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

IN THE HIGH COURT OF

SOUTH AFRICA

(EASTERN CAPE - PORT ELIZABETH)

CASE No. 608/09

NOT

REPORTABLE

In the matter between:-

FIRSTRAND BANK LTD Plaintiff

and

MARK BERNARDO First Defendant

JACOMINA MADALEEN BERNARDO Second Defendant

JUDGMENT

Van der Byl, AJ:-

[1] On 26 September 2007 the Plaintiff, Firstrand Bank Ltd, granted a home loan to the Defendants who are married in community of property. Security for this loan was provided by way of a mortgage bond registered over the immovable property known as Erf 3029, Parsons Vlei, situate at 5 Jannis Street, Chade Manor, Bridgemead, Port Elizabeth, held by the Defendants under Deed of Transfer T 92703/2007. In terms of the home loan agreement the Defendants undertook to repay the amount due by way of monthly instalments and agreed that should they be in default of such instalments the Plaintiff may in its discretion claim immediate repayment of the full outstanding balance or terminate the agreement upon which all amounts owing by the Defendants shall forthwith be payable in full.

[2] On the Defendants having fallen in arrears on their instalments, the Plaintiff on 10 March 2009 issued summons against the Defendants in which it claims -

(a) payment of the amount of R639 821,29, being the full outstanding amount of the Defendants’ indebtedness at that stage;

(b) payment of interest on that amount, calculated and compounded monthly, at the rate of 14,8 per cent per annum with effect from 1 February 2009 to 9 February 2009 and at the rate of 13,8 per cent with effect from 10 February 2009 to date of payment;

(c) an order declaring the immovable property concerned executable as agreed in clause 4.29 of the home loan agreement by the Defendants;

and

(d) costs of suit.

[3] The Defendants, however, entered appearance to defend the action, whereupon, the Plaintiff filed an application for summary judgment.

[4] In their affidavit filed in opposition to the application for summary judgment the Defendants raise to issues, namely -

(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.”.

(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

[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

Ref: S Beukes/lf

Tel: (041) 365 5523

DATE OF HEARING 21 April 2009

JUDGMENT DELIVERED ON 28 April 2009