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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA

CASE NO: 9117/2014
Not reportable
Not of interest to other judges
Revised.
29/6/2017

In the matter between:

THE STANDARD BANK OF SOUTH AFRICA LTD	Applicant

and

JACO VENTER
ID NO. […]	Respondent

JUDGMENT

TEFFO, J:

[1] The applicant seeks an order confirming the cancellation of the agreement entered into between it and the respondent and the return of a Nissan Hardbody 3.20 4x4 DIC, Engine Number QD […], Chassis Number […]("the vehicle").

[2] The basis of the application is that the respondent breached the debt re-arrangement order. The application is opposed.

[3] The issue at hand is whether the applicant is entitled to enforce the agreement by first giving notices in terms of sections 129, 86(10) or 88(3) of the National Credit Act No 34 of 2005 ("the Act”) where the respondent defaulted with his obligations in terms of the debt re-arrangement order.

BACKGROUND

[4] The applicant and the respondent entered into an instalment sale agreement on 27 March 2007 in terms of which the applicant delivered the vehicle to the respondent. The respondent defaulted with his monthly payments in terms of the agreement. He was placed under debt review in terms of the Act and a debt re-arrangement order was issued. He also defaulted with his monthly payments in terms of the debt re-arrangement order. The applicant as a result thereof terminated the debt review process in terms of s 88(3) of the Act.

[5] In opposition of the application, the respondent raised the following issues: the applicant should have complied with s 129(1) of the Act, it should have complied with s 86(10) of the Act instead of s 88(3), he did not receive the s 88(3) notice and has terminated the debt review process more than a year ago and s 88(3) was therefore not applicable. He also disputes the locus standi of the applicant to bring the application on the basis that ownership of the vehicle has not been proved in the papers. He contests the amount of the arrears and alleges that the applicant unlawfully charged finance charges and other costs on his account with it. It is contended that a valid agreement between the parties does not exist as the agreement has not been signed by the applicant. The fact that the application only refers to the arrears only and not the total balance outstanding is criticised and it is alleged that the applicant deliberately misrepresents the facts. The respondent also challenges the authorities of the deponent to the founding and the replying Affidavits to bring the application on behalf of the applicant.

[6] It is contended that the issues raised are disputes of fact which cannot be resolved in motion proceedings.

[7] Further issues raised were that the amount claimed in respect of the arrears was not proved in that no certificate of balance was attached to the papers.

[8] The respondent and the applicant brought applications for condonation of the late filing of the answering and replying affidavits. The applications were not opposed and were accordingly granted. A supplementary affidavit was also filed after the applicant obtained the Natis document to prove that it has locus standi to bring the application. Leave to file the supplementary affidavit was also granted.

DISPUTES OF FACT

[9] In my view the issues raised are not bona fide, genuine disputes of fact. They can be resolved on these papers for the following reasons:

THE AUTHORITY OF THE DEPONENT TO THE FOUNDING AFFIDAVIT

[10] It was submitted on behalf of the applicant that the resolutions authorising the deponent to sign the affidavit on behalf of the applicant are not always attached to each and every application that is brought, that the deponent's name is well known as the name always appears in applications on behalf of the applicant. The deponents to the affidavits on behalf of the banks have ostensible authority to sign them on behalf of the banks to safeguard the bank's interests. I find the issue to be only technical and not having any bearing to the merits of the application.

COMPLIANCE WITH S 129(1) AND S 86(10) OF THE ACT INSTEAD OF S 88(3)

[11] S 88(3) of the Act provides:

"Subject to section 86(9) and (10), a credit provider who received notice of court proceedings contemplated in section 83 or 85, or notice in terms of section 86(4)(b)(i), may not exercise or enforce by litigation or other judicial process any right or security under that credit agreement until –
(a)	the consumer is in default under the credit agreement; and
(b)	one of the following has occurred:
(i)	An event contemplated in subsection (1)(a) through (c); or
(ii)	the consumer defaults on any obligation in terms of a re­ arrangement agreed between the consumers and credit providers, or ordered by a court or the Tribunal."

[12] In Ferris and Another v First Rand Bank 2014 (3) SA 39 (CC) Moseneke ACJ as he then was, approved the reasoning in First Rand Bank Ltd v Fillis and Another 2010 (6) SA 565 (ECP) and said the following in para [16]:

"It seems to me that an original credit agreement is enforceable without further notice if the relevant debt restructuring order is breached."

[13] At para [14] of the Fillis judgment Moseneke ACJ said this was clear from the wording of the relevant sections of the Act. Further to this it was noted that s 129(2) of the Act expressly stipulated that the requirement to send a notice under s 129(1) is not applicable to debts subject to debt restructuring orders.

[14] In Jili v Firstrand Bank Ltd tla Wesbank 2015 (3) SA 586 (SCA) in an appeal against the summary judgment obtained by Wesbank in the court a quo, enforcing a credit agreement pursuant to the appellant's breach of a debt re-arrangement order, the appellant contended that the application for Summary Judgment was brought prematurely because Wesbank first had to vary or set aside the debt re-arrangement order before seeking to enforce its claim. In the alternative she contended that if that was not a defence then the court a quo failed to have regard to the circumstances of the case and the objectives of the Act when it did not exercise its discretion to refuse summary judgment. The court held that once a debtor defaulted in terms of an order by a magistrate for the re-arrangement of a debt, a creditor was entitled to enforce the terms of the loan agreement, without having to apply for a variation or a setting aside of the order of the magistrate. At paras [12] and [25] of the judgment at 590F and 5940-E the court further held that a debtor's default under the debt re-arrangement order entitled the creditor provider, without further ado, to proceed.

[15] It is common cause between the parties that on 26 May 2011, the Magistrate's Court, Pretoria, made a debt re-arrangement agreement an order of court. In terms of the court order the respondent was ordered to pay R3 100,00 per month from the end of May 2011. The payment history of the respondent attached to the papers Annexure "R2" on pages 81 to 85 shows that on 10 May 2011 while the instalment that was due was R3 140,03 only an amount of R435,39 was paid. Arrear interest in the amount of R1 867,60 was therefore charged on the account and while the instalment that was due on 01 June 2011 was R3 140,03, the respondent only paid an amount of R2 064,96 on 09 June 2011. A further arrear interest of R1 864,66 was charged on the account on 16 June 2011 and on 01 July 2011 the instalment of R3 140,03 was due. Payment was only effected on 13 July 2011 for the amount of R2 965,48. The account shows a consistent pattern of paying late, payments of amounts which were far less than the amount due and the continued charge of the arrear interest. The payment history also confirms that after the debt re­ arrangement was made an order of court, the respondent still failed to pay the amount he was ordered to pay in terms of the debt re-arrangement order. The respondent defaulted with his obligations in terms of the credit agreement and he also breached the terms of the debt re-arrangement order. S 88(3) of the Act is therefore applicable and the applicant has to proceed to enforce the credit agreement without giving the notice of termination. S 86(10) and s 129(1) notices are not applicable to debts subject to debt restructuring orders. It therefore follows that the contention by the respondent that he did not receive the notice of termination fails as it is without merit.

[16] The respondent contends that he has terminated the debt review process more than a year ago. The answering affidavit was signed on 25 June 2014. It will therefore mean that debt review was allegedly cancelled by the respondent in 2013. The applicant denies that the respondent terminated debt review as alleged as it was not notified about it. The respondent did not attach any proof that he notified the applicant about his termination of debt review. I agree with the applicant's submission that debt review was automatically terminated when the respondent breached his obligations in terms of the debt re-arrangement order in June 2011. This contention is immaterial. It does not in any way assist the respondent.

OWNERSHIP OF THE VEHICLE - LOCUS STANDI TO BRING THE APPLICATION

[17] It is contended that the applicant failed to prove ownership of the vehicle as no proof of registration is annexed to the founding affidavit. The respondent attached Annexure "JVX" dated 26 February 2007 to his answering affidavit and contended that the document does not prove that the applicant is the owner of the vehicle but the dealer, Auto Supreme Zambezi. The applicant attached the certificate of registration of the vehicle to its supplementary affidavit indicating that it was registered in its name on 4 April 2007. This information is consistent with the applicant's version that the parties entered into the agreement on 27 March 2007 and the invoice proving payment of the full purchase price by the applicant to the dealer on 27 March 2007 has also been attached. In terms of the agreement, ownership of the vehicle remain vested in the applicant until all amounts due to it have been paid in full. There is no way that the applicant could have become the owner of the vehicle on 26 February 2017 prior to the conclusion and the signing of the agreement. The contention by the respondent therefore fails as it is without merit.

THE EXISTENCE OF THE AGREEMENT

[18] It is contended that because the agreement has not been signed by the applicant there exists no agreement between the parties. On page 18 of the papers the applicant has attached an invoice issued by the dealer, Auto Supreme Zambezi, stating that the vehicle has been financed by the applicant in that the full purchase price has been paid by the applicant. The respondent's name appears on the statement and it further states that the motor vehicle was delivered on your behalf from Stannic. The respondent did not dispute that the vehicle has been delivered to him. He took delivery of the vehicle and proceeded to make payments in terms of the agreement. I agree with the applicant's contention that he is estopped from asserting that no agreement exists between the parties.

ARREARS. THE UNLAWFUL FINANCE, OTHER CHARGES AND NO OUTSTANDING BALANCE REFLECTED ON THE PAPERS

[19] While the respondent contests the amount of arrears on the account on the basis that the applicant has not attached any calculation of the amount in arrears or any other amount in the founding affidavit and that mention has not been made of any outstanding amount either, he attached a document to his answering affidavit (Annexure "J1") (page 52 of the papers) from the applicant dated 17 May 2014 which indicates that there was a balance of R166 071,89 on his account. On this document there is an overdue amount of R9 877,91. According to his own calculations he alleges that he had calculated a total outstanding balance of only R9 290,36 on 27 March 2014 which differs materially from what the applicant alleges. He further states that two further payments of R3 100,00 have been debited from his account and that after a further amount of R3 100,00 has been debited on 26 June 2014, the entire amount payable will be settled in full.

[20] The respondent further alleges that the provisions of the Usury Act and the Credit Agreement Act apply to the agreement between him and the applicant in relation to finance charges and costs in that the agreement was entered into on 27 March 2007 and the Act came into operation on 1 June 2007. He contends that the provisions of the Usury and the Credit Agreement Acts in relation to the calculation of the finance charges were not applied and that the fees charged are unlawful.

[21] A certificate of balance dated 27 June 2016 has been attached to the applicant's supplementary affidavit. In terms of this certificate of balance an amount of R111 446,76 is still owing on the account of the respondent. He has not alleged or given proof that he has paid the full purchase price or the debt in full. Whatever calculations the respondent has made on his own, do not count. What counts as per the agreement is the certificate of balance. According to the applicant if one takes into account that the agreement between the parties was entered into on 27 March 2007, the respondent should have made his last payment on the account in 2012 had he not defaulted with his monthly payments in terms of the agreement. The payment history on the account attached to the papers, annexure "R2" on pages 81 to 85 shows that the respondent did not make regular payments on the account. From July 2007 no payment was made until on 14 December 2007. The pattern followed in the succeeding months. From December 2012 to March 2013 payment was only made on 07 March 2013 of only R3 000,00 while the amount not paid in that period was R12 400 ,00.

[22] Paragraph 10 of the founding affidavit states that the respondent was in arrears in the amount of R9 306,44 and this was the basis of launching the application . According to the certificate of balance there is an outstanding balance of R111 446 ,76 on the account. If regular payments are not made on the account, the interest is compounded. I agree with the applicant that for the purposes of this application , the applicant only has to show that the respondent has defaulted in terms of the Instalment Sale Agreement for it to be entitled to cancel the agreement and take possession of the goods. It is not in dispute that the respondent defaulted with his obligations in terms of the agreement. That is the reason why the court had to make a debt re­ arrangement an order of court after the respondent was placed under debt review. The account has arrears and there is an outstanding balance on the account. The respondent has also defaulted with his obligations in terms of the debt re-arrangement order.

[23] In reply to the allegations made with regard to the charges referred to as "unlawful fees", at paras 9.2 and 9.3 of the replying affidavit, the applicant gave the following explanation : That the first fee was not charged by the applicant, the Instalment Sale Agreement reflects the outstanding principal debt as R125 390,70 which corresponds with the purchase price of the vehicle as contained in the invoice received from the dealer, Auto Supreme Zambezi (Annexure "B" to the founding affidavit), the purchase price includes the amount "other charges" which was charged by the dealership as part of the purchase price of the vehicle and not finance charges charged by the applicant. It is further alleged that the second amount referred to as the "documentation" fee was lawfully charged by the applicant in terms of the Usury Act 73 of 1968 as amended.

[24] Clauses 2.3 and 18.1 of the Instalment Sale Agreement read:

"2.3 If you do not make a payment of any amount on or before the date on which it is due, you will be charged penalty interest on the outstanding amount.

18.1 A balance certificate signed by one of our managers will, on its mere production, be sufficient proof of the amounts and other information mentioned in such certificate, unless you prove to the contrary."

[25] The applicant explained how the amounts were charged on the account and a certificate of balance has been attached. In terms of the agreement the certificate of balance is sufficient proof of the amount claimed.

[26] If according to the respondent the credit agreement entered into on 27 March 2007 was not governed by the Act, the fact of the matter is that that agreement was novated by the debt re-arrangement agreement which was made an order of court. The debt re-arrangement order is governed by the provisions of the Act. There is therefore no merit in the contention by the respondent.

[27] The respondent has not been making regular payments on the account as I highlighted above.  In terms of clause 2.3 penalty interest had to be charged on the account where the respondent defaulted with his monthly instalments. Annexure "R2" shows that arrear interest has been charged on the account throughout as a result of the default by the respondent in making regular payments. Furthermore the re-arrangement order had also increased the period of payment of the debt as the instalment amount had been reduced. From the documents filed there is no way in which the respondent could have paid the debt in full when the application was launched. The applicant was able to show that there were arrears of the sum of R9 306,44 on the account owed to it by the respondent and the outstanding balance of R111 444,76 on the account. It is therefore entitled to cancel the agreement and claim repossession of the vehicle.

[28] An issue was raised that should the application be granted in favour of the applicant, the court should grant a costs order on the Magistrate's Court scale as the arrear amount according to the applicant is only R9 306,44. I do not agree. The application is for cancellation of the agreement and return of the motor vehicle. In my view the application was correctly brought within the jurisdiction of the High Court.

[29] In the result I make the following order :

1.	The application succeeds with costs and the cancellation of the agreement entered into between the applicant and the respondent and attached to the applicant's Founding Affidavit as Annexure "A" is confirmed.
2.	The Sheriff of this Court or his lawful deputy is authorised, directed and empowered to attach, seize and hand over to the applicant the vehicle, being Nissan Hardbody 3.20 4x4 DIC, Engine Number QD […], Chassis Number […] ("the vehicle") .
3.	The applicant is given leave to approach this Court on same papers duly supplemented for payment of the difference between the balance outstanding and the market value of the vehicle in the event of there being a shortfall after the vehicle has been repossessed and sold or re-leased and there being a balance outstanding by the respondent to the applicant.

_______________________
M TEFFO
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA

APPEARANCES:

FOR THE APPLICANT	ELANI BOTHA
INSTRUCTED BY		NEWTONS ATTORNEYS
FOR THE RESPONDENT	C D'ALTON
INSTRUCTED BY		FINCK ATTORNEYS
DATE OF JUDGMENT	29 JUNE 20 17