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Republic of South Africa

IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT, CAPE TOWN)

In the matters between:

Case No. 18153/09

CHANGING TIDES 17(PTY) LIMITED N.O. Applicant/Plaintiff

and

LUCAS MARTHINUS ERASMUS First Respondent/Defendant

MARLENE ERASMUS Second Respondent/Defendant

Case No. 14229/09

CHANGING TIDES 17 (PTY) LIMITED N.O. Applicant/Plaintiff

and

BRENDEN PATRICK CLEOPHAS First Respondent/Defendant

CHANTAL CHRYSTALINE JEPHTAS Second Respondent/Defendant

Case No:11973/09

CHANGING TIDES 17(PTY) LIMITED N.O. Applicant/Plaintiff

and

JAN CHRISTOFFEL PHILIPPUS FREDERICKS First Respondent/Defendant
ANNA FRANCINA FREDERICKS Second Respondent/Defendant

JUDGMENT DELIVERED ON 12 NOVEMBER 2009

BINNS-WARD J:

1] These three applications for summary judgment came before me in the motion court. The plaintiff in all of them is Changing Tides 17 (Pty) Ltd. It sues in its capacity as the trustee of the South African Home Loans Guarantee Trust ('the Trust'). In each of the three cases the claim arises out of the alleged liability of the defendant(s) in terms of a rather complicated contractual arrangement. In each case the relief sought includes an order declaring executable immovable property mortgaged by the defendant(s) in favour of the Trust as security for the performance by the defendant(s) of the obligations undertaken by the latter in terms of what is described in the papers as 'the Indemnity'. Two of the applications were opposed and in the third, in which the defendants - although resident in the Western Cape -are for some reason represented by Pretoria attorneys, there was no appearance. By reason of the similarities between the opposed matters and that in which there was no appearance I decided to reserve judgment in all three cases because of the concerns raised by the nature of the grounds of opposition in the opposed matters and the information that was apparent on the papers in the unopposed matter.

2] My concerns arose in connection with the proper application of the National Credit Act 34 of 2005 ('the NCA') coupled with the evident probability in all three cases that any orders granted for execution against the mortgaged immovable property will ultimately result in the eviction of the defendants from their homes.

3] In Jaftha v Schoeman; Van Rooyen v Stoltz [2004] ZACC 25; 2005 (2) SA 140 (CC) (2005 (1) BCLR 78), the Constitutional Court discussed the scope for the negative impact of the sale in execution of persons' homes on both the affected persons' right to adequate housing in terms of s 26 of the Constitution and on their right to human dignity under s 10. The Court found it unnecessary to decide the appellants' argument in Jaftha that as a corollary to the State's positive obligation under the Constitution to promote access to adequate housing for everyone there is a general so-called 'negative obligation' on the rest of society not to interfere with existing rights - in particular, not to take away adequate housing from those who have already obtained it. The ratio of the judgment nevertheless makes it clear that the authorisation of the sale in execution of immovable property that is the home of any defendant should occur only in the context of effective judicialoversight. This is necessary to give meaningful content to the provisions of s 26(3) of the Constitution.

4] Arguments that were advanced by the Minister of Justice and Constitutional Development in Jaftha that it was always open to a judgment debtor to avoid the sale of his/her home in execution by applying to court for a stay of the warrant or, in the context of proceedings in the magistrates' court, applying for an order in terms of s 73 of the Magistrates' Court Act 32 of 1944 ('the MCA) directing the repayment of the debt in instalments and that these opportunities afforded adequate safeguards to the judgment debtors' affected fundamental rights were rejected by the Constitutional Court.

5] In Jaftha the issue was the constitutionality of provisions in the MCA which permitted the issue and execution of warrants of execution against immovable property without judicial oversight. The affected immovable properties in Jaftha were rendered susceptible to sale in execution consequent upon the operation of s 66(1)(a) of the MCA because insufficient attachable movable property could be found to satisfy the judgment debts involved in those matters. The Court held that the unconstitutional consequences of the operation of s 66(1)(a) of the MCA could be remedied by reading in the words italicised below so as to make the provision read as follows:

'Whenever a court gives judgment for the payment of money or makes an order for the payment of money in instalments, such judgment, in case of failure to pay such money forthwith, or such order in case of failure to pay any instalment at the time and in the manner ordered by the court, shall be enforceable by execution against the movable property and, if there is not found sufficient movable property to satisfy the judgment or order, or the court, on good cause shown, so orders, then a court, after consideration of all relevant circumstances, may order execution against the immovable property of the party against whom such judgment has been given or such order has been made.'

6] The necessity to read in the italicised words arose out of the need to render the provision in the MCA consonant with s 26 of the Constitution.

7] It follows that it is appropriate when it would appear from the information before the court that the property in question is the defendant's home that the enquiry mandated in terms of s 26(3) of the Constitution should be undertaken when application is made for an order authorising the attachment and sale of the affected property; and not delayed until steps are taken to evict the defendants consequent upon the execution of such an order.

8] In the current matters the affected immovable properties are rendered susceptible to attachment and sale in execution by reason of the contractual agreement to that effect by the defendants in the event of their falling into default with the periodic repayments due in terms of their loan obligations. The fact that the orders declaring the affected properties be immediately and directly executable (that is in a manner other than ordinarily would be the case in terms of rule 45(1) of the Uniform Rules, read with s 36(1) of the Supreme Court Act 59 of 1959) are sought because of the incidence of a contractual provision does not derogate from the duty on the court in terms of s 26(3) of the Constitution to ensure that any order made by it, which is likely to have the effect that a defendant will be evicted from his/her home, is made only after all the relevant circumstances within the notice of the court have been duly weighed and considered.

9] The consideration enjoined by s 26(3) of the Constitution does not, however, entail as a necessary corollary that the effect of s 26(1) is the imposition on everyone, including private persons, of a so-called 'negative obligation' (in the sense discussed in Jaftha at para.s [31] -[34]) not to prevent or impair existing access to adequate housing. Just as in the Japhta case, it is also unnecessary in the matters currently under consideration to come to any conclusion as to the existence or not of any such negative obligations, or what their effect might be on direct execution clauses in contracts. On the contrary, it may for present purposes be assumed that there is nothing inherently objectionable about clauses in mortgage contracts which provide a right by mortgagees to claim immediate and direct execution against the mortgaged property in the event of default. The course that I have determined on in the current matters is - insofar as s 26(3) of the Constitution is concerned - predicated not on the existence of any 'negative obligation' on the plaintiff with regard to access to housing, but solely on the basis of the court's obligation in terms of s 26(3), in the context of the information apparent on the papers.

10] Section 26(3) of the Constitution does underscore the susceptibility of direct execution clauses to the courts' discretion when it comes to the granting or refusal of prayers for their enforcement if that would affect a defendant's occupation of his/her home. When it is apparent that there is reasonable prospect that less harsh or invasive means are available for the settlement of the underlying indebtedness, the courts are obliged to be circumspect about the specific enforcement of such contractual provisions. In each of the current matters the debt review and re-arrangement provisions of the NCA appear on the face of the facts that may be discerned on the papers to afford a basis for the possibility of a less harsh or invasive means having been available; assuming that the Act had been properly applied.

11] With that prelude, which seeks to explain why I took time to consider judgment in these matters, it is convenient at this stage to outline the facts. There is a large measure of coincidence between the essential features of all three of the cases, and it is therefore not necessary to describe them individually in any particularity.

12] Reduced to the essentials, and with a little simplification in order to assist the narrative, it appears from the particulars of claim in all three matters that the defendants entered into loan agreements pursuant to which relatively substantial sums of money were lent and advanced to them. The plaintiff undertook in each case to indemnify the lender against default by defendants in terms of their aforementioned loan agreement obligations. In consideration for the provision by the plaintiff of such guarantees the defendants undertook in terms of a separate contract, described as the 'Indemnity', to accept liability to the plaintiff, as a principal obligation, in the full amount outstanding in terms of the loan in the event of the lender advising the plaintiff that the defendant was in default of the repayment obligations under the loan and having called upon the plaintiff to stand good in terms of the aforementioned guarantee.

13] To afford security for the performance of their contingent obligation to the plaintiff under the aforementioned 'Indemnity' should the need arise, the defendants mortgaged certain immovable property in favour of the plaintiff.

14] In each case the defendants are alleged to have fallen into arrears with their repayments and the consequent actions instituted against them by the plaintiff are premised on the enforcement of the 'Indemnity' agreements and the attendant mortgage contracts. As required, the plaintiff gave notice in each matter to the defendants in terms of s 129(1) of the NCA and proposed that the defendants should refer their situation to a debt counsellor.

15] It appears from the information in the particulars of claim and the voluminous annexures thereto that the respective debt review applications subsequently submitted by the defendants were processed with varying degrees of efficiency, and in some respects clearly not within the timeframes provided in terms of the NCA and the applicable regulations.

16] In all three matters it is apparent that debt re-arrangement agreements were proposed by the debt counsellor. These proposals were not accepted by the plaintiff. There would seem to have been no response to counter-proposals made by the plaintiff and the plaintiff alleges in correspondence annexed to the summons that it received no payments in terms of the debt-rearrangement proposals and that it had been given no notice of any applications to the magistrates' court with regard to having the proposed debt re-arrangement schemes made orders of court. In each case the plaintiff therefore gave notice in terms of s 86(10) of the NCA to terminate the debt review.

17] In none of the cases is there any indication that the debt counsellor employed by the respective defendants - the indications are that the same debt counsellor was employed in all three of the matters - had made application to a magistrates' court for an order in terms of s 86(7)(c) or s 86(8)(b) of the NCA. There is also no indication that the debt counsellor had responded in any manner to the notices given by or on behalf of the plaintiff in terms of s 86(10) of the NCA.

18] In two of the three matters the notice in terms of s 86(10) expressly states that 'the consumer is in arrears with their home loan repayments and therefore in default with their credit agreement' (my underlining). The general characteristics of the other matter, including the fact that the trust administered by the plaintiff is called the 'South African Home Loans Guarantee Trust' and that the management of the Trust's business has been allocated to a company called 'SA Home Loans (Pty) Ltd', leads me to apprehend that the loan in question in that matter was also in the nature of a so-called 'home loan'. The probabilities therefore favour the conclusion that in each case the properties that have been mortgaged are the homes of the defendants.

10] In case no. 18153/09, the defendants delivered an opposing affidavit in response to the summary judgment application. In that affidavit the defendants admitted that they were indebted to the plaintiff in the sum of R290 611,09, but averred that they did not know what in what amount they are in arrears in terms of the loan agreement. They pointed out that they had fallen into financial difficulties and had been unable to service all their debt.

11] They testified that as a consequence they applied to a debt counsellor for debt relief. They pointed out that notification by means of NCA Form 17.2 was provided by the debt counsellor to SA Home Loans, dated 7 June 2009, that their application for debt review had been successful and that their debt obligations were in the process of being restructured. The Form 17.2 would appear to have been sent out about two and a half months after the Form 17.1 notice informing creditors that a debt review application had been received. The Form 17.1 notification is dated 26 March

2009.

12] An instalment offer was submitted to the plaintiff along with the Form 17.2 notification in terms of which a rescheduled debt repayment was proposed which would, if accepted and implemented, have resulted in the debt being fully repaid in June 2025 rather than as contractually determined in December 2021.

13] The defendants averred that they have been making payment every month to 'die Betaaalmeester (DCM)' and that to the best of their knowledge these payments had been distributed to their creditors. I have assumed that this averment was intended to convey that the defendants had implemented the instalment offer, notwithstanding that there had been no indication by the plaintiff or SA Home Loans (Pty) Ltd that the offer had been accepted.

14] The defendants complained that the alleged failure of the plaintiff to respond to the instalment offer, or to make any counter­offer, was in contravention of s 86(5) of the NCA, which requires each credit provider who has been given notice of a debt review to 'participate in good faith in the review and in any negotiations designed to result in responsible debt re-arrangement.'

15] The defendants averred that the granting of summary judgment would result in them losing their home and would infringe their right to access to adequate housing in terms of s 26 of the Constitution. They contended that other less invasive remedies are available to the plaintiff to recover the debt and requested the court to dismiss the summary judgment application with costs. The opposing affidavit made no mention of any application having been made to the magistrates' court in terms of s 86(7)(c) or s 86(8)(b) of the NCA.

16] In case no. 14229/09 the defendants also delivered an affidavit in opposition to the application by the plaintiff for summary judgment. In that affidavit the first defendant averred that he was employed at the Mykonos casino at a monthly salary of R11500. He explained that during 2008, he ran into financial difficulties in that his commitment to creditors, including the plaintiff, was in the sum of R10 150,35 per month and his living expenses over and above that were in the sum of approximately R7 700 per month.

17] He stated that the defendants had approached a debt counsellor for debt review in terms of the NCA on 10 November 2008 and that a Form 17.1 notice was forwarded to their creditors by the debt counsellor on the same day notifying them of the application. On 18 December 2008, a Form 17.2 notice was forwarded to the defendants' creditors, including the plaintiff, advising that the defendants' application for debt review had been successful and that their debt obligations were in the process of being restructured. The said notification was accompanied by an 'installment (sic) offer', which called upon the plaintiff to 'review this Installment Offer and respond, by means of facsimile, within five (5) working days by completing either the "Instalment Offer Acceptance" or the "Counter Installment Offer" section provided on the last page of this Installment Offer.' The annexed instalment offer proposed the rescheduling of the repayment of the debt owed to the plaintiff with the result that it would be redeemed in

November 2028, rather than in May 2022 as contractually stipulated.

18] The defendants in case no. 14229/09 also averred that in the context of a viable debt re-arrangement scheme the sale of their home consequent upon the grant of summary judgment would result in an unjustifiable infringement of their right to adequate housing in terms of s 26 of the Constitution.

19] In each of the three summary judgment applications the defendants failed to make out a bona fide defence in the orthodox sense. They failed to show that they were able to challenge their indebtedness to the plaintiff in the amounts claimed and they did not deny that they have fallen into arrears with their instalment repayments. It is clear in the circumstances that the plaintiff was entitled on the face of it to claim immediate payment of the full amounts outstanding and to require that the immovable property given in security be declared executable. The question that arises is whether the considerations urged by the defendants provide a valid basis in the context of the applicable provisions of the NCA and s 26 of the Constitution to refuse the plaintiff's applications for summary judgment.

20] The Supreme Court of Appeal recently had cause to reflect on the history and nature of the procedural remedy afforded by the summary judgment process. It is an English import. Its object, in essence, is to avoid unnecessary trials thereby saving costs and promoting the more efficient administration of civil justice. See Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture [2009] ZASCA 23; 2009 (5) SA 1 (SCA) at para.s [29] -[32]. 'The procedure is not intended to deprive a defendant with a triable issue or a sustainable defence of her/his day in court.' (Joob Joob Investments, at para. [32]). An important characteristic of summary judgment is that its grant is subject to the court's overriding discretion. (See rule 32(5) of the Uniform Rules and cf. e.g. Soil Fumigation Services Lowveld CC v Chemfit Technical Products (Pty) Ltd (680/2002) [2004] ZASCA 31; [2004] 2 All SA 366 (SCA) at para.s [10] -[11]; Tesven CC and Another v South African Bank of Athens 2000 (1) SA 268 (SCA) at 277H-J; Maharaj

v Barclays Bank Ltd 1976 (1) SA 418 (A) at 425H and Gruhn v M. Pupkewitz & Sons (Pty) Ltd 1973 (3) SA 49 (A) at 58D-59A.) The

amenability of summary judgment applications to judicial discretion is an important element to ensure that any potential injustice consequent upon the mechanical operation of the remedy is avoided.

21] In my view the considerations raised by the defendants in two of the matters before me do arguably raise triable issues and are in any event of a nature which justify a decision to withhold the grant of summary judgment, at least at this stage. For the reasons set out below, I am concerned that the grant of summary judgment in these cases on the papers as they currently stand will unjustly shut the doors of the court to the defendants. The incidence of the provisions of the NCA in the peculiar circumstances of these matters has led me to the conclusion that it would be appropriate to make orders in each of these cases different from those which would ordinarily issue in accordance with rule 32.

22] The agreements in issue in all these cases are credit agreements within the meaning of the NCA. The objects of the NCA include the promotion and advancement of the social and economic welfare of South Africans by, amongst other matters, providing mechanisms for resolving over-indebtedness based on the principle of satisfaction by the consumer of all responsible financial obligations; and for a consistent and harmonised system of debt restructuring, enforcement and judgment, which places priority on the eventual satisfaction of all responsible consumer obligations under credit agreements. See s 3 of the NCA ^. Section

2(1) of the NCA enjoins that the Act must be interpreted in a manner that gives effect to the purposes set out in section 3.

23] The NCA is, however, unfortunately not as clearly drafted in many material respects as would have been desirable. The deficiencies in this regard are demonstrated by the decision of the National Credit Regulator (being the juristic person established in terms of s 12 of the Act as the oversight administrator and enforcer of the Act) to apply to North Gauteng High Court for a number of declaratory orders 'aimed at clarifying interpretational difficulties that those who work with the Act experience in practice'.¹ This was a most unusual procedure. The practical difficulties to which the many ambiguities in the Act have given rise, and which are evidenced, amongst other indications, by a recent avalanche of not entirely harmonious judgments from the various High Courts throughout the country on the interpretation and implementation of the Act, would I suggest more felicitously be addressed by legislative amendment. Nevertheless, in a judgment handed down on 21 August 2009, the court acceded to making a number of the declaratory orders sought: See National Credit Regulatorv Nedbank Limited and Others [2009] ZAGPPHC 100; 2009 (6) SA 295 (GNP).

24] Amongst the questions on which declaratory orders were sought was the nature and extent of the duties in terms of the NCA incumbent on debt counsellors in respect of debt reviews. As Du Plessis J observed, at 300D of the National Credit Regulator judgment, it is the procedure concerning applications by 'consumers' (as defined in s 1 of the Act) to debt counsellors to be declared over-indebted that had caused most of the problems that gave rise to the application for declaratory relief.

25] The duties of debt counsellors in dealing applications for debt review are provided for in terms of s 86 of the NCA. In all three of the matters with which I am dealing the indication is that the debt counsellor made a finding in terms of either s 86(7)(b) or s 86(7)(c) of the Act.² Du Plessis J declared (correctly, in my respectful view) that in either of the aforementioned circumstances there is a duty on the debt counsellor to make application to the magistrates' court for an order to be made in terms of the counsellor's debt re-arrangement proposal.³ In the case of a finding by the counsellor in terms of s 86(7)(b), the duty to make application to court arises only if the affected credit providers do not voluntarily agree on a plan of debt re-arrangement. In the case of a finding of over-indebtedness in terms of s 87(7)(c), the debt counsellor is obliged in all cases to make application for orders of the nature contemplated in s 86(7)(c) of the NCA. The obligation on the consumer to make an application to court for debt relief, if so advised, arises only if the debt counsellor rejects the debt review application and the magistrates' court grants the consumer leave to apply for the relief contemplated in terms of s 86(7)(c)(i) and/or (ii).⁴ (The latter situation does not appear from the information in the summonses to have pertained in any of the three matters with which I am dealing.)

26] Applications by consumers to debt counsellors for debt review are regulated in terms of Part D of Chapter 3 of the National Credit Regulations,2006.⁵ Reg. 24(2) provides that the debt counsellor is required with five business days after receiving an application for debt review in terms of s 86(1) of the Act to deliver a completed Form 17.1 to all credit providers that are listed in the application and every registered credit bureau. The debt counsellor must endeavour to verify the information provided in the application by the consumer. In the event of any such information not being corrected by the credit provider, the debt counsellor is entitled to accept it as correct. Within 30 business days (i.e. within approximately 42 calendar days), after receiving an application in terms of section 86(1) of the Act, a debt counsellor must make a determination in terms of section 86(6). After completion of the assessment, the debt counsellor must submit form 17.2 to all the affected credit providers and all registered credit bureaux within five business days.

27] In terms of the NCA regulations a consumer whose application to be declared over-indebted is rejected in terms of s 86(7)(a) of the NCA is afforded 20 days within which to apply to court in terms of s 86(9) for an order contemplated in s 86(7)(c)(i) or (ii). There is however no provision in the regulations as to the time within which a debt counsellor is required to make the applications required if the debt counsellor's assessment has resulted in a finding in terms of s 86(7)(b) or (c). I respectfully agree, however, with the observation by Du Plessis J in The National Regulator case, at 305C, that 'matters of over-indebtedness are by nature urgent and require speedy resolution'. This implies a duty on the debt counsellor to act with expedition in matters in which an application by the counsellor to the magistrates' court is required.

28] As mentioned, it is not apparent whether or not the debt counsellor involved in each of the matters before me made the required application to the magistrates' court, either in terms of s 86(7)(c) or s 86(8)(b) of the NCA. The nature of the application and the counter-applications for declaratory relief as to the proper construction of the NCA brought before Du Plessis J in the North Gauteng High Court by the National Credit Regulator and by certain leading credit providers suggests to me that there has been widespread uncertainty about the nature of the debt counsellor'sobligations in terms of s 86 of the Act.⁶ It would come as no surprise therefore that in many cases the debt counsellors might not have been discharging their statutory responsibilities because of a failure properly to understand the relevant provisions of the

NCA.

29] As also mentioned, the debt reviews in all three of the current cases were terminated by notice given by the plaintiff in terms of s 86(10) of the NCA. The purpose of s 86(10) of the Act, which provides:

'If a consumer is in default under a credit agreement that is being reviewed in terms of this section, the credit provider in respect of that credit agreement may give notice to terminate the review in the prescribed manner to-

a) the consumer;

b) the debt counsellor; and

c) the National Credit Regulator,

at any time at least 60 business days after the date on which the consumer applied for the debt review.',

appears to be to allow the credit provider to insist on timeous compliance by the debt counsellor with the debt review timetable and to afford it the right to pursue recovery proceedings if there is a failure to efficiently comply with the debt review process. No doubt the notice to the National Credit Regulator prescribed in terms of s 86(10) is intended to afford the Regulator the means of monitoring the proper functioning of the debt review system, including the proper discharge of debt counsellors of their statutory obligations.

30] My summary of the relevant provisions above makes it clear that a debt review conducted strictly in accordance with the regulations should, within a period of 60 business days, have resulted in either a rejection of the debt review application, or the institution of an application by the debt counsellor to the magistrates' court in terms of either s 86(7)(c) or s 86(8)(b) of the NCA. It should be only in an unusual case that a credit provider gives notice in terms of s 86(10) of the Act. In the ordinary case it would be inappropriate for a credit provider to give notice in terms of the provision if a relevant application was already pending before a magistrates' court and being prosecuted with reasonable efficiency. The object of the provision of s 86(10) cannot be to permit a credit provider carte blanche, without good reason, to negate the operation and effect of a debt review process instigated in terms of s 86 of the NCA.

31] Section 129(1)(b) of the NCA provides that the credit

provider, subject to section 130(2), may not commence any legal proceedings to enforce the agreement before (i) first providing notice to the consumer, as contemplated in paragraph (a) , or in section 86 (10), as the case may be; and (ii) meeting any further requirements set out in section 130.

32] The evident purpose of the notice by a credit provider in terms of s 86(10) of the NCA is to enable the consumer and/or the debt counsellor to urgently bring an application to a magistrate in terms of s 86(7)(c), or 86(8)(b) if that has not by then already been done, alternatively, if such an application is already pending, to approach the magistrate for an order in terms of s 86(11) of the NCA that the debt review should be resumed. I can conceive of no other reason for the requirement in terms of s 130(1)(a) of the NCA that at least 10 business days must have elapsed after notice to the consumer as contemplated in terms of s 86(10) before a credit provider may institute proceedings for the enforcement of a credit agreement.

33] In cases such as the three matters currently before me, the defendants should, if they wished to avoid summary judgment on the basis that the claim was subject to uncompleted debt review proceedings (an allegation that has been only suggested rather than unequivalently made in the two opposing affidavits that were filed), have described precisely to what stage their respective debt reviews had progressed and furnished an explanation why they had not yet obtained a debt rearrangement order in terms of s 86(7)(c)(ii) or s 87(1)(b)(ii) of the NCA. However, because of the evident uncertainty that has up to now attended the interpretation and administration of the Act, I consider that it would be appropriate in the peculiar circumstances of the current cases, with their indications that the debt review process might not have been prosecuted properly by the debt counsellor in terms of the relevant provisions of the Act and the regulations made thereunder, to exercise my judicial discretion against granting summary judgment at this stage.

34] The interests of justice and also the objects of the NCA would not be served by granting summary judgment in these matters without certainty that the defendants have been properly and effectively afforded the protection and opportunities which the NCA was intended to afford them in the circumstances of their timeous applications to a debt counsellor in terms of s 86(1) of the NCA. An enquiry in that regard is also considered by me to be necessary before I would be willing to assent to an order for the attachment and sale in execution of the mortgaged properties which appear to be the defendants' homes. Equally, the outcome of the further enquiry to be directed will assist in determining whether the orders for summary judgment to which the plaintiff would, but for the uncertainty in regard to the proper conduct of the debt review process, otherwise prima facie be entitled should be granted. I do not consider that it would be fair to the plaintiff to refuse summary judgment at this stage on the basis that the posited enquiry into the debt counsellor's compliance with the provisions of s 86 of the NCA could be deferred to the trial stage and dealt with at that stage in the context of a resort by the defendant's to s 85 of the Act.⁷ That approach would render the plaintiff's right to have availed of rule 32 in these cases altogether nugatory, which is not desirable.

35] I am conscious that in taking the route I propose I shall be departing materially from the approach ordinarily followed in determining a summary judgment application. The practice of this court already recognises that the NCA in effect requires some departures from what is strictly required in terms of rule 32. Consolidated Practice Note 33(2) requires that a credit provider who applies for summary judgment, must in addition to filing an affidavit complying with rule 32(2) also satisfy the court of the matters referred to in s 130(3) of the NCA. It needs emphasising, however, that the special route that I intend to follow in this case should not become an entrenched practice. If a defendant intends to rely on the prejudicial non-compliance by the debt counsellor with s 86 of the NCA that should be set out clearly and with sufficient particularity in the affidavit opposing summary judgment. An indulgent and specially tailored approach is being adopted in the current cases only because of the uncertainty, discussed above, that has attended the proper interpretation and implementation of the Act in relevant respects.

36] In the event that it is determined, on enquiry, that the debt counsellor failed for no good reason in material respects to properly process the debt reviews to the stage of obtaining debt re­arrangement orders from a magistrates' court, the proper order in each of these three matters would be to refuse summary judgment because of the reasonable possibility that the court would at trial stage in such circumstances make an order referring the defendants' situation to a debt counsellor for a debt review afresh, this time in proper compliance with the provisions of the NCA (see s 85 of the NCA); alternatively, if an application to a magistrate had already been made by the time the ten business days' notice had elapsed after the plaintiff's notification in terms of s 86(10), the trial court might make an order staying the action pending the outcome of an application directed by it to be made by the debt counsellor to the magistrates' court in terms of s 86(11).⁸ The other course open to the trial court would be itself to make a declaration of over-indebtedness and a re-arrangement order (see s 85 read with s 87 of the NCA and cf. Standard Bank of South Africa Ltd v Panayiotts [2009] ZAGPHC 22; 2009 (3) SA 363 (W) at para. [21]).

37] The following orders will therefore issue in case no.s 11973/09, 14229/09 and 18153/09, respectively:

a) The application for summary judgment is adjourned sine die;

b) The plaintiff is directed through the Sheriff to serve a copy of this order, together with a copy of the judgment on-

(i) The National Credit Regulator

(ii) The debt counsellor to whom/which the defendants' application for debt review was directed in terms of s 86 of the National Credit Act 34 of 2005 ('the Act').

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