IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

							CASE NO: 5106/2010

In the matter between:

and
DUDLEY WILLIAM JOHNSON					First Defendant
ERIKA PATRICIA JOHNSON						Second Defendant

JUDGMENT DELIVERED ON 9 SEPTEMBER 2010

1.     This is an application for summary judgment which served before me in ordinary Motion Court. I heard argument and reserved judgment.

2. The plaintiff, Standard Bank of South Africa Limited, issued summons on 21 April 2010 against the defendants, claiming an amount of R1 361 915,62, being the balance of the principal debt together with finance charges thereon. This is in respect of monies lent and advanced by the plaintiff to the defendants under mortgage agreements pursuant to which two mortgage bonds were registered in favour of the plaintiff.

3. It is alleged that the defendants are in default of their obligations and that such default constituted default as contemplated by section 130 of the National Credit Act, No. 34 of 2005 (the National Credit Act). The plaintiff is a registered credit provider in terms of section 40 of the National Credit Act, and the defendants are consumers as defined in section 1 of the National Credit Act.
4.The plaintiff pleads that it had given due and proper notice on 10 February 2010 in terms of section 129 of the National Credit Act, that the defendants had not responded to such notice, and the time limits referred to in section 130 of the National Credit Act having elapsed, the plaintiff proceeded to claim payment of the aforesaid amount plus interest thereon, together with an order declaring certain immovable property executable, and costs on the attorney and client scale.
5. The defences raised by the defendants emerged as follows from their opposing affidavit to the summary judgment application.

8. On 30 March 2010 he again approached Ms Louw as he had not yet received the budget form. She then sent it to him and he immediately made an appointment with a debt counsellor, Ms Nadia Mathews, to determine if he was able to prepare a proposal to the satisfaction of the plaintiff.
9. On 30 March 2010 the debt counsellor accepted his application for a debt review as prescribed by section 86 of the National Credit Act.

12. Since he was accepted under debt review, he had at all relevant times duly effected the monthly payments to the payment distribution agency as instructed by his debt counsellor.
13. To date, so the first defendant states, the plaintiff had not attempted to negotiate an acceptable debt rearrangement, or made any counter proposals to his debt counsellor in order to negotiate an acceptable debt arrangement.
14. The debt counsellor had also instructed an attorney to issue a debt review application in terms of section 86 of the National Credit Act - this will be done within 60 business days after the date on which he had applied for a debt review.

"The credit provider is required, in my view, to bring the default to the attention of the consumer in a way which provides an assurance to a court, considering whether or not there has been proper compliance with the procedural requirements of ss 129 and 130, that the default has indeed been drawn 'to the notice of the consumer', 'Notice', according to the New Oxford Dictionary, means 'attention, observation'. In a case where the consumer has chosen an address in the credit agreement as the domicilium at which all notices, demands or communications may be sent, and the credit provider has accepted that address as the address chosen by the consumer, then the credit provider should ensure, if the notice is sent by mall, that the address to which the notice is posted is in every respect precisely the same as that accepted by the credit provider in the credit agreement."

19. The question which arises is whether section 129 requires actual notice to be given to the defendants.

23. Gautschi AJ formulated as follows in para 18.1

"It is true that section 129 requires the credit provider to "draw the default to the notice of the consumer in writing" and to "first [provide] notice to the consumer", which would seem to indicate more than simply dispatching a notice, but rather to require that such notice be received by the consumer. One might even add that the word "propose" (to the consumer) in section 129(1)(a) and the expression "give notice" in section 86(10) have a similar connotation. These requirements are all encapsulated in the word "delivered" as used in section 130(1)(a)."

"It is fallacious, in my view, to apply a definition in the Regulations to an expression used in the Act (the National Credit Act 34 of 2005). The Act does not permit the Minister, in making Regulations, to define expressions in the Act; the Minister is not empowered to dictate matters in the domain of the Legislature. The definition of the word 'delivered' in the Regulations also does not purport to contain a 'prescribed manner' for delivery. It is only a definition and simply indicates the meaning to be ascribed to the word 'delivered' as used in the Regulations. In my view, therefore, no regard can be had to the definition of the word 'delivered' in the Regulations in interpreting sections of the Act."

In my view there is no substantial difference between the words "delivered" and "served". In addition, whilst the words "delivered", "deliver" and "delivery" are used often in the Act I have searched in vain for any reference to the words "served" or "serve". Section 168 is therefore applicable to a notice which has to be "delivered", which includes a notice in terms of section 129(1) in view of the wording of section 130(1)(a). In terms of section 168, the notice will have been properly served (delivered) when it has been, inter alia, sent by registered mail to that person's last known address."

I am therefore in full agreement with the conclusion of Wallis J namely:

The Minister has prescribed the manner of delivering documents to a consumer in terms of the Act and that the method of delivery must be in accordance with the provisions of the definition of "delivered" in the regulations rather than in terms of section 65 (2).' para 12 "

The wording of the section 129 notice

32. Section 129 of the National Credit Act provides as follows

"129 Required procedures before debt enforcement

36. Nor does the first defendant convincingly state why he had not approached any of the other persons or entities on receipt of the letter.
37. In the premises this defence also fails.

"(3) Despite any provision of law or contract to the contrary, in any proceedings commenced in a court in respect of a credit agreement to which this Act applies, the court may determine the matter only if the court is satisfied that -

(c)     the credit provider has not approached the court -

42. The first defendant states that the application for debt review was only made on 30 March 2010, when the requisite form 17.1 notice was sent by the debtcounsellor to all creditors, including the plaintiff. By then the plaintiff had already instituted action (on 11 March 2010) and service had already taken place (on 23 March).
43. In the premises the first defendant had not applied for a debt review before the present action commenced and, accordingly section 86(2) applies so the credit agreements (the two mortgage bonds) are excluded from the debt review process.
	44This is dispositive of this defence.

"In any court proceedings in which a credit agreement is being considered, if it is alleged that the consumer under a credit agreement is over-indebted, the court may -
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 court in terms of section 86(7); or
b) declare that the consumer is over-indebted, as detenwined in accordance with this Part, and make an order contemplated in section 87 to relieve the consumer's indebtedness."

'[24] The powers given to the court under s 85 ahse if it is alleged that the consumer under a credit agreement is over-indebted. Clearly, the mere allegation of over-indebtedness can never be sufficient The test would be that such over-indebtedness should be established on a balance of probabilities. This is supported by s 79(1) which refers to the preponderance of available information at the time a determination is made.'
47. Masipa J held (at paragraph 19) that the effect of section 85(a) of the National Credit Act is that a High Court, if it refers the matter directly to a debt counsellor, would have to receive the debt counsellor's recommendation and deal with the matter, as would a magistrates' court making an order in terms of s 86(7)(c).

49. In this regard the defendants submitted that

(b) the debt owing to the plaintiff will be repaid within 200 months.
(c) given the current economic climate, should the property be sold in execution, it will not be auctioned at a market-related price and a large shortfall may result This in turn would increase the defendant's expenses as they would then have to rent premises and that would reduce the amounts available for redistribution to his creditors

51. No explanation is proffered for the failure to have approached a debt counsellor - that is even prior to the receipt of the section 129 notice - given the self-confessed financial predicament in which the defendants found themselves.

(a) Though it is stated that the first defendant is self-employed, no disclosure is made as to the nature of his business, and what the future prospects thereof are;
(b) No information is furnished with regard to the R 8 500,00 income - is it the income of the first or second defendant? (the application to the debt counsellor may have been made by the second defendant as reference is made to "her" financial situation). Is the income constant, or does it fluctuate?
(c) No disclosure of any assets is made, neither by the defendants nor of the business conducted by the first defendant
(d) It is not possible to asses the monthly obligations without also knowing the amounts outstanding.

53. In the premises I agree with the submission made by Mr Rabie. namely that there are very little, if any, facts to support the statement that the defendants are over-indebted. A factual basis is required in order to support for what is little else than a conclusion drawn by the first defendant and the debt counsellor There is, accordingly no basis on which a court would exercise its discretion in terms of section 85 of the National Credit Act.
54. As Wallis J had pointed out in Donkin, the grant of relief under section 85 is discretionary. I am of the view that precious little has been said which would permit me to exercise any discretion in favour of granting any relief under section 85 (or for coming to the view that another court would grant such relief in due course).
55. In the premises this defence, also fails.

The certificate of balance

58. The certificate upon which the plaintiff relies, meets these requirements.
59. No defence was raised to the amount claimed by the plaintiff. In fact, in the affidavit of the debt counsellor, the amount owing to the plaintiff is reflected to be R 1 385 992,10, that is slightly more than the amount claimed by the plaintiff.

61. The defences raised by the defendants do not meet the test required to stave of summary judgement.
62.    It follows that the plaintff is entitled to summary judgment as follows -summary judgment is granted against the defendants for:
(a) Payment of the sum of R1 361 915,62
(b) Interest on the amount claimed in (a) above calculated from 8 February 2010 to date of payment at the interest rate prevailing from time to time on the mortgage bond(s), which interest rate on 8 February 2010 was 10.50% per annum, such interest to be capitalised monthly in arrear;
(c) An order declaring erf 59956 Cape Town at Lansdowne. in the City of Cape Town Cape Division. Province of the Western Cape situate at 100 Chukker Road, Kenwyn, Lansdowne executable for the said sums;

S Oliver, AJ

9 September 2010