South Africa: High Courts - Gauteng

IN THE HIGH COURT OF SOUTH AFRICA

(WITWATERSRAND LOCAL DIVISION)

JOHANNESBURG

CASE NO: 31825/2008

DATE: 2009-01-20

In the matter between

POTGIETER RONALD FREDERICK.........................................................Applicant

and

GREENHOUSE FUNDING (PTY) LTD......................................................1^st Respondent

SHERIFF OF THE HIGH COURT..............................................................2^nd Respondent

JUDGMENT

LAMONT J:

This is an application which comes before me as a matter of urgency. In the application the applicant seeks an interdict preventing the second respondent from selling certain property and staying a sale in execution which is due to be heard in two days time. The first respondent to whom for the sake of convenience I shall refer as the plaintiff and the applicant as the defendant,' obtained a judgment against the defendant on 30 October 2008. In terms of that judgment the defendant was obliged to pay to the plaintiff certain monies and in addition the property which it is proposed be sold in execution was declared to be executable. The defendant in the present application does not contest the amount of the indebtedness. The basis of the application is that at the time when the summons was issued, there was a prohibition preventing the plaintiff from instituting the proceedings and hence the judgment falls to be set aside.

The relevant facts are the following: A letter was sent to the defendant by the plaintiff in terms of Section 129 of the National Credit Act, Act 34 of 2005 on 20 May 2008. There is no dispute by the defendant that the letter had been sent and as to the date when it was sent. On 18 August 2008 the defendant made a debt review application as contemplated by the provisions of Section 86 of the Act. The plaintiff issued the summons pursuant to which it obtained judgment on 18 September 2008.

The submission on behalf of the defendants is that by reason of the provisions of Section 86(2) the plaintiff was not entitled to proceed to take steps to sue the defendant. The provisions of Section 86(2) of the Act are as follows:

"86(2) An application in terms of this Section may not be made in respect of, and does not apply to. a particular credit agreement if, at the time of that application, the credit provider under that credit agreement has proceeded to take the steps contemplated in Section 129 to enforce that agreement”

If the plaintiff had taken steps contemplated in Section 129 to enforce the agreement in question, then the provisions of the National Credit Act of the Act are not of application. If the plaintiff had not so taken steps, then the provisions of the Act are of application. The simple question to be resolved is whether or not the plaintiff took steps contemplated in Section 129 to enforce the agreement. The step taken by the plaintiff was the sending of the Section 120 of the Section 129 letter on 20 May 2008. The provisions of Section 129 provide:

"Section 129 (1). If the consumer is in default under a credit agreement, the credit provider -

(a) may draw the default to the notice of the consumer in writing and propose that the consumer refer the credit agreement to a debt counsellor, alternative dispute resolution agent, consumer court or ombud with junsdiction, with the intent that the parties resolve any dispute under the agreement or develop and agree on a plan to bring the payments under the agreement up to date; and

(b) subject to Section 130 (2) may not commence any legal proceedings to enforce the agreement before -

i) first providing notice to the consumer, as contemplated in paragraph a) or in Section 86 (10) as the case may be and

ii) meeting any further requirements set out in Section 130."

The remaining subsections in Section 129 of the Act provide for matters which do not involve the taking of any step by the credit provider. Subsection 2 refers to an irrelevant state of affairs, subsection 3 provides that a consumer may do certain things: subsection 4 provides that a consumer may not do certain things. The only step which is provided for in Section 129 which a credit provider can take, is me step in Section 129 (1) (a), namely the sending of a letter. It was submitted on behalf of the defendant that the sending of the letter is not a step to enforce the agreement. In my view the submission fails to have regard to the fact that, it is the only step which can be taken by a credit provider under Section 129(2). It is also a step which ultimately enables the credit provider to take steps in a court of law. If Section 86(2) is read to mean that the sending of the letter is not a step under Section 129 to enforce the agreement, then the section is rendered nugatory In my view a proper interpretation must be provided to the section. The section must be interpreted so as to not have an absurd result and so as to reflect commercial reality. Such an interpretation would involve an interpretation of Section 86 (2) as meaning that the sending of a letter constitutes a step contemplated in Section 129 to enforce the agreement.

I am fortified in this view by a judgment to which I have been referred in the matter of NedbankLtd v Ditsheko Isaac Motaung (TPD) case 22445/07. In that matter DU PLESSIS J held as follows:

"The question in this case is whether the present matter between the parties was before a debt counsellor when the action was instituted. The answer to the question is in the express provisions of Section 86(2) of the Act that provides... in its summons the plaintiff alleges that it has complied with the provisions of Sections 129 and 130 of the Act. As appears from Annexure C to the summons a certificate by a manager in the plaintiffs employ a notice in terms of Section 129 (1) of the Act was delivered to the defendant on 15 February 2007.... Thus when the defendant on 17 September 2007 applied for debt review in terms of Section 86 of the Act, the plaintiff had already "proceeded to take the steps contemplated in Section 129 to enforce that agreement, in the words of the Section 86(2)..." In the circumstances I am of the view that there is no reasonable prospect of the application for rescission of succeeding. In the further premises the application before me must fail. In these circumstances I dismiss the application with costs.

The order which I make is:

"Application dismissed with costs."