IN THE HIGH COURT OF SOUTH AFRICA,PRETORIA
(REPUBLIC OF SOUTH AFRICA)

								     CASE NO: 44040/2013
								DATE:  27/2/2014
In the matter between:

									                
THE STANDARD BANK OF SOUTH AFRICA LIMITED:	                 Applicant	
VEHICLE AND ASSET FINANCE DIVISION

and

LLALA PETER PHOSHOKO						 Respondent

________________________________________________________________
JUDGMENT
________________________________________________________________

MURPHY J

1.	The applicant seeks summary judgment against the respondent in the 	form of an order confirming the cancellation of the instalment sale 	agreement entered into between the parties and the return of a 2001 	Toyota Hilux Raider motor vehicle, being the subject matter of the sale.

2.	It appears from the particulars of claim that the instalment sale agreement 	was concluded between the parties more than eight years ago on 29 	September 2005. The respondent agreed in terms of the agreement to 	pay 59 monthly instalments of R3202,43 with effect from 1 November 	2005 with the final instalment to be paid on 27 September 2010.

3.	The respondent avers in the affidavit resisting summary judgment that he 	applied for debt review on 11 July 2007 with a debt counsellor, Octogen, 	in Edenvale. 	Although not stated as such, I assume the application was 	made in terms of section 86(1) of the National Credit Act 34 of 2005 which 	provides that a consumer may apply to a debt counsellor in the prescribed 	manner and 	form to have the consumer declared over-indebted. Although 	there is no positive averment to that effect in the opposing affidavit, it 	seems that Octogen determined that the respondent was indeed over-	indebted. Section 86(7)(c) of the NCA provides that where a debt 	counsellor concludes that the consumer is over-indebted, the debt 	counsellor may issue a proposal recommending that the Magistrate’s 	Court make an order that one or more of the consumer’s obligations be re-	arranged as contemplated in that subsection. The NCA is silent on the 	process to be followed in relation to obtaining the order envisaged in 	section 86(7)(c), but it would seem that both the consumer and the debt 	counsellor have the necessary locus standi to make such an application.

4.	According to the respondent, a declaration of his over-indebtedness and 	proposals for future payments were sent by the debt counsellor to all his 	creditors during July and August 2007.

5.	For reasons which have not been explained, the application as envisaged 	in section 86(7)(c) of the NCA was only instituted in the Germiston 	Magistrate’s Court during 2009 and the matter was set down for 2 	September 2009. The application was not proceeded with. The 	respondent’s explanation for the failure to proceed with the application is 	vague and incomplete. He places the responsibility for the lapse on two 	firms of attorneys, without explaining whether such attorneys were 	mandated by him or the debt counsellor to bring the application. He states 	that “thereafter a matter was lodged” in the Randburg Magistrate’s Court 	and was set down on 27 May 2011. He then avers that he is “not aware 	why the Randburg matter did not continue or why an order was never 	granted in that Court”. He offers no explanation, and nor did he file any 	supporting affidavit, from the debt counsellor, accounting for the matter not 	being processed to finality.

6.	An application was then made to the Polokwane Magistrate’s Court and 	set down for 22 July 2013, that is six years after the debt counsellor sent 	his recommendations proposing a re-arrangement to the respondent’s 	creditors. On 22 July 2013 the matter was postponed. It was set down 	again on 29 October 2013, on which date it was postponed to 3 December 	2013, when it was again postponed to an undisclosed date in February 	2014. Neither the respondent nor the debt counsellor has furnished the 	court with any satisfactory explanation for these delays and 	postponements. The application to the Magistrate’s Court in terms of 	section 86(7)(c) of the NCA remains pending almost 7 years after the 	recommendation proposing re-arrangement was made by the debt 	counsellor.

7.	Annexure OP1 to the opposing affidavit is a statement issued by the 	applicant setting out the history of all entries made to the respondent’s 	account from 28 September 2005 until 27 August 2013. The current 	balance on the account is reflected as R155 930,08. The respondent’s 	payment of the instalments over the period has been erratic. Before the 	debt counsellor’s recommendation he intermittently paid the contractual 	monthly instalment, but on most occasions paid a lesser amount or 	nothing. From July 2007 until July 2013 he paid instalments in the amount 	of between R1100 and R1800. It does not seem that he paid an instalment 	each and every month. He thus made irregular payments of different 	amounts. He avers though that he “made payment of the proposed 	amount to the plaintiff in the amount of R1 292, 22 as regularly as possible 	and in various instances I paid more than the proposed amount”.

8.	On 2 July 2013 the applicant’s attorneys addressed a letter to the 	respondent in which they said:

		“2.	Our client was notified of your Application to be placed under Debt 				Review in terms of the provisions of the National Credit Act No 34 of 				2005 (“the Act”), by your Debt Counsellor.

3.	You are in default with your obligations in terms of the abovementioned 			credit agreement and more than 60(sixty) business days have lapsed 			since you applied for debt review. We hereby give you notice in terms of 			section 86(10) of the Act, terminating the debt review with immediate 			effect.”

9	Section 86(10) of the NCA provides that if a consumer is in default under a 	credit agreement that is subject to debt review, the credit provider may 	give notice to terminate the review at any time at least 60 business days 	after the date on which the consumer applied for the debt review. The 	NCA does not prohibit the termination of a debt review by a credit provider 	while an application for a re-arrangement order is pending before the 	Magistrate’s Court. The credit provider has an unequivocal statutory right 	to terminate a debt review at any time 60 business days after the 	application for debt review is made to the debt counselor in terms of 	section 86(1) of the NCA. The remedy against any unjustifiable 	termination of the debt review by the credit provider lies with the court 	called upon to enforce the agreement. Section 86(11) of the NCA provides 	that if a credit provider who has given notice to terminate a review as 	contemplated in section 86(10) of the NCA proceeds to enforce the 	agreement, the Court hearing the matter may order that the debt review 	resume on any conditions the court considers to be just in the 	circumstances.

10.	In Changing Tides 17 (Pty) Ltd v Grobler and another [2012] 3 All SA 518 	(GNP) at para 19, commenting on the judgments in Collett v Firstrand 	Bank 2011 (4) SA 508 (SCA) and Mercedes Benz Financial Services 	South Africa (Pty) Ltd v Dunga 2011 (1) SA 374 (WC), I observed:

“It is thus clear that the SCA considered that the enforcement of a credit agreement should not be postponed indefinitely simply once steps have been taken to seek a re-arrangement order. The purpose and objects of the Act will best be served by allowing the consumer a 60 day period of grace during which alternative means of resolving the dispute may be attempted and thereafter for the enforcing court (being either the Magistrate’s Court or the High Court) to exercise the discretion to resume the debt review on the basis of more complete evidence regarding the earlier debt review process. The enforcing court is required to decide whether there would be any benefit or meaningful prospect of a better outcome in the event of the debt review resuming. In this regard the court will take into consideration the history of the dispute, the good faith participation of both parties in any prior negotiations designed to result in responsible debt re-arrangement, and the prospect of any satisfactory re-arrangement and compliance with it. An approach along these lines, the SCA held, would strike a fairer balance between the interests of consumers and those of credit providers and would give effect to the intention of the legislature as expressed in the language of sections 86(10) and 86(11) of the Act.”

11.	The respondent contends that the termination of the debt review is 	unreasonable. He submitted that the proposed repayment plan is 	reasonable and will lead to the satisfaction of all his financial obligations in 	terms of the credit agreement within a reasonable period. He stated 	further that should summary judgment be granted, and he be ordered to 	return the vehicle, he would be prejudiced in that he required transport for 	the purpose of his employment. He explained that his over-indebtedness 	arose from his requiring brain surgery in 2007 and the costs associated 	with that. He also indicated that he had laid a complaint with the National 	Credit Regulator regarding the conduct of the debt counsellor. And finally 	he tendered henceforth to pay an amount of R3500 per month to the 	applicant to extinguish his debt. He accordingly requested the court to 	order that the terminated debt review resume on the condition that he pay 	the applicant R3500 per month.

12.	The applicant opposes the grant of an order resuming the debt review. It 	points out that if the respondent is now able to pay R3500 he is able to 	acquire another vehicle and thus his employment is not in jeopardy. 

13.	I am satisfied that the applicant lawfully terminated the debt review in 	terms of section 86(10) of the NCA. I am also not persuaded that it will be 

	just to order the debt review to resume. The principal debt in this instance 	should have been fully repaid by 27 September 2010, more than 3 years 	ago. The arrears now outstanding, R155 930,08, are more than the 	original principal debt of R121 929,82. This is a clear indication that in a 	debt period of almost 9 years the respondent has been unable to service 	his debt and fulfill his obligations to the applicant. Moreover, the 	respondent has failed to disclose his present financial situation and has 	furnished no supporting evidence that he is in a position to pay R3500 per 	month. On the evidence before me there is no meaningful prospect of a 	better outcome in the event of the debt review resuming, especially when 	such prospects are assessed in the light of what has gone before. While it 	may be that the debt counsellor should have been more proactive, there 	was equally a duty on the respondent to drive the process to obtain a re-	arrangement order. His supine attitude in this regard does not inspire 	confidence that he will take steps to extinguish his debt. I am accordingly 	not prepared to make an order in terms of section 86(11) of the NCA that 	the terminated debt review be resumed.

14.	I am left then with the application for summary judgment. The only 	defence raised by the respondent, beyond his plea for the terminated debt 	review to be resumed, is a point in limine that the deponent to the affidavit 	in support of summary judgment is not a person who can swear positively 	to the facts verifying the cause of action or able to state that there is no 	bona fide defence to the action, as required in terms of rule 32(2).

15.	The deponent, Ms Zenobia Harmen, is the Manager, Legal of the 	Standard Bank of South Africa Limited, Vehicle and Asset Finance 	Division, Johannesburg (the applicant). She states in the affidavit that 	through her position she has access to all records and information in the 	possession of the applicant pertaining to this matter. She avers further that 	she has perused the records in her possession and acquainted herself 	with the contents thereof and is able to state that the respondent is 	indebted to the applicant on the grounds stated in the summons and 	particulars of claim and that the respondent has no bona fide defence and 	has delivered the notice of intention to defend solely for the purpose of 	delay.

16.	The respondent contends that the deponent’s averments are insufficient 	basis for her conclusion that he is indebted and lacks a bona fide defence. 	However, her averments are in fact corroborated by Annexure OP1 to the 	respondent’s affidavit and the fact that he raises no defence. The content 	of the opposing affidavit make the in limine attack pointless. A challenge to 	the deponent’s personal knowledge of the facts is irrelevant if no bona fide 	defence is discernible or where there is no averment that the amount 	claimed is wrong or that the claim is false - Herbstein and van Winsen: 

	The Civil Practice of the High Courts of South Africa (5th Ed) 525; and 	Cape Town Transitional Metropolitan Substructure v Ilco Homes 1996 (3) 	SA 492 (C). Moreover, as a legal advisor with access to the respondent’s 	statement of account within the undisputed records of the applicant, the 	deponent is probably in as good a position as anyone else to swear to the 	facts - Nedcor Bank Ltd v Behardien 2000 (1) SA 307 (C) at 311C-D. I do 	not share the opinion sometimes put forward in these kind of cases that a 	deponent’s personal knowledge must extend to an involvement in 	negotiations and discussions with the consumer. The fact deposed to is 	that the records of the applicant, in other words the relevant bank account, 	reflecting all debits 	and credits, reveals a particular indebtedness giving 	rise to a right of action. Where that indebtedness is common cause it 	would be pedantry to insist on further evidence from persons who had 	direct 	dealings with the respondent. It appears from the nature of the 	evidence that the facts are within the knowledge of the deponent and that 	she was able to positively swear to them. The point in limine must 	accordingly be dismissed.

17.	The respondent raises no other bona fide defence to the application and 	accordingly the applicant is entitled to summary judgment.

18.	In the premises an order is granted in terms of prayers 1-4 of the 	application for summary judgment dated 9 September 2013.

JR MURPHY
JUDGE OF THE HIGH COURT

Date Heard:			24 January 2014
For the Applicant:		Adv E Botha
Instructed By:		Newtons Attorneys
For the Respondent:	Adv GVR Fouché
Instructed By:		JF van Zyl & Associates