African Bank Ltd v Myambo NO and Others

• Jurisdiction: South Africa
• Citation: 2010 (6) SA 298 (GNP)

African Bank Ltd v Myambo NO and Others
2010 (6) SA 298 (GNP)

2010 (6) SA p298

Citation	2010 (6) SA 298 (GNP)
Case No	34793/2008
Court	North Gauteng High Court, Pretoria
Judge	Du Plessis J, Makgoka J and Poswa J
Heard	July 9, 2009
Judgment	December 10, 2009
Counsel	PF Louw SC for the applicants.; PG Robinson SC for the third respondent.; No appearances for the other respondents.

Flynote : Sleutelwoorde G

H Credit agreement — Consumer credit agreement — Applicable legislation — Ambit — Interaction between judgment by consent procedure in magistrates' court and procedure under NCA — Procedures compatible — If cause of action arising under NCA, request for consent judgment constituting institution of proceedings under NCA — Relevant procedural requirements I of NCA to be complied with — Summons or letter of demand to include allegation to this effect — Request for judgment to include notice of default — Clerk of court to refer matter to magistrate if unsure whether relevant requirements of NCA complied with — Magistrate entitled to require proof of facts or documents establishing such compliance — Magistrates' Courts Act 32 of 1944, s 58 read with National Credit Act 34 of 2005, ss 86(10), 129(1)(b), 130(3) and 172(1). J

2010 (6) SA p299

Headnote : Kopnota

Section 58 of the Magistrates' Courts Act 32 of 1944 (s 58) provides for a A procedure whereby a creditor can, on obtaining the written consent of a debtor, obtain judgment by consent. A High Court review of a magistrates' court's refusal to grant judgment by consent in terms of s 58 — on the basis that it was contrary to the purposes of the National Credit Act 34 fo 2005 (NCA) — had invited a counter-application from the National Credit Regulator seeking certain declaratory orders clarifying the interaction between the two statutes. B

As to the review

Held, that fair and effective collection procedures promoted the purpose of the NCA. Provided that the provisions of s 58 and those of the NCA were applied properly and with due regard to the parties' rights, it was in the interests of credit providers, consumers and of justice that the effective C debt-collection procedure afforded by s 58 was utilised. The magistrate's finding that s 58 was contrary to the purposes of the NCA could therefore not be upheld. (At 305A - E.)

As to the declaratory orders

Held, that the fact that s 172(1) read with Schedule 1 of the NCA specifically D provided for the situation where there was conflict between s 58 and the NCA necessarily implied that the NCA did not repeal s 58 or render it nugatory in respect of debts to which the NCA applied. (At 304H - I.)

Held, further, that the peremptory nature of the words 'shall . . . enter judgment' in s 58 did not preclude clerks of the court from exercising their discretion to refer s 58 applications to court. If the NCA was applicable, the clerk had E to refer the request for judgment to the court — (1) if they were uncertain as to whether the consumer had been given the full benefit of the protective measures provided for in the NCA; (2) allegations of over-indebtedness had been made; (3) the credit provider failed to disclose that a credit agreement was at issue; and (4) the letter of demand or summons did not contain an allegation that the credit provider was registered as such. (At 308D - H, 309I, 314I - 315A, 317F and 318F.) F

Held, further, that where the cause of action in a consent to judgment procedure was a credit transaction as intended in the NCA, the summons or letter of demand, whichever was appropriate, had to contain allegations that — (1) s 129 or s 86(10) of the NCA had been complied with; (2) that the consumer was in default and had been in default for at least 20 business G days and; (3) a 10-day period had expired since delivery of the s 86(1) or s 129(1) notice. The request for judgment had to have attached to it a true copy of the s 129 notice. (At 311B - H and 314C.)

Held, further, that s 58 proceedings were also 'proceedings commenced in a court' for the purposes of s 130(3) of the NCA, and therefore the clerk of the court had to be satisfied that each of the facts mentioned in s 130(3) had H been dealt with before he or she could determine the matter. A general allegation in the letter of demand or summons that ss 129 and 130 of the NCA had been complied with was not sufficient: the credit provider had to deal with each one of the relevant requirements of s 130(3), alleging that each one had been met. (At 312G - 313B and 314B - D.)

Held, further, that where a plaintiff sought judgment by consent under s 58, and I the cause of action was a credit agreement under the NCA, magistrates were entitled to interrogate the application for judgment and, in so doing, were entitled to require proof by a plaintiff of any fact or document that enabled the court to determine — (1) whether a credit agreement under the NCA was in issue; (2) whether credit was recklessly granted; (3) whether the plaintiff was registered as a credit provider with the National Credit Regulator; (4) J

2010 (6) SA p300

A the extent of the admitted debt; (5) whether the debtor failed to respond to the plaintiff's letter of demand issued in terms of s 129 of the NCA or whether the debtor rejected a proposal made therein; and (6) whether it was to act in terms of s 85 where allegations of over-indebtedness had been made. (At 315B, 316E - F, 318F - G, 318H - I, 319C - D, 320A - B and 317F - G.)

B Held, further, that for the consumer's consent to have been informed, he or she must have understood the available alternatives to legal proceedings and must have been given an opportunity to pursue such alternatives. The wording of the s 129 notice therefore had to be in plain language, understandable, and had to contain a meaningful proposal. (At 313G - H.)

Cases Considered

Annotations C

Reported cases

Absa Bank Ltd v Prochaska t/a Bianca Cara Interiors2009 (2) SA 512 (D): dictum in para [13] approved

Adams v SA Motor Industry Employers Association1981 (3) SA 1189 (A): referred to

Blaikie-Johnstone v P Hollingsworth (Pty) Ltd and Others1974 (3) SA 392 (D): referred to D

BMW Financial Services (South Africa) (Pty) Ltd v Dr MB Mulaudzi Inc2009 (3) SA 348 (B): referred to.

Statutes Considered

Statutes

E The Magistrates' Courts Act 32 of 1944, s 58: see Juta's Statutes of South Africa 2009/10 vol 1 at 2-33

The National Credit Act 34 of 2005, ss 86(10), 129(1)(b), 130(3) and 172(1): see Juta's Statutes of South Africa 2009/10 vol 2 at 1-564, 1-586, 1-597 and 1-605.

Rules Considered

Rules of court

F The Magistrates' courts rules, rule 12(7): see The Supreme Court Act and the Magistrates' Courts Act and Rules 8 ed (Juta 2009) at 337.

Case Information

Review of a Magistrates' Court Order and counter application by National Credit Regulator. The facts appear from the reasons given for judgment.

PF Louw SC for the applicants. G

PG Robinson SC for the third respondent.

No appearances for the other respondents.

Cur adv vult.

Postea (July 9). H

Judgment

Du Plessis J:

Section 58 of the Magistrates' Courts Act 32 of 1944 provides for a I procedure whereby a creditor, on obtaining the written consent of a debtor, can obtain judgment by consent. This review application concerns interaction between some of the provisions of the National Credit Act 34 of 2005 (NCA) and s 58 of the Magistrates' Courts Act (to which I shall simply refer as 's 58'). In particular, the questions are whether a consumer who owes a debt under a credit agreement governed by the J NCA can validly consent to judgment in terms of s 58 and, if so, what

2010 (6) SA p301

Du Plessis J

effect the NCA has on the procedure prescribed by s 58 (the s 58 procedure) A and on the adjudication of a request for judgment by consent.

In accordance with the s 58 procedure, the applicant in this case applied to the clerk of the Pretoria Magistrates' Court for judgment by consent against the second respondent. The clerk of the court referred the matter to the first respondent, a magistrate. The first respondent refused to B grant judgment. The applicant now seeks an order reviewing and setting aside the first respondent's decision to refuse judgment. In terms of its notice of motion the applicant also sought a number of declaratory orders but, as I shall point out, events have overtaken the applicant's proposed declaratory relief. C

The first respondent, to whom I shall refer as 'the magistrate', abides by this court's decision. The second respondent (the consumer) did not enter an appearance to oppose the application. The applicant served the application on the National Credit Regulator, a juristic person established under s 12 of the NCA. The regulator applied to be joined in these proceedings. It was so joined by an order of this court and it now is the D third respondent. The regulator does not oppose the review application.

The declaratory orders that the applicant sought arose from practical difficulties that are encountered with the interaction between the NCA and the s 58 procedure. Speaking for myself, I had some doubt as to E whether this court had the jurisdiction to entertain the applicant's proposed declaratory relief. When I raised my doubt with the parties, the regulator filed a counter-application wherein it sought declaratory orders that addressed the same practical difficulties. The matter was postponed in order for the regulator to notify interested parties of its counter-application. Such notice has now been given. F

Section 16(1)(b)(ii) of the NCA empowers the regulator to apply to a court 'for a declaratory order on the interpretation or application of any provision' of the NCA. I shall in due course deal with each of the declaratory orders that the regulator seeks...