Nedbank Limited v Ramsunder and Another (8260/2018D) [2020] ZAKZDHC 20 (23 June 2020)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

KWAZULU-NATAL LOCAL DIVISION, DURBAN

CASE NO.8260/2018D

In the matter between:

NEDBANK LIMITED

PLAINTIFF/RESPONDENT

and

PRAKASH RAMSUNDER

FIRST DEFENDANT/APPLICANT

(ID No. [….]

ARISHA RAMSUNDER

SECOND DEFENDANT/APPLICANT

(ID No. [….])

ORDER

The application for leave to appeal is dismissed with costs.

JUDGMENT IN APPLICATION FOR LEAVE TO APPEAL

Henriques J

Introduction

[1] This is an opposed application for leave to appeal against the judgment and orders which I granted on 12 August 2019.

[2] Prior to the declaration of the National Disaster and on or about 9 or 10 March 2020, a date was arranged for the hearing of the application for leave to appeal, being 14 May 2020. In light of the level 4 alert and the directives issued by the Judge President on 1 May 2020, the parties were given the option to have the application for leave to appeal decided on the papers with provision for the filing of heads of argument and written submissions.

[3] The parties agreed to have the matter disposed of on the papers and have submitted written submissions and heads of argument. For the sake of convenience , the parties will be referred to as in the original action.

Grounds of appeal

[4] The grounds upon which the defendants seek leave to appeal is set out in a detailed notice dated 23 August 2019. In such notice[1] the defendants reserve their right to supplement their grounds of appeal on receipt of the transcript. Despite being in possession of the transcript of proceedings and the ex tempore judgment, they have elected not to do so.

[5] The grounds upon which the defendants seek leave to appeal are the following:

'1. Another Court could reasonably come to a different conclusion for the following reasons:

1.1 The Court erred by dismissing the main action because the quantum was in dispute and the onus shifts on the Respondent.

See Applicants Plea paragraph 9 page 64 (index to pleading)

See Rule 37 Pretrial Conference wherein the quantum is an issue in dispute

1.2 The Court erred by not noting that there was no breach or Default by the Applicants as from the year 2007 until 2019.

Or Alternatively the Respondent has not demonstrated in its particulars of claim the date, month and year the Applicants defaulted or breached the Debt Review Rearrangment Court Order and in what amount(s) did the Applicants defaulted in or alternatively which of the agreements were breached. (there are two credit agreements and one Debt Review Rearrangment Court order via NCA, 34 of 2005 eg one 2007, 2011 and 2014)

1.2.1 Alternatively if the court found that there was such a breach on the contrary the Court misdirected itself by not accepting that such default or breach was created by the Respondent by rescinding the Debt Re-Arrangement Order in terms of the National Credit Act, ("the NCA"), 34 of 2005 four years later or alternatively the Court erred by not noting that the Applicants were complying with a Court Order as from the year 2014 and therefore the Applicants could not have defaulted in payments from 2011 to 2014 and from 2014 to 2019 or even from 2007 when the initial agreement was concluded between both parties.

See Pages 31- 32 (index to discovered documents) Debt Re-Arrangement Order

See Page 51 (index to discovered documents) Respondent has terminated the Debt Re­ Arrangement Order on the 17th day of May 2018, the reason for such termination is based on three aspects:

(a) "In terms of our notice of default you were given the Opportunity to provide us proof of payment";

(b) "Reasons why the credit agreement(s) should not be terminated" (Note there are two credit agreements and one Debt Review Re-arrangement Court Order)

See pages 14-30 and pages 31- 40

(c) "We have allowed you a period in excess of 10 days to respond to our notice and you have failed to do so."

1.3 The Court erred by not following the principles enunciated in the Full Bench of the Western Cape High Court in Wesbank v Papier and the National Credit Regulator in so far as it relates to Section 86[10] of the National Credit Act, 34 of 2005

1.4 The Court erred by not noting that the Distress Restructuring agreement has not been terminated or alternatively termination has not been pleaded in the particulars of claim. This means it is still in force.

See Index to pleading pages 31-40

1.5 The Court misdirected itself by granting costs on attorney and client scale because the Respondent advanced no reason(s) why costs should be granted on an attorney and client scale, nor did this Honourable Court advance any reason(s) why costs was granted on attorney and client scale.

1.6 The Court erred by not noting that the Respondent has not advanced any reason(s) why after 4 years later rescinded the Debt Review Rearrangement Court Order. The Respondent has accepted the Debt Review Arrangement Court order voluntarily and accepted payments therefore the Respondent has acted Unlawfully and prematurely in enforcing legal action of Alternatively terminating a debt review arrangement court Order based on factors in paragraphs 1.2.1 (a), (b) and (c) above.

1.7 The Court erred by not noting that Section 129 of the NCA, 34 of 2005 and Section 26 of the Constitution, 108 of 1996 were never pleaded in its particulars of claim. There are essential averments lacking in the Respondent's particulars of claim.

See Rule 18(4) of the Uniform Rules

1.8 The Court erred by not taking cognizance that the Applicants immovable property that has been subjected to Securitzation.

1.9 Applicants reserve their rights to amend their application for leave to appeal upon receiving transcripts form sneller recordings.

1.10 The Judgment and transcripts are outstanding, upon receiving same it will be made available to this Honourable Court.'

[6] Before dealing with the individual grounds of appeal it is necessary to set out the test applicable in applications of this nature.

The test in an application for leave to appeal

[7] Applications for leave to appeal are governed by ss 16 and 17 of the Superior Courts Act 10 of 2013 '(the Act'). Section 17 makes provision for leave to appeal to be granted where the presiding judge is of the opinion that either the appeal would have a reasonable prospect of success or there is some other compelling reason why the appeal should be heard, including whether or not there are conflicting judgments on the matter under consideration.

[8] The defendants have indicated in their notice of application for leave to appeal that the application is premised on the provisions of s 17(1)(a)(i) of the Act. Reasonable prospects of success has previously been defined to mean that there is a reasonable possibility that another court may come to a different decision.[2]

[9] With the enactment of s 17 of the Act, the test has now obtained statutory force and is to be applied using the word 'would' in deciding whether to grant leave. In other words, the test is would another court come to a different decision. In the unreported

decision of the Mont Chevaux Trust v Goosen[3] the Land Claims Court held, albeit obiter, that the wording of the subsection raised the bar for the test that now has to be applied to any application for leave to appeal. In Notshokovu v S[4] para 2, it was held that an appellant faces a higher and stringent threshold in terms of the Act when compared to the provisions of the repealed Supreme Court Act 59 of 1959.

[10] In Acting National Director of Public Prosecutions & others v Democratic Alliance in re: Democratic Alliance v Acting National Director of Public Prosecutions & others,[5] Ledwaba DJP, writing for the full court considered the test as envisaged ins 17 of the Act. At para 25 of the aforementioned judgment, he dealt with the test set out in the Mont Chevaux Trust case where Bertelsmann J held the following:

'It is clear that the threshold for granting leave to appeal against a judgment of a High Court has been raised in the new Act. The former test whether leave to appeal should be granted was a reasonable prospect that another court might come to a different conclusion, see Van Heerden v Cronwright & Others 1985 (2) SA 342 (T) at 343H. The use of the word "would" in the new statute indicates a measure of certainty that another court will differ from the court whose judgment is sought to be appealed against.'

[11] In this particular matter I would have to determine whether another court would (my emphasis) come to a different decision. I have considered the application for leave to appeal and the written submissions filed.

[12] In his heads of argument, Mr Combrinck SC, on behalf of the plaintiff, unsurprisingly submitted that there are no reasonable prospects of success on appeal. Mr Sukdeo for the defendants submitted there are reasonable prospects of success on appeal and also sought to rely on various grounds which did not form part of the issueswhich the court was required to consider. He submitted that another court could reasonably come to a different decision and dismiss the action as quantum was in dispute. As a result, it is necessary to indicate at the outset the issue that the court was faced with.

Analysis

[13] The only issue which the court had to determine was the point in limine which was whether the plaintiff correctly terminated the debt review proceedings . Linked to this was whether it had complied with s 86(10) of the National Credit Act 34 of 2005 and if it had failed to do so, it was thus not entitled to proceed against the defendants. It is common cause that such notice was, however, served on the debt counsellor as well as the defendants. The matter was enrolled for hearing on the expedited trial roll, the parties having agreed at a pre-trial conference that this was the only issue for determination.

[14] This is borne out by page 1 of the transcript of the proceedings. At the commencement of the proceedings this was pertinently placed on record by Mr Combrinck.[6] The transcript reads as follows:

'MR SUKDEO : And that's the issue in terms of Section 86(10). I will take Her Ladyship through the papers and I'll refer to Her Ladyship to index pleadings at page 11, paragraph 21.9.'

[15] If one has regard to the pleadings it was common cause that:

(a) a written home loan agreement was concluded on 18 June 2007. As security for the monies loaned, the plaintiff secured a mortgage bond which was registered over the defendants' immovable property.

(b) the defendants fell into arrears with their monthly payments in terms of the home loan agreement and in consequence thereof the parties concluded a distress restructure agreement on 18 February 2011 amending certain of the terms and conditions of the initial home loan agreement.

(c) one of the terms of the bond, the home loan agreement and / or distress restructure agreement provided that should the defendants breach any of the terms the full balance owing would become immediately due and payable and the plaintiff could elect to institute proceedings for the recovery of the money due in terms of the home loan agreement as well as an order declaring the mortgaged immovable property specially executable;

(d) the defendants applied for debt review in or about May 2014;

(e) an order was granted on 18 August 2014 in terms of which the debt rearrangement order was approved and this also applied to the debt owed by the defendants to the plaintiff;

(f) the defendants fell into difficulties and appear not to have complied with the payments in terms of the debt rearrangement order. The plaintiff on 26 February 2018 successfully applied for the rescission and/or termination of the debt rearrangement order insofar as it related to the debt owed to the plaintiff; and

(g) such application was successful and an order was granted excluding the plaintiff's debt from the debt rearrangement order that remained in place in respect of the defendants' other creditors.

[16] It is common cause, alternatively not disputed, that since approximately July 2018, when the defendants obtained knowledge of the rescission of the debt rearrangement order they have taken no steps to either rescind or appeal that order and consequently such order remains extant.

[17] I have considered the written submissions by Mr Sukdeo. Regrettably Mr Sukdeo does not pertinently deal with the aspect that the only issue which the court was required to consider was the termination in terms of s 86(10). The court was not required, as suggested by the defendants in the grounds of appeal, to consider whether there was a breach or a

default. The court considered the pleadings which included the particulars of claim as well as the annexures thereto among them

being the defendants' payment history.

Ad paragraph 1.2

[18] The exclusion of the plaintiff's debt from the debt rearrangement order did not create a breach or a default position requiring the court to consider the validity of such order as such order was not challenged despite the defendants bearing full knowledge of such order at best for them by July 2018. The factual position is that such order was rescinded.

[19] In addition when calculating the quantum, it is common cause that the defendants paid in terms of the debt rearrangement order and not in terms of the debt restructure agreement, resulting in a considerable shortfall as they paid less than the monthly instalment. It is for this reason that the quantum would have been disputed. There was not a real dispute as the defendants did not pay in terms of the agreement. In addition the agreements provided for a certificate of balance to be put up evidencing the amount of the defendants indebtedness.

Ad paragraph 1.3

[20] The facts of the decision in Wesbank v Papier[7] are distinguishable from the facts in the present matter. In this matter the court was not, as in the Papier matter, required to consider whether the termination or not of the distress restructure agreement or the termination of the debt review insofar as it applied to the plaintiff's debt was valid or not. The factual position is that it was terminated and the court order was extant until set aside, which it was not.

Ad paragraph 1.4

[21] The termination of the debt restructuring agreement was not an issue which the court had to determine.

Ad paragraph 1.5

[22] The next ground of appeal related to the scale of costs. Paragraph 26.5 of the distress restructure agreement made provision for costs as a consequence of the defendants' default including costs on the attorney and client scale. In paragraph 14.6 of the particulars of claim it was pleaded that the costs of the action were to be paid by the defendants on an attorney and client scale. In paragraph 5 of the plea that was filed, the defendants admit the contents of the paragraphs as pleaded. Consequently, there is no merit in paragraph 1.5 of the grounds of appeal.

Ad paragraph 1.6

[23] In respect of paragraph 1.6 of the grounds of appeal the defendants indicate that the plaintiff has not advanced any reason why it rescinded the debt review rearrangement order after a long period of time had elapsed. I agree with the submission of Mr Combrink that the time taken by the plaintiff to apply for the rescission of the debt rearrangement order is not of any relevance to the matter and certainly was not an issue of relevance at the time the matter was argued. The fact of the matter is that the defendants have had sufficient opportunity and notice to oppose the termination of the debt rearrangement order and elected not to do so. The order was rescinded and they became aware of it in July 2018 and have taken no steps to challenge such order. Consequently, this ground of appeal has no merit.

Ad paragraph 1.7

[24] The provisions of s 26 of the Constitution were drawn to the defendants' attention in the summons. This much is clear having regard to the index pleadings filed as a matter of record. In addition, their attention was also drawn to the provisions of s 129 of the National Credit Act in the summons. In any event having regard to the transcript of the hearing and submissions made by the defendants' counsel, this was also pertinently pointed out to their counsel having regard to pages 17, 18 and 19 of the transcript.

Ad paragraph 1.8

[25] This was not an issue which the court was required to consider.

Conclusion

[26] In the result having considered the application and written submissions of the parties, I am of the view that there is no merit in the grounds of appeal raised by the defendants and there are no reasonable prospects that another court would come to a different decision, and consequently the application for leave to appeal falls to be dismissed with costs.

[27] The following order will issue:

CASE INFORMATION

APPEARANCES

Counsel for the Plaintiff

: Advocate PC Combrinck SC

Instructed by

:

Livingston Leandy Inc

Ground Floor, Building 5,

Glass House Office Park

309 Umhlanga Rocks Drive,

La Lucia Ridge

(Ref: 46S556323)

PO BOX 4107,

The Square,

4021

Docex 4,

Umhlanga Rocks

Tel: 031-5367500

Fax: 031-5662470/0865145108

Email: nramdayal@livingston.co.za

pjcombrinck@mweb.co.za

c/o Messenger King Suite 801,

8th Floor Esplanade Garage

127 Margaret Mncadi Avenue

(Victoria Embankment)

Durban

Counsel for the Defendants :

Advocate Sukhdeo

Instructed by

: Logan Naidu Attorneys

42 Roslyn Avenue

Asherville

Tel: 031 208 2706

Fax: 0866924093

Email: naidulogan@gmail.com

advocatesukdeo@gmail.com

Date Allocated for Hearing : 14 May 2020

Date of receipt of heads of : 11 May 2020

Argument: Defendants

: 28 May 2020

: Plaintiff's

Date of Judgment

: 23 June 2020

This judgment was handed down electronically by circulation to the parties' representatives by email, and released to SAFLII. The date and time for hand down is deemed to be 09h30 on 23 June 2020.

[1] At para 1.9.

[2] Van Heerden v Cronwright & others 1985 (2) SA 342 (T) at 3431.

[3] Mont Chevaux Trust v Goosen 2014 JDR 2325 (LCC).

[4] Notshokovu v S (157/15) [2016) ZASCA 112 (7 September 2016).

[5] Acting National Director of Public Prosecutions & others v Democratic Alliance in re: Democratic Alliance v Acting National Director of Public Prosecutions & others (19577/09) (2016] ZAGPPHC 489 (24 June 2016).

[6] Although the transcript reflects Mr Sukdeo's name it was Mr Combrinck who placed this on record.

[7] Wesbank, A Division of Firstrand Ltd v Papier (National Credit Regulator as amicus curiae) 2011 (2) SA 395 (WCC).