under these circumstances that I have been requested to allow the Plaintiff to file a further affidavit dealing with that issue which falls, strictly speaking, outside the ambit of the provisions of Rule 32 which in effect precludes a plaintiff in sub-rule (4) from filing, inter alia, a replying affidavit or adducing any further evidence (Nepet (Pty) Ltd v Van Aswegen's Garage 1974 (3) SA 441 (O); M.A.N. Truck & Bus (SA) (Pty) Ltd v Singh and Another 1976(4) SA 264 (N) at 265F).

In my view it would be unnecessary and unfair to require the Plaintiff to go to trial on the issues raised in the affidavit filed in opposition to the application for summary judgement since they do not disclose any defence in relation to their indebtedness.

I accordingly allowed the Plaintiff to file a further affidavit dealing with the issues raised in the Defendants’ opposing affidavit.

[11] In Plaintiff’s further affidavit, so admitted, it is contended on behalf of the Plaintiff -

(a) that, although the Defendants elected in clause 4.34 of the home loan agreement an address described as “Jannes Street, Chade Manor, Bridgemead, Port Elizabeth 6025” for all communications and services of notices in respect of any legal proceedings which may be instituted by virtue of that agreement, the required notice in terms of section 129 of the Act dated 2 February 2009 (Annexure JCR 1) was forwarded by registered post to the Defendants at “5 Jannis Close, Bridgemead, Port Elizabeth 6025";

(b) that, apart from the fact that the Plaintiff’s attorney of record had established from the Municipality that that is the correct street address of the mortgaged property described in the mortgage bond as “Erf 3029, Parsons Vlei”, the Defendants indeed received and accepted service of the summons at that address.

[12] In terms of section 130(1)(a) of the Act a credit provider may approach the court for an order to enforce a credit agreement only if at the time the consumer is in default and has been in default for a period of at least 20 business days and at least since 10 business days have elapsed since the credit provider “delivered” a notice to the consumer as contemplated in, inter alia, section 129(1) of the Act which is in this matter the applicable section.

[13] In terms of section 65(1) of the Act any document required to be delivered to a consumer in terms of the Act must be delivered in the manner as prescribed by regulation. In terms of regulation 1 of the regulations published by Government Notice R489 in Government Gazette of 31 May 2006 the expression “delivered” is defined as follows:

“'delivered' unless otherwise provided for, means sending a document by hand, by fax, by e_mail, or registered mail to an address chosen in the agreement by the proposed recipient, if no such address is available, the recipient's registered address......;”.

[14] If the notice was, as is contended by the Defendant, not received by the Defendants, it does not mean that it was in the circumstances not delivered (see: unreported judgment delivered on 3 April 2009 in Marimuthu Munien v BMW Financial Services (SA) (Pty) Ltd and Another under Case No. 16103/08 in the KwaZulu-Natal Local Division, p. 9, para [15] and section 7 of the Interpretation Act, 1957 (Act 33 of 1957)).

[15] It, furthermore, appears that the Plaintiff’s attorneys telefaxed a copy of the notice, Annexure JCR 1, to Defendants’ attorneys on 16 April 2009 together with proof of registered posting thereof.

[16] I am in the circumstances satisfied that the Plaintiff complied with the legal requirements laid down in section 129(1) of the Act and that, in any event, the postponement of the matter so as to afford the Plaintiff an opportunity to again comply with the provisions of that section would serve no purpose and would unnecessarily delay this matter.

[17] This brings me to the Defendants’ alternative request, namely, that the matter be referred in terms of section 85 of the Act to a debt counsellor so that the home loan agreement can be included under the debts currently subject to the debt review process.

[18] This raises the question whether I should exercise my discretion by grating an order in terms of that section (see: unreported judgment delivered on 8 May 2008 in Firstrand Bank Limited v Shane David Olivier under Case No. 2369/07 in this Division, p. 16, para [20]).

[19] In terms of section 85 of the Act the court may in proceedings where it is alleged that the consumer is over-indebted -

“(a) refer the matter directly to a debt counsellor with a request that the debt counsellor evaluate the consumer's 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.”.

[20] As is apparent from the Defendants’ affidavit filed in support of their opposition to the application for summary judgment, they disclose no information on the allegation that they have been assessed to have been over-indebted or any information on the nature of their over-indebtedness or their gross or nett monthly incomes

[21] I am accordingly unable, because of a lack of relevant information, to exercise my discretion in favour of the Defendants.

[22] In the result the Plaintiff is granted summary judgment in terms of prayers (a), (b), (c) and (d) of the Notice of Application for Summary Judgment.

...............................

P C VAN DER BYL

ACTING JUDGE OF THE HIGH COURT

ON BEHALF OF APPLICANT ADV P W A SCOTT

On the instructions of:- SPILKINS

15 Rink Street

PORT ELIZABETH

Ref : J C Rubin/lg

Tel: (041) 582 1705

ON BEHALF OF FIRST RESPONDENT ADV D A SMITH

On the instructions of: J R BESTER & ASSOCIATES

70 Worraker Street

Newton Park

PORT ELIZABETH

Ref: S Beukes/lf