REPORTABLE

IN THE KWAZULU-NATAL HIGH COURT
PIETERMARITZBURG
REPUBLIC OF SOUTH AFRICA

In the matter between

and

L.B. PHAMBUKA

JUDGMENT

Delivered: 30 March 2012

[1] This is an application for summary judgment by the Plaintiff against the Defendant. The Plaintiff is a registered credit provider and duly registered as such as defined in section 40 of the National Credit Act 34 of 2005 (hereafter referred to as "the Act"), The Plaintiff and one Lindelani Blessing Phambuka (hereafter referred lo as ''the Defendant") entered into a written agreement which, it is common cause, is a credit agreement in terms of section 8 of the Act.

[2]    The Plaintiff has instituted an action against the Defendant wherein the Plaintiff relies on a breach by the Defendant of the aforesaid agreement and claims the following relief, namely: " 

1.     Confirmation of termination of the agreement:
2.      Return of the 2010 CMC AMANDLA with engine number E3447G and chassis number LA61BAS31AB5G6153 to the Plaintiff forthwith;

[4] Arising from the Plaintiffs Particulars of Claim in the action together with the Defendant's affidavit in terms of rule 32(3J(b) the following facts are either common cause or cannot be disputed, namely:

(b) The Defendant has breached the agreement in that the Defendant has fallen into arrears in respect of his payments in terms of the agreement;

(d) The Defendant referred the matter to a debt counsellor;

(j) The Plaintiff did not serve or file any notice of opposition in respect of the aforesaid application and did not file any affidavits in opposition thereto;

[5] In his opposing affidavit to summary judgment the Defendant set out two grounds upon which the Defendant averred 1 should refuse summary judgment.

[8] When this matter was argued before me Mr Blomkamp, who appeared on behalf of the Defendant, indicated that the Defendant was not persisting with this latter gi-ound in light of the fact that it has become settled law that once the said notice has been sent by the credit provider in compliance with the Act it does not necessarily have to come to the attention of the credit receiver,

[9] In light of the aforegoing, it was only necessary for me to consider the first ground raised by the Defendant in opposition to the Plaintiffs application for summary judgment.

The Arguments

[12] I am, of course, insofar as this principle is ultimately applicable to the facts of the present matter, bound thereby.

[14] Also, it was argued on behalf of the Plaintiff that following the cancellation of an agreement the only "amount" that the magistrate may reduce and the only dates for payment that may be postponed as contemplated in terms of s 86(7) of the Act arc those pertaining to the obligations that remain in place once the subject matter of that credit agreement has been surrendered in terms ofs 127 of the Act, Accordingly, it was contended that once an agreement was cancelled and even where a debt review was held with an older made by a magistrate as set out above the credit receiver was not entitled to retain the subject matter or "merx" of the agreement and the credit provider was entitled to the return thereof

129(l)(a) of the Act a debt review relating to that specific agreement is thereafter excluded, this is distinguishable from a case where, despite the provision of such a notice, an order has been made by a Magistrates' Court in terms of s 87 of the Act,

[17] Put simply, Mr Blomkamp's argument is that where a credit provider has given notice in terms of section 129(l)(a) of the Act and the credit receiver then gives notice that he wishes to apply for a debt review that credit receiver is not excluded horn doing so. In other words, it is open for the credit provider to either give the requisite notice in terms of s 86(10) of the Act terminating the debt review process or oppose the application for debt review in the Magistrates' Court, If neither of these steps are taken it must follow (on the argument as put forward by Mr Blomkamp) that the order of the Magistrates' Court is a valid one until it has been set aside.

[21] Relying on the aforegoing Mr Blomkamp submitted that the Plaintiffs application for summary judgment should be dismissed with costs.

Conclusion
[22] It is common cause in this matter that the Defendant was in arrears in respect of the instalments payable by him to the Plaintiff in terms of the agreement. Relying on the Defendant's breach of the agreement (which Is also common cause) the Plaintiff seeks to have the motor vehicle returned to it through the remedy of summary judgment and that the remainder of the Plaintiffs claim against the Defendant be adjudicated upon at-trial.

[25] There is no averment in the Plaintiffs Particulars of Claim that the Plaintiff terminated the debt review procedure by the requisite notice in terms of s 86(10) of the Act. Annexure "E'\ which is not referred to in the Plaintiffs Particulars of Claim but appears at pages 18 and 19 of the papers in this application for summary judgment, is a letter from the Plaintiff dated thel2th of August 2011 and which appears to have been sent by registered post on the 15th of August 2011 (at page 19 of the application papers). This letter is addressed solely to the debt counsellor and has not been addressed either to the consumer or the National Credit Regulator in terms of s 86(10)(a) and (c) of the Act. In addition thereto paragraph 3 of the letter states:

[34] The only remaining issue to be decided is the argument as put forward on behalf of the Plaintiff that the magistrate could only make an order in terms of s 86(7) of the Act and more particularly in respect of a debt review, in relation to the monetary obligations as between the Plaintiff and the Defendant and not in respect of the subject matter of the agreement (the motor vehicle). Firstly, I am satisfied that in terms of the agreement the return of the motor vehicle by the Defendant to the Plaintiff can only follow upon the lawful cancellation of the agreement by the Plaintiff.  As dealt with above this cancellation only took place after the order granted by the Magistrates' Court- In tight thereof this argument cannot carry any weight.

[35] Even if this were not the case I am satisfied that the decisions relied upon by the Plaintiff (dealt with above) are indeed distinguishable on the facts as submitted by Mr Blomkamp in his argument and also dealt with herein. This is also true in respect of the other cases cited by Mr Moodley in his Heads of Argument.

[36] Further, I am satisfied that in light of the agreement itself the monetary obligations of the Defendant to the Plaintiff cannot be separated from the subject matter or merx of the agreement. Put simply, in order to enforce the agreement, including the return of the motor vehicle the Plaintiff must cancel the entire agreement. The agreement ha?, not been cancelled but is subject to the Magistrates' Court order. This includes the possession of die motor vehicle.

Order
[40]   In the premises T make the following order namely:
(a) The Plaintiffs application for summary judgment is dismissed with costs.
(b) The Defendant is given leave to defend the action.

B C WANLESS AJ

DATE OF HEARING :	15 MARCH 2012

DATE OF JUDGMENT:	30 MARCH 2012 

PLAINTIFFS COUNSEL:	MR V MOODLEY 

PLAINTIFFS ATTORNEYS:	NICHOLSON & COMPANY 

DEFENDANTS ATTORNEYS:	WHA COMPTON ATTORNEYS